SAINT BLESS CASSAVA AND PROCESSING

COMPANY LIMITED (SBCPC)

A BUSINESS PROPOSAL FOR CASSSAVA FARM AND

PROCESSING

EXECUTIVE SUMMARY

Cassava especially in the form of garri is one of the most popular and widely consumed food
crops in Cameroon.

Because it is such an important food in our dear country and an extremely versatile crop, it is in
fact, the cornerstone of food security in Cameroon. The competing needs for cassava cut across
both human and animal consumption. It is fast becoming a popular raw material in industrial
production and is now a preferred material for making biofuels. As Cameroon’s population
continues to grow rapidly, the demand for food staples like cassava is increasing. This high
demand for various forms of processed cassava is pushing prices to the ceiling. Several small
scale cassava farmers are making a fortune and additional income through this business.
According to a priori investigation, the profitable way for a farmer to market his cassava is to
add value to it; especially by selling it as garri.

The analysis of the present market situation shows that selling as toasted cassava granules (i.e.
garri) will survive the existing competition because demand for garri is elastic. On another hand,
an a priori fact gotten from a feasibility study carried out on the market for dried high quality
cassava peel DHQCP reveals a raving demand for it as well. Hence, my resolve to include
DHQCP is because it comes with no additional cost, but instead, with additional income, high
productivity and robust economics of scale.

This project is estimated to cost the sum of ten million nine hundred and eight thousand two
hundred and fifty france only (10,908,250 FCFA) is expected to return a profit of (9,128,250
FCFA) in the first year and break-even of all its invested capital within the first one and half (1
1/2) year of operation. The innovative features of the business lie mainly on the production
process. Instead of the usual manual production process, everything thing will be mechanized.
Saint Bless Cassava & Processing Company Ltd. will mechanize the production process from
peeling of the cassava to frying of the garri and processing of DHQCP into animal feed. By this
our cassava processing plant will be hygienic. Our product is consumed at all seasons by all
manner of people and animals due to its nutritional value.
Finally, careful assessment of the environmental and organizational factors using SWOT analysis
reveals a project that has a promising future and a high propensity of success.

TABLE OF CONTENT

Cover sheet 1

Executive summary 2

Table of content 3

List of tables 4

Introduction 5

Production Plan 7

Marketing Strategy and Plan 11

Organizational and Management Plan 12

Financial Analysis 14

SWOT Analysis 25

Conclusion 26

Appendix 27

Business Profile

Personal Information

Environmental and Social Impact of the Value Chain Business Activities

LIST OF TABLES

Table 1: Personnel Requirement

Table 2: Fixed and Variable Costs

Table 3: Recommended Inputs

Table 4: Labour input (per annum)

Table 5: Productive Asset Requirements

Table 6: Summary of Cost Estimate

Table 7: Summary of Returns

Table 8: Depreciation of Equipment

Table 9: Gross Margin Analysis (for each product)

Table 10: MS-Excel worksheet showing estimated NPV and IRR

LIST OF FIGURES

Fig1: Chart showing cost contribution of recommended inputs

Fig 2: Chart showing cost contribution of labour inputs

Fig 3: Chart showing cost contribution of productive assets

Fig 4: Chart showing summary of costs of inputs

Fig 5: Chart showing costs and depreciation values of processing equipment

Fig 6: Chart showing cash flow percent for five years

1.0 INTRODUCTION/BUSINESS OVERVIEW

Due to the very short shelf life (2-3 days) of harvested cassava tubers, inadequate road and
power infrastructure, most of the cassava produced in Cameroon is consumed locally, where it is
still unable to address the growing consumption. As a result, a lot of the cassava harvested every
year can get spoilt and never make it to the market. This wastage is estimated to be worth
millions of naira every year. However, by adding value to the cassava crop and processing it into
a ready-to-eat staple like garri, entrepreneurs can earn a very healthy profit on the open retail
market.

More so, it is worthy to note that as humans, animals, industries and biofuels continuously
compete for the valuable cassava crop, the prevailing local market prices will continue to
explode. Of all the forms of cassava that can generate income, garri is the cheapest and easiest
way for entrepreneurs to enter and exploit the processed cassava market. Garri production is a
low-cost and largely traditional process and can be done on a small scale.

Garri is one of the most staple Cameroonians diets because not only is it cheap, but it is easy to
make and can be taken in majorly two ways that are fast to prepare. Those in the garri business
know that this is the fastest way to make money especially in the agro processing industry. Garri
is one of the major products from processed cassava the staple food for almost all Cameroonians,
as about 75% of Cassava is processed into garri. Some entrepreneurs are going into the garri
processing business especially as this product is recession proof. The recent economic downturn
in the country has seen more and more people turning to garri. Also, another factor in favour of
the garri processing business is the growth in the population which has pushed the demand for
garri and has also caused more garri processing businesses to crop up to be able to meet the
growing demand.

