Palm Oil Plantation and Processing DESCRIPTION 0 by 4mZG9ne


									7.0       Management Summary
Managing Director: Mr. Adisa Kabiru Adeniyi - HND (Accountancy), ACA, AMNIM is a qualified
accountant in Nigeria. He holds Higher National Diploma in Accounting from Osun State Polytechnic, Iree in
Osun State, Nigeria. Kabiru has worked in various capacities in both pubic office and private organizations.
These establishments are: Osun State Agricultural Development Corporation (OSSADEP); Karrington Group
(Management Accountant); Stallion Homes, Loan and Savings Limited (Manager Account); Zoom Mobile
Limited (Senior Accountant);

He is the founders of Adeniyi Olubode Professional Services & Co (Chartered Accountants) and Guildance
Community Development Foundation. These two companies are being managed successfully on a going
concern basis.
Adisa is well versed in tax laws, commercial laws, company law, accounting and auditing standards,
management consultancy, information system audit, information system consulting, mergers and acquisitions
and risk management.

Operations/Marketing Manager: Adesina Adesoji Olukunle B.Agric OAU Ife & Diploma Certificate in Civil
Engineering. He has over 18 years of experience in agricultural project management. Adesoji has successfully
implemented over four oil palm plantation and processing in Nigeria.

8.0       Financial Plan Summary

The total cost of the project is N25,000,000.00 (Twenty five million naira only). This is made up of
N19,376,150.00 fixed cost and N5,623,850.00 operating expenses as detailed on Table 1. Equity contribution
would be N1,000,000.00 while the balance is to be raised from financial institution at interest rate of 4% per
annum. The fund would be disbursed in the first year to enable the project take off smoothly. Thereafter, the
project would be financed from the proceeds of the farm. Loan repayment starts in the 2 nd year which means
there is a grace period of 1 year. The loan will be fully repaid in 6 years.

For the purpose of clarity, it is necessary to state all the assumption used in our analysis. These are listed below:

              a.       The prices of items used in the analysis are the ruling prices goods and services in the
                       market we have done our market survey before arriving of the prices hence the reliability
                       of the data used.
              b.       The useful lives of the fixed assets of the proposed project have been taking into
                       consideration in the calculation at annual depreciation cost of 5% and 10% for each
                       respective asset..
              c.       Investment Capital: The investment cost covers the cost of land acquisition,
                       development, equipments, intercrops, the total investment cost of the project is estimated
                       at N25,000,000.00 (Twenty five million naira only), Details are provided below:-

Items                                                                                  N

Land Clearing of (50 ha)                                                           166,250

Oil palm seedling:                                                               2,850,000

Wheel barrow                                                                        19,200

Machete                                                                             20,000

Chisel                                                                               7,500

Drum                                                                                 28,000
Hydraulic press                                                                    720,000

Gallons                                                                             35,000

Land acquisition                                                                  7,500,000

Sieve                                                                                 3,200

Sterilizer                                                                         180,000

Cracker                                                                             152,000

Maize seedling                                                                      250,000

Plantain & Banana seedling                                                         450,000

Fertilizer                                                                        3,000,000

Digester                                                                            195,000

Storage                                                                           3,300,000

Personnel                                                                         2,700,000

Casual labour                                                                     2,700,000

Miscellaneous expenses                                                              723,850

Sales Forecast

The expected targets are contained in table II with the projected revenue, the selling price used in the study is as

I.         Palm oil                                              N200 per litre

II.        Palm Kernel                                           N4,000 per 50kg

III.       Maize                                                 N40,000 2per ton

iv.        Plantain                                              N43,692.05 per metric ton

IV.        Sludge (fuel)                                         N750 per bag of 25kg-

Going by the table II under appendix, we expect to realize N11, 985,600; N11,985,600; N8,392,800;
N22,404,200; N25,285,400; N28,166,600, N28,166,600 consecutively for 7 years.

Any increase in the sale of these farm produce will automatically increase the profit and revenue.

Economic Justification

As depicted on (table ii & vii) of the appendix, the revenue from the sale of all the proposed crops is expected to
be N19,483,828 on the average. While the average cost is estimated at N9,331,714.
 Net Present Value (NPV) recognizes the time value of money. It is the net contribution of a project to its
owner’s wealth i.e the present value of future cash flows less the present value of initial capital investment. In
our analysis, all the projected cash flows are discounted at 22% to their present values. This project is
technically feasible as our NPV is positive i.e N18,509,188.

The Benefit Cost Ratio (BCR) is 1.49 as depicted on (table ix). This shows that the project benefits outweigh
the costs. Hence, the decision to consider this project as a worthwhile venture.

9.0      Conclusion

While the technical feasibility and financial viability of this project has been established via our production cost
estimates, revenue projection and the budget analysis on appendix. We anticipate positive socio-economic
impact both at local level and abroad. This project guarantees employment creation and local food security. The
project is in accordance with the national objective of increased agricultural production in the country under the
Green Revolution Programme of the Federal Government. Hence, we recommend the project to any financier
interested in funding viable and profitable agricultural project.

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