Executive Summary

Yam (Discorea spp), a tropical perennial crop cultivated mainly for its edible tubers is a
staple food consumed worldwide and provides much economic benefit to the producers.
Yam (Discorea species) can also be described as an annual or perennial tuber-bearing
and climbing plants belonging to the family of Diocoreceae.

Yam flour is a creamy-white, granular flour with a slightly fermented flavour and a
slightly sour taste made from fermented, gelatinized fresh yam
tubers. Yam flour is used in the preparation of poundo yam. It is a cherished delicacy
when served in the form of “Samolina” or “Samovita”, with well-prepared soup.

There is high demand for Instant Pounded Yam Flour in both domestic and international
markets. In the international market, large market exists in Europe and America and
other continents most especially with sizeable black people. The potential demand for
IPYF is in excess of 500,000 tonnes/annum

The supply gap has been identified to continue to expand as the population of the
country which is estimated to be 160 Million continues to grow at 3.5% per annum. Also
the rural urban drift in the country would help to deepen the market for instant
pounded yam flour which is estimated at over N 3 billion annually in Nigeria.
West Africa accounts for 90-95% of world yam production with Nigeria the largest
single producer. In 2004, global yam production was about 47 million metric tons (MT)
with 96% of this coming from Africa. Nigeria alone accounts for about 70 percent of
world production. It is the second most important root/tuber crop in Africa with
production reaching just under one third the level of cassava.

These coupled with the geometrically exploding population and the continued ruralurban
drift continues to fuel the demand for well packaged food stuffs especially poundo
yam, a staple food in the country.

The SWOT analysis showed that the opportunities of the business outweigh the
challenges and was concluded that instant poundo yam flour idea is healthy and feasible
in Nigeria.

http://nairamarkets.com


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1.0 Project Brief

This objective of this document is to provide information regarding investment
opportunity for starting a poundo yam flour factory in any commercial city in Nigeria.
The factory would have the capacity of producing 2tonnes (2000kg) of yam flour / day,
50 tons /month, the manpower requirement for the production is 6 or more

1.1 Proposed Business Legal Status
The legal status of business tends to play an important role in any setup; the proposed
yam flour production is assumed to operate on as a private limited company.

1.2 Opportunity Rationale

Flour has been used for centuries as vital ingredient of daily diet. Yam flour is an
important source of complex carbohydrates with a balance mixture of calories, proteins
B-vitamins, calcium, folacin, iron, magnesium, phosphorus, potassium, zinc, minimal
amounts of sodium and other trace elements.

The products made by flour can be eaten by hand or mixed with other traditional and
modern dishes. Such all factors contribute to make it the most nitrous food for the
individual and commercially very importance for any economy.

Apart from serving as food, it has a lot of industrial uses. It is used in production of allpurpose-
adhesives. The adhesives are used by producers of cartons, packaging
companies and lather and shoe producers. The all-purpose adhesives is produced with
yam or cassava starch. Some industries particularly in Europe use yam flour in
preparation of high quality biscuits, bread, cakes to mention but few. In Nigeria also, it
is used in production of high quality bread and cakes.

The supply gap has been identified to continue to expand as the population of the
country which is estimated to be 160 Million continues to grow at 3.5% per annum. Also
the rural urban drift in the country would help to deepen the market for instant
pounded yam flour which is estimated at over N 3 billion annually in Nigeria.

1.3 Proposed Capacity

The capacity selection is a critical matter that should be decided through market
research. In this pre-feasibility study, the poundo yam factory would have the capacity
of producing 2 tons of yam flour per day, 50 tons/ month.

