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Investing in Commercial Rice Farming, Rice Milling and Packaging Plant
Rice has become a stable food in Nigeria. Of the total projected population figure of over 220million, about 80% feed on rice, hence the huge amount of money spent on importation of rice annually.
From our market survey a bag of 50kg of rice costs between N100, 000 and N120, 000 in the Nigeria market at the moment. The price is still very high when we consider that Rice is a staple food in Nigeria.
From our survey, the major cause of the increase in price of local production of processed rice is the cost of paddy, the raw material and other operational activities. Therefore, there is urgent need to increase in the production of paddy in Nigeria.
In Nigeria today, some states produce paddy rice in abundance due to favorable climatic condition for rice production. Some of these states are Enugu, Ebonyi, Anambra, Abia, Imo, Kwara, Edo, Ogun, Ondo, and some Nothern States such as Sokoto etc.
Technical Issues relating to the Project
Rice milling project will best be sited in these areas where rice is grown in order to reduce cost of transportation of the paddy.
To set up this project, a large space is required to dry paddy rice after harvesting.
The components of machines required to set up this project are cleaning facilities, Dehuller, Boiling tank, Polisher, Bagger and other miscellaneous equipments such as wheel barrows, weighing scales.
These machines can be fabricated locally. They can also be imported from Europe and some known Asian companies that specialize in the area.
Rice milling could be done on cottage, small, medium and large scale bases depending on availability of capital and the raw materials- paddy rice.
Output could be from 2MT to 150MT per day. Generally one metric ton of paddy rice yields about 60kg- 70kg of milled rice, depending on milling efficiency company management practice and the variety of rice purchased.
In the process of milling well parboiled rice free from sand, stones, unpleasant odour with less breakages, etc from purchased paddy, whole rice broken rice and bran are obtained. Whole rice are packed and sold for human consumption. Broken and Bran rice is further milled into ‘’Tuwo Shinkafa’’ (a flour meal) while bran is very important input for manufacturing dietary products like rice bran bread which has been acclaimed good for the decrease of blood cholesterol and livestock feeds.
The husks are used for the production of potassium Hydroxide solution or as fuel for milling plants.
It can be seen that virtually all parts of paddy rice is useful.
Estimated Cost of the Project
The likely cost of total project will not actually be stated safely unless one knows the scope (whether cottage, small, medium or large scale) a proposed investor would like to embark upon, the capacity to produce, the source(s) of the machinery, whether to construct his own building or rent one, the location etc.
Financial Estimates
Preliminary Investment (including feasibility studies) N2, 500,000
Plants & machinery N35, 000,000
Working capital N25, 000,000
Utilities N12, 500,000
Accommodation (Rented-variable) N10, 500,000
Contingencies N10, 000,000
Total N95, 500,000
Profitability of the Business
In conclusion, rice milling, an agro based business is profitable (65% on return on investment), and sustainable. It has low capital requirement, technical knowhow is complicated. The machinery and equipment are 100% locally available. The project has a short pay –back period.
It is highly recommended for serious and aggressive promoters, local and state Governments and private investors particularly those that are thinking good for this country.
For details on comprehensive and bankable feasibility studies, investment Advisory services, funding arrangements, please contact the writer.
Uba Godwin
56, Ishaga Road (1st floor), Surulere, Lagos
Tel; 01-7349363, 08023664368, 08034494437
E-mail; ubagodwin@yahoo.com