Cassava peels are perishable and are mostly disposed of by burning or allowing them to rot in
heaps, causing pollution. On the other hand, several researchers have confirmed the suitability of
cassava peel for feeding livestock and the potential of cassava peels as a good substitute for
maize for all classes of both ruminant and non-ruminant animal. High levels of HCN in cassava
peel based products are reduced substantially through the innovative processing where grating,
de-watering, fermenting and sun drying results in reduction of hydrocyanic acid (HCN) levels
below the permissible levels of 100 ppm. Cereal production particularly maize in Cameroon is
not sufficient to cater for the growing demand of food, feed and industrial uses. Identifying
alternate feed resources as a substitute for maize would reduce feed costs and spare maize (to a
large extent) for food and industrial uses.

 Description of Business

Many people are into cassava farming and garri production in Cameroon, yet the local and
international demand is still high. More so, many feed millers are demanding for the Dried High
Quality Cassava Peel (DHQCP) mash because it’s cheaper than and as efficient as the maize
substitute. To thrive in the business as a new entrant, creativity and innovativeness in farm
management, quality control, effective garri marketing and efficient delivery of dried high
quality cassava peel is necessary. The branding and packaging of the garri and DHQCP is
expected to be diligently explored and exploited. The company and brand name is Saint Bless
cassava & processing Company Ltd. Inclusion of DHQCP production is of essence because it
creates additional income with no additional cost. This is due to waste conversion propensity and
the economics of scale (in using the same set of machine for both garri and DHQCP processing).

The proposed farm will be 1000 hectares of land at Bafut sub-division. The choice of this
location is due to the good topography (gently sloppy in nature) in the division and the closeness
of the Bamenda city, where the demand for garri is very high. With the increasing rate of
population and also the insufficient cassava farmers /processers in Cmeroon, and with high
number of fish farmers/ animal feeds processers hence, our DHQCP has a ready market.

 Vision and Mission Statement

The vision of the proposed project is to create an investment pool that will generate an
independent and continuous source of income. The mission is to create supplementary
employment opportunities (every year) by sustaining the business, expanding, thereby etching a
landmark in the industry (in the long run).

 Business Objectives
The objectives of the proposed cassava farming for garri and Dried High Quality Cassava Peel
DHQCP production project are:

 To maximize profit in the short run;

 To realize a profit differential on yearly basis; and

 To sustain the improvement in productivity and market capacity over time.

2.0 Production Plan

2.1 Production Planning Model for Cassava

2.1.1 Cassava Management

Under normal conditions, about 90% of all cassava cuttings planted sprout within 2 weeks of
planting. Cuttings that do not sprout should be removed and disposed of away from the cropping
area in order to prevent the transmission of any disease that may have caused the failure of the
cuttings. New healthy cuttings should be acquired and planted by the third week after the initial
planting in order to maintain the planned plant density. However, the new cuttings should not be
planted in exactly the same hole from which the failed cuttings were removed, to avoid the risk
of repetition of the original problem. Drought conditions could cause a much higher failure rate.
In such a situation, the farmer should wait until rains resume before replacing failures.

2.1.2 Weeding

Weeds can retard the growth and reduce the performance of cassava. A well-weeded cassava
farm can yield 30–40% more roots than a poorly weeded farm. Weed control forms a significant
part (30% – 50%) of the labour costs in cassava production. The exact weeding frequency will
depend on the type and severity of the local weed problem, but in general: It is important to start
weed control 3–4 weeks after planting. This can be done at the same time as the replacement of
the failed cuttings (in week 3) in order to maximize the use of labour. Weeding should be
repeated in weeks 8 and 12, while the final weeding should be done between 20 and 24 weeks
after planting, depending on the rainfall. During dry phases weeding may not be required but it is
always recommended to destroy weeds before dry phases and after the resumption of rains. Once
the canopy of the cassava and of the intercrops (if any) has closed the shading will effectively
control most weed growth. The overall total number of weeding cycles depends, in part, on the
resilience of the weeds, and this depends on agro-ecological conditions. Weeding can be done
manually (hoe and cutlass), mechanically (using a tractor) or chemically (although there are no
specifically prescribed herbicides for cassava). However, mechanical weeding beyond the first 4
weeks after planting can damage the roots. Therefore, manual or chemical weed control is
preferred after this period. Farmers should use their local knowledge to decide which weeded
material should be left on the plot or removed and discarded. Generally, small broad-leaved
weeds can be left on the field because they will die from the heat of the sun and become mulch.
Bulky weeds, weeds with rhizomes and weed species with the capacity to form roots from stem
pieces tend to re-sprout if cut and left on the soil surface, so the farmer should uproot and
dispose of these types of weeds away from the field. Tall grasses should be uprooted and
removed from the field before they flower in order to prevent seed formation and germination,
which will further propagate the weed species.