Start up Capex

Item Cost (N) Description
1 Industrial dryers 1,500,000
2 Yam milling
machine
2,500,000
3 Automatic packing &
sealing machine
2,000,000
4 Storage racks 2,000,000
5 300KVA Generator 800,000
6 NAFDAC
registration
150,000
7 Weighing scale 150,000
8 Other Capex 500,000
Total
9,600,000.00

To view the start-up capex and opex in tabular form http://nairamarkets.com/yam-flour-production-in-nigeria-feasibility-report/

Op add estimated cost of building or renting the factory and the cost of buying yams for first month of production

Start-up Opex & Opening stock

Item Cost (N) Description
1 Salaries(one month)
435,000.00
2 Electricity & Diesel
100,000.00
3 Factory Lease
500,000.00
4 Raw material (one
month)
1,675,000.00
5 Contingencies
500,000.00
6 Utilities
500,000.00
7 Promotions
200,000.00
8 Other Opex
100,000.00
Total
4,010,000.00

Cost of Project

Loan
10,888,000.00
Equity
2,722,000.00

2.0 Market Analysis

2.1 Industry Analysis

The Nigerian Agro-allied Food processing industry comprises local and multinational
manufacturers of processed raw agricultural produce such as semovita, semolina, wheat
flour, and the distributors/retailers of these products. The operators within this industry
are regulated by National Agency for Food and Drug Administration and Control
(NAFDAC) which ensures that processed food when packaged commercially is safe for
consumption and processes leading to it production are within approved regulatory
requirements. The Standards Organisation of Nigeria also plays a regulatory role in
ensuring that minimum product standards are met if not surpassed by manufacturers.
The Manufacturers Association of Nigeria also partners with all stakeholders towards
maintaining quality product standards, lobbying government for policies that encourage
manufacturing and safeguarding consumer interest. Other government agencies that
play a role in the industry include the Consumers’ Protection Council which strives to
protect consumer rights and the various states chambers of commerce.

The situation with packaged raw food flour production has progressively been
improving since 2001 with sharp growth in middle class population, increasingly
growing western influence on Nigerian lifestyle which requires average parents to have
tight work schedules and little leisure time increased public health consciousness with
many Nigerians and a host of other factors. These have led to increasing demand for
processed raw food flour to meet the dietary needs of Nigerian families.

The main challenges operators face are numerous but inadequate power supply is the
main challenge since the business depends entirely on power supply to produce and
PHCN doesn’t provide adequately. Power costs alone account for nearly 35% of running
expenses in many cases sometimes affecting the profit margin and final price. There is
also high cost of distribution to deal with. The target market is global therefore global.

Most of the existing pounded yam flour production companies in Nigeria produce only
for local consumption and rarely export to neighboring African countries.

2.2 Market Overview

According to the International Institute for Tropical Agriculture (IITA, Ibadan) in a
2001 food consumption survey among Nigerian households, Yam is one of the most
widely consumed staple after maize, cassava and rice although one of the most
expensive. It is a major source of energy in diet of Nigerian families, doesn’t spoil
quickly and also occupies a very symbolic position socio-culturally among diverse ethnic
groups in Nigeria with the New Yam festival serving as a standard for assessing farming
seasons and crop yield.

The National Bureau of Statistics and the world bank sanctioned 2011/2012 GHS-Panel
study revealed that 63% of the rich in Nigeria consumed Yam at least once a week
compared to 23% among the poorest implying that Yam is consumed more depending
on income levels of households hence why its derivatives would appeal more to a middle
to upper class market.

By extension Nigerians living in the diaspora have strong leanings towards their local
customs even while living abroad and have nostalgic feelings of enjoying Nigerian
delicacies abroad. This has led to many of them longing to enjoy “home cooked
delicacies abroad resulting in the setting up of Nigerian owned restaurants and shops in
key countries”. The market for packaged processed pounded yam in Nigeria is expected
to continue rising especially with economic growth in certain key sectors namely; Power
supply, improved transportation system, fast growing Hospitality sector and improved
purchasing power of Nigerians, means that these sectors have direct bearing on sales
performance of packaged raw food flour consumption and the teeming foreign market.

