F M L BUSINESS MACHINES P. O. BOX 52144 – 00100 NAIROBI. firstname.lastname@example.org TEL NO. 0721 759 068 0721 778 554 DIRECTOR MICHAEL MWIMALI LEO ODANGA KWEYU PROJECT: OIL EXTRACTION AND USAGE FROM AVOCADO FRUIT. INTRODUCTION Western Kenya is a region with an agriculturally Based economic mainstay. Particularly, sugar cane growing for income purposes is both intensively and extensively practiced in this part of Kenya. A large parcel of land has been cleared to pave way for sugar cane plantation. Unfortunately this leaves little space for the natural environment. As a consequence this region has suffered an environmental degradation arising from extensive deforestation. Besides, the little forests still surviving are being cut down to provide wood fuel for both domestic and industrial use. To confront the problem of deforestation, which is potentially consequential to the climate of the region efforts have been put in place. Technological advancements have been directed at production of a more environmentally friendly source of oil fuel which include: Bio gas production, paraffin, solar enegy, however, use of paraffin has made little impact since to a majority of people live below one dollar a day. The current price of Kshs 60 per litre of kerosene is unaffordable. Use of biogas has also been introduced but not so widely practiced since the cost of putting up a biogas plant alone is approximately $2,500 (about Kshs. 180,000) for a 16m3 plant size. This is an impossible cost to a people living below the poverty line. As a result people have reverted to use of wood fuel which is adversely affecting the fauna and flora. Efforts to come up with a more cheaper environmentally and friendly source of energy have continued. FML Business machine, a company that deals with production of renewable energy, has put its weight into this efforts in an attempt to find and provide a more cheaper and sustainable source of energy. Amongst the many ways the company has given attempts to the extraction of oil from avocado fruits which can be used both for lighting and cooking purposes. This exercise will carry along multiple side benefits ranging from environmental conservation and restoration to providing a cheaper and widely affordable energy source. Here below are the advantages of this scheme. (i) It is a source of livelihood – It will provide some earning to the project owners and the community around. (ii) It will be a source of employment to the community around. (iii) It will provide a cheaper and sustainable energy source. (iv) It will encourage afforestation. (v) It will contribute to positive climatic changes. (vi) It will contribute to poverty eradication. (vii) It provide food to the people. (viii) It has aesthetic and panoramic effects – it will create some environmental beauty. Vision Projection Looking forward to a bright future where each individual will be able to independently extract and make use of this oil as an alternative energy source. FML Business Machine, by this project, looks forward to a bright energy future where each individual will be able to independently extract and make use of this oil as an alternative energy source. In tandem with the final running and operation of this project FML Machine will conduct work shops on this not so exploited technology to equip the people with the knowledge of this extraction exercise at individual level. PROJECT REQUIREMENTS The extraction and conversion exercise of this avocado oil into the final lighting and cooking fuel will require a number of inputs which will put maximum consideration to the size of the extraction plant and the ground size for sitting the plant. The raw materials needed will be procured through own (company’s) farm production, buying from individual outgrows and buying form other districts. However, depending on demand pressure we may seek to import some to supplement the locally available input material. Here are the project requirements; (1) Hiring the plant building (2) A 5 – acre farm land (3) The extraction Machine (4) Labour (5) The raw materials (6) Transport (7) Packaging material (8) Initial advertisement Cost Estimation (i) Building To put this exercise to its final end, we will expectedly run through some costs. To begin with we expect to hire a building at an estimated cost of about Shs. 10,000. By simple arithmetic we expect rental cost of about Ksh. 360,000 for the first 3 years. (10,000 x 12 x 3) (ii) The machine The main machine will cost us Kshs. 280,000. (iii) Raw Materials In the short run we will have to obtain these raw materials from the market. Approximately 10 bags of avocado fruits will be required every single day. At a cost of Kshs. 1,500 per bag we will require a total of Kshs. 15,000 each day. Kshs. 15,000 by 30 days will amount 450,000. (iv) Transport means In the short run we will require some transport means which will cost us at least Kshs 6,000 per day. We will need a total of Kshs. 180,000 for transportation in one month. (v) Labour About 5 people working at the plant machine will be entitled to a monthly salary of about Kshs. 10,000 per head. A total of Kshs. 600,000 will be required. (vi) Packaging material Simple plastic packaging material will be required. At a projected out put produce of about 1000 litres of oil per day, we will package the oil in 1 litre size polythene bags where every pack will involve two polythene bags at a cost of Kshs. 2. In total we will require Kshs 60,000 to run through the first month. (vii) Water and Electricity Water and electricity will be fundamental in the extraction process. This will expectedly run us through some costs of about Kshs. 15,000 per month. (viii) Stationary We will require Stationary to keep our records and accounts. This will approximately cost us Kshs. 50,000 in the short run period. N.B We will need a stand by seed money of about Kshs. 500,000. Overall FML Machine Company will run a total cost of 2.495 million Kenya Shillings in the short run, which involves the production process itself. Short run Return Expectation Oil production, given adequate supply of input material as per the above plan is expected to hit the 1000 litre mark. This is however, our short run expectation but with expansion of the plant we expect to produce about one and a half times as much. Our oil as per our plan will cost Kshs. 20 for every litre. Given also the quality of this oil which will enable it to light for slightly longer compared to other fuels we are looking forward to a much consumer demand. As a strength on our side our price is relatively lower and three times more affordable than kerosene which currently buys at Kshs. 60. Besides the marketing efforts in the short run daily incorporated in our budget will be instrumental in creating and expanding consumer awareness. In the first month of our running project we expect to make an income amounting to Kshs. 600,000 as the calculation below; Kshs[ 1000 x 20 ] x 30 days = Kshs. 600,000 1 We, however, treat this as our initial income return expectation, but this figure will be increased with future plant expansion. CONCLUSION It is our hope and aspiration as a company through this project to; (1) Provide the consumer with a cheaper, readily available and quality energy source as an alternative to the existing but expensive fuels. (2) Participate in environmental conservation effort through provision of a smoke free energy source whose acquisition involves and extensive and intensive avocado tree planting. (3) and lastly to move to greater heights in an effort to improve the social welfare of the people through efficient service provision to them in line with our task.. It is our general hope that we will provide our best to the society.
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