2.2 Production Plan: Garri Processing

Processing cassava roots into garri takes several steps, and these are:

 Peeling and washing cassava roots;

 Grating cassava roots into mash;

 De-watering and fermenting mash into wet cake;

 Sieving wet cake into grits and roasting grits into garri;

 Bagging and storing the garri;

 Maintaining good hygiene compliance.

2.2.1 Peeling and washing cassava roots

Freshly harvested cassava roots are covered with soil and dirt and some may be damaged or
rotten. Only healthy roots (without rot or other damage) should be transported to the factory. At
the factory, the roots are peeled to remove the outer brown skin and inner thick cream layer and
washed to remove stains and dirt. The water source should be checked regularly to ensure it is
not dirty or contaminated.

2.2.2 Grating cassava roots into mash

Cassava roots are traditionally grated into a mash or pulp as part of the process to remove
cyanide and make the roots safe to eat. Traditional cassava graters are usually made from
perforated metal sheets. These rust quickly and are difficult to keep clean. They are also very
slow and labour intensive to use. Mechanized graters are needed to produce a sufficient quantity
of cassava mash to meet market demands and standards. Smallholder processors therefore need
to learn how to use and maintain these machines.

2.2.3 De-watering and fermenting mash into wet cake

De-watering and fermenting complete the process of removing cyanide from the cassava mash.
This is done traditionally by using stones or logs as weights to press excess water out of the bags
of cassava mash. The bags are then left to drain and ferment for a few days. As with traditional
graters, these methods are slow and unhygienic, and are therefore not suitable for a cassava
processing business. Several improved methods are available.

Bagged cassava mash can be left on the fermentation rack for one or more days before de-
watering. Alternatively, the bags of cassava mash can be pressed for the required number of
days, during which time the mash will ferment. At the end of the fermentation period, the mash
will become a firm, wet cake. Fermentation periods of longer than one or two days will produce
very sour products. Consumer tastes and preferences will therefore determine the length of the
fermentation period.

2.2.4 Sieving and roasting grits into garri

Garri is made by sieving the wet cake into small pieces – known as grits – and then roasting or
frying the grits in a hot frying tray or pan to form the final dry and crispy product. Garri is
normally white or cream, but will be yellow when made from yellow cassava roots or when fried
with palm oil. It is important to make sure the taste and smell is acceptable to local consumers.
The product should be free from mouldy, insects (dead or alive), dirt and any other material that
could be hazardous to health.

Garri is usually classified by its particle size:

 Extra-fine: passes through 0.25 mm to 0.5 mm aperture sieve

 Fine: passes through 0.5 mm to 1 mm aperture sieve

 Coarse: passes through 1 mm to 1.25 mm aperture sieve

 Extra-coarse: passes through 1.25 mm to 2.0 mm aperture sieve.

2.3 Production Planning of Dried High Quality Cassava Peel

An innovative processing technology for converting fresh peels into high quality cassava peel
(HQCP) mash for use as livestock feed has been developed. The process is simple and can be
carried out by small-scale processors, more than 80% of them women, to transform waste into a
valuable feed resource, generate new incomes, create employment, improve livelihoods, and
clean up the environment around cassava processing centres. The various steps followed in
processing peels into DHQCP are listed below:

 Sorting;

 Grating;

 Pressing;

 Sieving;
2.3.1 Sorting

The quality of the finished product is as good as the quality of the raw material used so cassava
peels that enter the process should be fresh (harvested the same day) and free from contaminants.
When processing is delayed beyond a day, the peels start to ferment and become soggy/slippery
and difficult to grate. Stumps, large-sized wood tubers, and other foreign materials have to be
sorted out and discarded before grating the peels to avoid damage to the rasper.

2.3.2 Grating

Grating has to be done three times because of the tough nature of peels. With each grating, the
particle size reduces gradually. The reduced particle size facilitates rapid dewatering, drying, and
easier handling.

2.3.3 Pressing

Pressing the grated peel requires a hydraulic jack, wooden planks, woven bags, and a metal
frame which holds loaded bags of freshly grated peels. Grated peels are packed in small
quantities of 8−10 kg and the bags are stacked in the metal frame. Using planks and jacks, the
grated peels are squeezed to rapidly get rid of as much water as possible.