With a population of 17 million Nigerians living abroad in 2014 (Thisday report, August
2014) and many Nigerians in the diaspora have a longing to connect with their countries
of origin both economically and socially. The top 5 countries where Nigerians live
abroad are the United States, United Kingdom, South Africa, United Arab Emirates and
China and however Nigeria’s largest export markets for agricultural produce are; India,
US, Netherland, Spain and Brazil

2.3 Market Demand

There is high demand for Instant Pounded Yam Flour in both domestic and international
markets. In the international market, large market exists in Europe and America and
other continents most especially with sizeable black people. The potential demand for
IPYF is in excess of 500,000 tons/annum

2.4 Relevant Market Size

Total Population of Nigerians in Main Market Regions 2014 estimates is put at
10,850,000. Sources for these figures are; the deputy Nigerian Ambassador to the
United States at a conference for promoting investment in Nigeria mentioned that at
least 5 million Nigerians live in the US in 2013. The Guardian Newspaper on 16th
November 2014 reported the US, UK, South Africa, Europe and Asia as Nigeria’s leading
overseas destinations with the US accounting for 31% followed by Europe at 21% and
South Africa with 5%.

2.5 Target Market

2.5.1 Local:

 Supermarkets and shops
 Eateries & Restaurants
 Big Hotels
 Wholesalers & Retailers

3.0 Production Process:
3.1 Process Technology

Production of yam includes the following simple unit operations:

 Yam Selection
 Weighing
 Washing
 Peeling and Slicing
 Parboiling
 Drying
 Milling
 Packaging
 The flour is packaged in moisture proof packaging materials.


 Washing: Raw yam is washed to remove dirt and impurities
 Peeling and Slicing: Washed yam is then peeled and sliced into pellets
 Parboiling: The pellets are put into hot boiling water for 10 to 15 minutes
 Drying: After boiling they pressure dried to remove moisture from the yam
 Milling: Dried Yam then milled into fine powdery form
 Packaging: Milled Yam pellets are then packaged into plastic bags for sale

3.4 Machinery & Equipment

The major machinery and equipment for production of yam flour are:

 Yam slicer,
 Dryer (Tunnel or Cabinet is appropriate),
 Yam par-boiler,
 Hammer mill with cyclone and Packaging machine.

FIIRO has designed and fabricated complete process line machinery and equipment for
yam flour. This is available at micro, small and medium scales. The Institute can also
deliver the complete process line on turn-key basis within eight weeks of commissioning
by the investor/ entrepreneur. The cost however, depends on the capacity which could
vary from 1ton/day to 5tons/day.

3.5 Raw Material

Yam tuber is the only raw material required for production of Instant Pounded Yam
Flour. Industrial processing and utilization of yam includes starch, poultry and livestock
feed, production of yam flour and instant-pounded yam flour production.
Major yam producing states in Nigeria include Adamawa, Benue, Cross River, Delta,
Edo, Ekiti, Imo, Kaduna, Kwara, Ogun, Ondo, Osun, Oyo, and Plateau .

3.6 Production Programme

Production programme for this small Pounded Yam Flour production is shown below:

Production Days/Annum 300
Production Volume/Day 2 tons
Production Volume/Annum 600 tons
Projection 5 years

4.0 Technical and Other Requirements

Organizations that are into branded yam flour are to seek registration with The National
Agency for Food and Drug Administration and Control (NAFDAC), which is the
regulatory agency in the country that monitors and controls the food and drugs sector.
NAFDAC insists that food base industries must not be close to a cemetery, abattoir,
petrol station, refuse dump, sewage system, saw mill, etc. Owners of this business need
to get clearance from NAFDAC before commencing production. The technical and
business architecture of the business will determine the overall success of the business.
For instance, in this business, the owner needs a good warehouse & a factory
environment for production.

Investors looking at the export markets must register with the Nigeria Export
Promotion Council (NEPC)

Drop your mail here to get the full comprehensive report for free

5.0 Manpower Requirement

A total of 8 personnel is needed depending however on the scale of production.