Approximately 50% of the weight of grated material is lost as the water is removed during this
process. The resulting cassava peel cake after dewatering has around 38−42% moisture and has a
shelf life of 5−7 days. As is, cassava cake can be fed directly to cattle, goats, sheep, and pigs.

2.3.4 Sieving

To process it further into dry mash, cassava peel cake is re-grated to loosen it into a free flowing
material that can be subjected to sieving to separate the fine mash (lower fiber, high energy
content) from coarse mash (higher fiber, lower energy content). Sieving can be done manually or
by using a mechanical device.

3.0 Marketing Strategy and Plan

3.1 Description of Products

In garri business, the colour, taste and friability of the garri particles determine the market. More
so, consumer preference varies from place to place, and region to region. Hence, Saint
BlessCassava & Processing Ltd. must give due consideration to the consumer’s choice of
quality that will satisfy their needs. More so, DHQCP will be of two (2) kinds: the fine mash (for
poultry, fish, and pigs); and the coarse mash (for cattle, sheep, goat and pigs).

3.2 Product Packaging and Delivery

For easy sale and delivery of garri locally in stores, restaurants, school hostels and offices, it is
preferred that the garri are neatly packed in customized nylon or sack bags. During festivities,
they can be packed in hampers, colourful and portable bags. It can be packed in varying smaller
sizes so as to reach a broad class of consumers. Furthermore, the DHQCP (both fine and coarse)
will be packaged in the 50kg rubber bags (sacks) for easy storage and delivery to feed millers.

3.3 Competition and Target Market

While carrying out feasibility survey, questionnaire were administered to 1000 randomly
sampled buyers (across 5 major markets in Cameroon,Nigeria,Dubai); making a total of 1000
respondents. Out of which, 95% of them said they will prefer packaged garri to the open market
ones at the prevailing market price. Hence, a ready market for packaged garri is guaranteed.

More so, when carrying out feasibility study, 15 outstanding feed millers in Bamenda were
reached out to and they have all shown ardent interest in buying both fine and coarse mash of the
DHQCP. They are ready to buy 50kg of DHQCP (both fine and coarse mash) at 4.500 FCFA. In
other words, there is ready market for DHQCP.

4.0 Organizational and Management Plan

4.1 Ownership of the Business

The proposed cassava farming for garri and Dried High Quality Cassava Peel (DHQCP)
production business will be solely owned by SAINT BLESS CASSAVA AND PROCESSING
COMPANY LIMITED (SBCPC).

4.2 Management and Personnel Requirement

The proposed farm will require a qualified farm manager with profound knowledge and
experience in farm management, two farm assistants with innate skill and experience in cassava
farming, two processors with adequate knowledge and technical know-how of both garri
production and DHQCP production, one Sales person/store keeper with adequate knowledge of
record keeping and marketing skills, and one security officer who is physically fit. Table 1
explains further in details:

Table 1: Personnel Requirement

Personnel Attitude Skill Knowledge Qualification

FARM Must be zealous, Highly skilled in Knowledgeable Minimum of

MANAGER determined, various in general farm HND/Bsc.
dedicated, and innovative management and
 dogged techniques in record keeping
cassava
processing
FARM Must be timely, Highly skilled
Having a robust Minimum of
PROCESSOR diligent, smart, and experienced and adequate secondary school
dynamic and in handlingknowledge in certificate
open to change machines cassava
processing
FARM Must be time Innate skill in Wealth of Minimum of
ASSISTANT conscious, cassava knowledge in primary school
hardworking and production cassava certificate
honest production
garnered through
experience
STORE Must be diligent, Highly experience Having knowledge Minimum of
KEEPER/SALES time conscious, in record keeping, on book keeping OND
PERSON focus, honest, a bust have the ability and selling
good customer to convince
service and smart customers and polite
in speaking
SECURITY Must be very Communication Must have Minimum of
vigilant and focus skills, conciliatory knowledge on how primary
at all time. attitude, Hard work, to serve Client’s school
flexible and needs certificate
physical fitness

4.3 Details of Salary Schedule

The farm manager is assumed to be paid 25,000 FCFA per month while each farm assistant will
be paid 20,000 FCFA monthly, sales person/store keeper will be paid 20,000 FCFA per month,
the two permanent workers will be paid N 10,000 per month each, and security will be paid
10,000 FCFA per month.

5.0 FINANCIAL ANALYSIS

5.1 Cost-Returns Analysis

The following table summarizes all the costs that would be involved in executing this project.

Table 2: Fixed and Variable Costs

Fixed Cost FCFA FCFA

Peeling Machine 2,500Kg/day 550,000

Stainless steel Grater 270,000

1000Kg/hr

2 hydraulic press de-watering 220,000

machine 32,000Kg/batch each

Sieving Machine 5.5hp petrol 180,000

engine

Farm fence 500,000

Automatic Garri fryer petrol 650,000

engine

Petrol engine garri grinder 150,000

Weighing machine 100,000

Packaging machine 179,000

Farm house 500,000

Borehole, borehole stand, and 700,000

(2) two 500L water tanks

Procurement of Farm land 3,000,000

Generator 180,000

Cutlasses 1 dozen 24,000

Files 1 dozen 6,000

Hoes 2 dozens 48,000

Nap sack sprayers (3) 19,500

First Aid Box 10,000

Total Fixed Cost 7,286,500

 7,286,500

Variable Cost

Land preparation, (cutting of 500,000

trees, clearing and stumping)

Making of Ridges 350,000

Cassava cutting for 5 hectare 125,000

15 bags of fertilizer for 5 82,500

hectare

56,250
Agro-chemicals (super gro
and insecticide) for hectare

Fuel 135,000

Planting (10 workers) 90,000

Weeding (20 workers) 562,500

Fertilizer Application (5 40,000

workers)

Spraying of chemicals (5 37,500

workers)

Salary for manager per annum 360,000

( 30,000 per month)

Salary for 2 processors per 480,000

annum, (20,000 per month)

Salary for Sales person/store 240,000

keeper per annum (20,000 per
month)

240,000
Salary for 2 permanent staffs
per annum, (10,000 per
month)

Salary for security per annum, 120,000

(10,000 per month)

Working Capital 123,000

Miscellaneous 80,000

3,621,750

3,621,750

TOTAL 10,908,250

Table 3: Recommended Inputs

Inputs Type Qty Qty Unit Cost N Total Cost N

needed/ha needed/5ha

Fertilizer NPK 150kg 750kg 5,500 82,500

15:15:15

Soil Super gro 2.5L 12.5L 15,000 37,500

improvement
chemical

Insecticide DD force 1.5L 7.5L 45,000 18,750

Cassava TMS 419 25 bunches 125 bunches 1,000/bunch 125,000

Fuel PMS 10L / day 750L/90days 32,625 135,000

TOTAL 398,750
 Fig1: Chart showing cost contribution of recommended inputs

Table 4: Labour input (per annum)

Labour Required Quantity Cost/Person/annum Total FCFA

FCFA

Farm Manager 1 360,000 360,000

Permanent Farm 2 120,000 240,000

Assistants

Processors 2 240,000 480,000

Sales person/store 1 240,000 240,000

keeper

Security 1 120,000 120,000

1,440,000
Total

Fig 2: Chart showing cost contribution of labour inputs

Table 5: Hired labour Input In the Farm (per 10 hectare)

Labour required Quantity of worker Cost/worker/ 10 Total FCFA

required hectare FCFA

Planting of cassava 15 18,000 90,000

cuttings

Weeding 3 times 25 37,500 x 3 time 562,500

weeding

Fertilizer application 10 8,000 40,000

Spraying of 3 7,500 37,500

chemicals

Land preparation 20 25,000 500,000

( cutting of trees,
cleaning and
stumping the land)