Designation Personnel Monthly Annually
Manager 1
120,000.00
1,440,000.00
Accountant 1
70,000.00
840,000.00
Marketer 1
70,000.00
840,000.00
Machine Operator 2
100,000.00
1,200,000.00
Factory Assistants 2
60,000.00
720,000.00
Security guards 1
15,000.00
180,000.00
Total 8
435,000.00
5,220,000.00

Hi, please am interested in the full free comprehensive report. Want to go into the business. Thanks.

victornwaiwu1987@gmail.com

If you want to go into EXPORTATTION BUSINESS, click on the link on my signature.....

vividbluemultimedia (at) gmail.com

Do you have that of bean flour? I would appreciate if I get that too.

victorking:
Hi, please am interested in the full free comprehensive report. Want to go into the business. Thanks.
victornwaiwu1987@gmail.com

Sent.

mrvictor:
vividbluemultimedia (at) gmail.com
Do you have that of bean flour? I would appreciate if I get that too.

Sent, call me or whats app for that of beans flour @ 08077918755

6.0 Key Success Factors/Practical Tips for Success

Some of the Key Success factors that will determine the success of this project include:

Products range selection and introduction of sitting areas.
Quality and Innovation in products.
Selection of location.
Pricing strategy.
Understanding of target customers, alternative availability (product differentiation).
Launching time.
Hygienic conditions

7.0 SWOT Analysis

Strengths
 Availability and easy accessibility to raw materials
 Access to cheap labour
 Thorough knowledge of target market and their peculiar needs


Weaknesses
 New entrant in a competitive business requiring initial high marketing costs
 Semovita is generally considered a more suitable alternative to Poundo yam since
poundo yam is often seen as artificial

lazybone1:


Sent, call me or whats app for that of beans flour @ 08077918755

Thanks. I'll call you ASAP

Opportunities
 Fast growing middle class population within Nigeria
 Increasing purchasing power of average Nigerian consumers living abroad
 Huge population of Nigerians living abroad
Threats
 Cheap imitation poundo yam flooding the market
 Non-compliance with strict NAFDAC regulations on production
 Infectious disease outbreaks

I will like to know the yam peeling machine you listed. Thanks.

sonnie10:
I will like to know the yam peeling machine you listed. Thanks.

Capacity or brand? Check @ FIIRO

Drop your mail to get the full report including the financial summary

8.3 Key Assumptions
 A tuber of yam weighs 8-10kg
 100 pcs will cost an average of N9,000
 On the average - 8kg yam will produce 1kg of poundo yam flour
 Average price of poundo yam flour is N300/kg
 Interest rate is at 20% per annum
 Repayment duration is 5 years
 Loan is 80% of the project cost, equity is 20%
 Revenue is projected to increase by 20% annually
 Expenditures is projected to increase by 5% annually
 Income tax at 30% / annum

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lazybone1:
Drop your mail to get the full report including the financial summary

Thank you for the write up.

Please send to travgate@ymail.com

trav:

Thank you for the write up.
Please send to travgate@ymail.com

Sent

Nice1

I served in a community where yam is in abundance, whn I landed thr I took upon myself to produce instant poundo yam, the process aint tedious but some factors must also b considered eg the specie of yam, some yam specie change colour after drying. Could hv uploaded pics but can't. If you want to strt small the most important Machine is drying machine. Other factors can be walked arround. A very wonderful bussiness if you are an entrepreneur/ investor

Wow, send the comprehensive report to ariessino26@yahoo.com.

I've just the perfect location for this.

Op can similar process be applied to cassava to extract starch and other products including pellets? You made mention of FIIRO machinery, never knew they are Nigerian o.

dboss444:
Nice1

I served in a community where yam is in abundance, whn I landed thr I took upon myself to produce instant poundo yam, the process aint tedious but some factors must also b considered eg the specie of yam, some yam specie change colour after drying. Could hv uploaded pics but can't. If you want to strt small the most important Machine is drying machine. Other factors can be walked arround. A very wonderful bussiness if you are an entrepreneur/ investor

Care to shed some light on your micro processing technique? I'll love to learn.

mikeakinyomi@gmail.com