Making of ridges 1 (tractor) 350,000 350,000

Total 1,580,000

Fig 3: Chart showing cost of contribution of hired labour input

Table 7: Productive Asset Requirements

ITEMS Quality Unit Cost FCFA Total FCFA

Peeling Machine 1 550,000 550,000
2500Kg/day

Stainless steel Grater 1 270,000 270,000

1,000Kg/hr

Hydraulic press de- 2 110,000 220,000

watering machine
32,000Kg/jack

Sieving machine 5.5 1 180,000 180,000

Petrol engine

Garri fryer petrol 1 650,000 650,000

engine

Garri grinder 10 1 150,000 150,000

bags/day

Weighing machine 1 100,000 100,000

Packaging machine 1 150,000 179,000

Farm house 1 500,000 500,000

Fencing of Farm 1 500,000 500,000

1 Borehole, 1 1 550,000 + 50,000 + 700,000

borehole stand and 2 100,000 = 700,000
water tanks

Land 5 hectare 3,000,000 3,000,000

Generator 1 180,000 180,0000

Cutlasses 12 2,000 24,000

Files 12 500 6,000

Hoes 24 2,000 48,000

First Aid Box 1 10,000 10,000

Nap sack sprayers 3 6,500 19,500

Total 7,286,500
 Fig 4: Chat showing cost contribution of productive assets

Table 8: Summary of Cost Estimate

Description of activity Cost Estimates N Remark

Labour Requirement - Farm manager
permanent works 1,440,000 - Farm assistant
- Processors
- Sales person/store
keeper
- Security
Input support - Fertilizer
398,750 - Insecticides
- Super gro
- TMS 419 Cassava
- Fuel
- Stainless steel Grater
Productivity assets - Cassava Peeler
- Hydraulic press
Presser
7,286,500 - Farm fence
- Sieving machine
- Generator
- Fryers
 - Borehole, borehole
stand and water tanks
- Garri grander
- Weighing machine
- Packaging machine
- Land
- Cutlasses
- Files
- Hoes
- Farm house
Hired labour requirement 1,580,000 - Land preparation
- Making of ridges
- Planting of cassava
Cuttings
- Weeding
- Spraying of chemicals
- Fertilizer application
Working capital 203,000 - Working capital
- Miscellaneous
TOTAL 10,908,250 ,

Fig 5: Chart showing summary of costs of inputs

RETURNS

Returns from Sale of Garri

The type of variety that will be planted (i.e. TMS 419) will give about 20 tons of cassava (per
hectare) after 10 months. Therefore, from the available 10hecters of land, 200 tons of cassava
tubers are expected. And experience has it, that those 4 tons of cassava tubers is equivalent to 1
tons of garri, where 1 ton is equal to 1,000Kg. Therefore; 200/4 = 50 tons, where 50 tons is equal
to 50,000Kg. And the garri will be bagged in 100Kg rubber. Therefore, the total number of bags
realizable form 50 tons is 500 bags of garri.
Hence, (500 x 30,000) = 15,000,000 FCFA

Returns from Sale of Dried High Quality Cassava Peel

At a start, Saint Bless Cassava & Processing Company Ltd. will randomly source for 150 tons
of cassava peels in the first year of production. 150 tones is equivalent to 150,000kg. And the
Dried High Quality Cassava Peel (DHQCP) will be bagged in 50kg rubber bag. Therefore, the
total number of bags realizable from 150 tones is 3,000 bags.

Hence, (3000 X 3000 FCFA) = 9,000,000 FCFA is the expected returns from DHQCP

Table 9: Summary of Returns

Production Estimated Yield Packaged Unit Unit Price Total Value

Garri 20 50 30,0 15,000,0

0tones/10ha 0 bags 00 00

DHQCP 1 3,00 3,00 9,000,00

50 tones 0bags 0 0

TOTAL 24,000,0
REVENUE 00

The depreciation of hoe, cutlass, wheel barrow, grater, presser and fryer is shown in table 10;
using the straight line method:

i.e. dt = C – S

Where dt = depreciation;

C = cost of asset;

S = salvage value.

L = Useful life

Table 10: Depreciation of Equipment

ITEM COST (FCFA) SALVAGE USEFUL LIFE DEPRECIATION
VALUE (YRS) (FCFA)
(FCFA)

Grater 270,000 100,000 10 17,000

Presser 220,000 70,000 10 15,000

Fryer 650,000 250,000 10 40,000

Generator 180,000 30,000 10 15,000

Borehole 500,000 200,000 10 30,000

Peeler 550,000 200,000 10 35,000

Sieving machine 180,000 50,000 10 13,000

Garri grinder 150,000 60,000 10 9,000

100,000 25,000 10 7,500

Weighing
machine
Packaging 150,000 40,000 10 11,000
machine

Total 192,500

Fig 6: Chart showing costs and depreciation values of processing equipment

Therefore, profit from the harvest in the production year is:

Profit = TR – TVC – Total Depreciation

= (12,750,000 – 3,621,750 – 192,500)FCFA

= 8,935,750 FCFA

While,

Gross Margin = TR – TVC

= (12,750,000 – 3,621,750) FCFA = 9,12 8,250FCFA

Return per capital invested= Net income / Gross return

= (24,000,000 – 10,908,250) /9,128,250

= 13,091,750 FCFA/ 9,128,250 FCFA

= 1.40

The return per capital invested was found to be 1.40

This means that for every 1 invested in this project, a 20K gain will be realized.

The Benefit-Cost Ratio is estimated as follows:

Benefit-Cost Ratio (BCR) = Benefit / Cost

= ₦ 12,750,000 / ₦ 10,908,250

= 1.168 ≈ 1.2

Hence, this project can be adjudged to be a viable venture since the Benefit-Cost Ratio is
greater 1.

Table 11: Gross Margin Analysis (for each product)

Production Total Revenue Total Variable Cost Goss Margin (TR –

TVC)
Garri 3,750,000 3,621,750 128,250
DHQCP 9,000,000 3,621,750 5,378,250
OVERALL GROSS 12,750,000 5,506,500
MARGIN

5.2 Break-Even Analysis

The Break-Even Point is the point or level of financial activity at which expenditure equals
income, or the value of an investment equals its cost, with the result that there is neither a profit
nor a loss. Hence, any return accruable thereafter is a continuous gain or plus to the business.

TFC = N 7,286,000

Unit VC = N 1,207

Unit Price = N 3000

Contribution = Unit Price – Unit VC

= N (3000 – 1,207)

= N 1,793

Note that Contribution is the gross margin per unit of DHQCP.

To break even in this proposed DHQCP production, the amount of bags that must be sold:

TFC / Contribution;

i.e. Break-Even Point = N 7,286,500 / N 1793

= 4,063.8 ≈ 4,064

In order words, one will break even producing DHQCP immediately after the sale of 4,064bags
of DHQCP in the second year of production. Therefore, any return accruable from subsequent
sales is a profit in continuum. Hence, signifies the birth of a surplus after paying for the initial
outlay. Therefore, payback period is less than a year and a half (i.e. 1 1/2years).

5.3 Investment Analysis

Net Present Value (NPV) and Internal Rate of Return (IRR) were used to assess the risk of the
farm. The NPV is equal to the present value of future net cash flows, discounted at the cost of the
capital. The NPV, calculated with 15% discounting rate was positive, implying that the venture
is viable. The payback period (expected number of years required to recover the original
investment) is about 1 ½ years. The quick payback period implies low risk in the proposed
investment.

More so, given the positive NPV, the project can therefore be accepted as viable. We will also
accept the feasibility and sustainability of the proposed garri cum DHQCP production given the
fact that IRR (i.e. the rate at which Net Present Value equals zero) is greater than the assumed
market interest rate (i.e. 117% > 15%). It therefore implies that if the project is established with
an initial outlay of ₦ 10,908,250 on a loan of the said amount, then a surplus of ₦ 31,831,614 is
realizable (after paying the initial outlay) in 5 years’ time because the internal rate of return
(which is 117%) is about 9 times the assumed interest rate on loan (which is 15%).

Given that the status quo (of labour cost and prices of other input materials) remains the
same in the next 5 years, the NPV and IRR are analyzed as follows:

Table 12: Table showing estimated NPV and IRR

NPV AND THE CASSAVA ENTERPRISE FOR THE FIRST 5 YEARS 15% DISCOUNT
RATE

YEA CASH PRESENT COMPUTATION

R
 FLOW VALUE NPV = Cash Flow
(1+r)^i
N N

-10,908,250 -10,908,250

1 12,750,000 11,086,956.52 12,750,000

(1+0.15)^1

2 12,750,000 9,640,831.76 12,750,000

(1+0.15)^2

3 12,750,000 8,383,331.96 12,750,000

(1+0.15)^3

4 12,750,000 7,289,875.76 12,750,000

(1+0.15)^4

5 12,750,000 6,338,868.45 12,750,000

(1+0.15)^5

NPV=TOTAL PV ( for 5
years)–INITIAL IRR=117%
OUTLAY

NPV=(42,739,864.45-
10,908,250)=31,831,614.45

The IRR is the discounting rate that equates the present value of the project’s expected cash
inflows to the present value of the project’s cost. If the net present value exceeds the cost of the
funds used to finance the project, a surplus remains after paying for the capital. The IRR for this
proposed project is 117%, implying that the venture is profitable to operate even if the planning
horizon is only five years. In fact, the IRR is 9 (nine) times the discounting rate.

The findings of the analysis indicate that the proposed garri processing cum DHQCP production
is viable and financially feasible. The results obtained indicate a positive NPV and acceptable
IRR. Hence, this business is sustainable because production and market capacity can be built to
sustain improvements over time.

5.4 Performance Indices of Garri Production

The performance indices include:

 Gross Margin = Total sale income – Total variable cost

 Gross Margin per plastic of garri = Gross Margin / Total Production (plastics)

 Production costs of garri per plastic = Total variable cost / plastic of garri produced

 Percentage return on variable cost = (Gross Margin /Total variable cost) x 100

 Percentage return on investment = (TR / TC) X 100

 Percentage of gross margin = (Gross margin / Total cost) X 100%

Gross Margin = Total sale income – Total variable cost

= N (12,750,000 – 3,621,750)

= N 9,128,250

Gross Margin per bag of garri = Gross Margin / Total Production

= N 9,128,250 / 250 bags = N 9,128,000

Production costs of garri per bag = Total variable cost / bags of garri produced

= 3,621,750/ 250

= 14,487 ≈ 2292

Percentage return on variable cost = (Gross Margin /Total variable cost) X 100

= (N 9,128,250 / N 3,621,750) * 100

= (2.52) * 100

= 252%

Percentage return on investment = (TR / TC) X 100

= (N 12,750,000 / N 10,908,250) * 100

= (1.17) X 100

= 117%

Percentage of gross margin = (Gross margin / Total cost) X 100%

= (N 9,128,750 / N 10,908,250) X 100%

= 0.84 X 100%

= 84 %

6.0 SWOT ANALYSIS

It is not enough to emphatically adjudge a business profitable and viable without a proper
analysis of Strengths, Weaknesses, Opportunities and Threats at one’s disposal. A detailed and
convincing SWOT analysis is the mainframe of any successful business. Hence, SWOT analysis
of this proposed project is pivotal to its success. The strengths, weaknesses, opportunities and
threats of this proposed project are as follows:

Strengths: One of the factors critical to a successful outcome of any investment at all, is the
availability of time to personally concentrate on its management. I do have the time, passion,
determination and tenacious doggedness beaming on all shady paths to breakthrough. I believe
so much in the project. More so, am fully equipped with the technical know-how and skills of
cassava farming, garri production and production of dried high quality cassava peel (for feed).

And I will effectively and efficiently manage the project given my wealth of experience in
project management (especially with regards to farming), and skills that will come to bear in all
of the production and marketing processes involving administration, procurement, inventory
management and the supply chain.

Experience, they say, is the best teacher. It’s indeed a pedagogue that stands as a guide in the
path of any successful entrepreneur, making him more courageous, determined and wise.
Lessons from my past business management experience have been learned and would be re-
invigorated while executing future plans to extract the best from my courage, devotion and
wholesome commitment.

Weaknesses: Paucity of funds is usually a greater constraint. Without means of finance, even the
best of ideas may not come to fruition or reality. However, aside the available equity, additional
funding will be sourced from a reputable commercial bank to offer the necessary financial
backbone.

Opportunities: The high market demand for garri and dried high quality cassava peel DHQCP
leaves a loop hole to exploit and a goldmine to diligently explore.

Threats: At any season in mono-cropping, most of buffer crops/weeds are generally absent or
limited, hence, exposing a planted sole crop to insect pest infestation. To curtail this however,
maize would be planted along side with the cassava which will in turn give a marginal income.
Threat of theft is unlikely to rear its ugly head in our location because for over ten years I’ve
been working on the farmland, I’ve never recorded any incident of theft. There is also no
foreseeable threat of the herdsmen on the farmland, given its location.
7.0 CONCLUSION

The proposed cassava farming for garri and Dried High Quality Cassava Peel (DHQCP)
production has a reasonably high chance of success at the start and it’s profitable. Aside the
profitability, most fascinating about this proposed project is that it directly depicts sustainable
agriculture as it were, because it increases productivity, bolsters economics of scale, its
environmentally sound, and economically viable and ensures continuous stream of income.
Increasing employment generation is also a key benefit of this enterprise as the business expands
over time. The products have the propensity to be produced efficiently and can be marketed
effectively.

APPENDIX

BUSINESS PROFILE

NAME SAINT BLESS CASSAVA COMPANY LIMITED (GGFPC)

CROP OF INTEREST CASSAVA AND GARRI PRODUCTION

REGION NORTH WEST/ BAMENDA/MEZAM/BAFUT SUBDIVISION

SIZE OF FARM LAND 1000000 HECTERS

ENVIRONMENTAL AND SOCIAL IMPACT OF THE VALUE CHAIN BUSINESS

ACTIVITIES

S/N Environment Pro Responsibil Cos

and Social cessed Key ity Time ts (N)
Impact Mitigation Indicator Frame
Identified Measures Per

01 Low income Conversion Cassava Production of 10,908,250

due to crude of cassava value garri 5 years
farming into Garri addition

02 Environmental Conversion Waste to Production of No

pollution of cassava wealth DHQCP 5 years additional
peels to feed cost

03 Youth Creating Employment Employing 1,440,00

 unemployment additional generation rural youths as 5 years 0
job FAs and
opportunities processor

04 Lack of Sinking of Provision of Extending 500,00

portable water borehole in portable water tap for 5 years 0
the farm water neighboring
rural
communities

PS.: * means, even though 5 years was stated as time frame; however, the project is intended to
be sustained for life

**means there will be no additional cost as a result of economics of scale because it’s the same
machine, material and man power used in garri production that will be also used in DHQCP
production.

MAJASSI MUMA BLESS

NORTHWEST REGION/ MANKON BAMENDA
Email: saintsbless99@gmail.com
Tel: +237651386204

Thank you.