Sugar production - The Minister of Trade announced recently that Nigeria had been losing about N568 billion yearly to importation of brown sugar, representing 98 per cent of brown sugar consumed in the country.
The Federal Government of Nigeria through the Minister of Trade & Investment, Mr. Olusegun Aganga, announced on the 16th December, 2012 that the Government will ban the importation of packaged sugar (finished cube and granulated) into the country this year 2013. The prohibition is in line of the new sugar policy intended by the government to replicate the success achieved with the backward integration policy in the cement industry.
The importation of raw sugar will stop being an all-comers' affair under the reviewed importation policy to be introduced in the sugar industry sub-sector from January, 2013.
According to the new policy, a full era of backward integration will begin which will tie importation of brown raw sugar by producers and manufacturers in the country to the quantum of their local productive capacity in sugar cane cultivation and development, either as fresh growers or out growers.
The Minister added that the new shift of focus from mass importation to increased local production was aimed at increasing local production of sugar cane to processed sugar; creation of employment and conservation of the nation's foreign reserves.
This calls for investment in the in the sector either as a farmer, producing sugar cane or a manufacturer establishing a mini-sugar cane processing plant to produce granulated sugar and cube sugar as well.
Sugarcane (Saccharum sp.) is one of the most important crops in the world because of its strategic position and immense uses in the daily life of any nation as well as for industrial uses aimed at nutritional and economic sustenance. Sugarcane contributes about 60 per cent of the total world sugar requirement while the remaining 40 per cent came from sugar beet.It is a tropical crop that usually takes between 8-12 months to reach its maturity. Matured cane may be green, yellow, purplish or reddish considered ripe when sugar content is at its maximum
Nigeria is one of the most important producers of the crop with a land potential of over 500,000 hectares of suitable cane field capable of producing over 5.0 million metric tons of sugarcane. If processed, it will yield about 3.0 million metric tons of sugar (NSDC, 2003). Nigeria is noted to be abundantly blessed with human, water and environmental potentials for the production of sugarcane. Areas with high potentials for commercial sugarcane /sugar production have been identified through studies sponsored by the Federal Ministry of Industry.
There are about four major sugar production companies in Nigeria at the moment.The combined installed capacities of these mills are about 120,000 metric tonnes of processed granulated white sugar per annum. However, total domestic production has fluctuated between 16,000 and 50,000 tonnes annually, which are able to satisfy only about 5 per cent of the total national demand for sugar.
The sugar industry is the major user of the sugarcane as its raw material source their requirement from local producers through the concept of out growers scheme of cane delivery. This is the major practice in Nigeria. Under this concept, sugarcane farmers are organised to grow and supply sugarcane for processing by the existing sugar plants.
Apart from producing sugar cane, one can also invest in processing of sugar cane into sugar granules and cube sugar production and packaging.
The consumption of sugar all over the world in general and Nigeria in particular is very high. It has been established that the consumption of granulated sugar has been on increase. With overall sugar consumption in the region of 1.5 million tonnes per annum, Nigeria is the largest consumer of sugar in Africa apart from South Africa, and the industry is still dependent on raw sugar imports.
Health wise it is not advisable and considered medically wrong to consume granulated sugar, which is made specifically for industrial use.
In the developed world it is widely discouraged to consume granulated sugar, instead of cube sugar carefully produced in a very hygienic condition.
Research has shown that here in Nigeria, the consumption of granulated sugar has been on increase due to the higher cost of carefully produced and packaged cube sugar. From our market research, only two major companies produce cube -sugar in the country at the moment. This two are serving a population figure of over 150 million people in Nigeria and other African countries.
The high level of demand and cost of production has led to the increase in price of the well packaged cube sugar. The supply therefore has not matched effectively with the very high level of demand. The demand has outweighed the supply position. Therefore more hands are required to increase the supply of cube-sugar production in the country.
Prior to our research on this project, we felt that the project requires billions of Naira to set up. After our studies, we found out that one can set up this profitable project at a very much lower cost.
It is therefore a project anybody can establish and run in either cottage, small, medium or even large scale depending on the available funds.
In this brief investment profile, we discussed on the technical, financial, marketing and investment appraisal for setting up and running an aspect of this lucrative venture- establishment of mini- cube-sugar production and packaging plant. One can also combine the sugar cane plantation, processing of the sugar cane into sugar granules and cube sugar.
Location of the Proposed Project
The proposed cube-sugar production plant can be established in any apart of the country. One can set up anywhere in the country provided that there is electricity and enough space of land for the project. Other factors such as good road networks, nearness to markets and related factors can also be considered.
The most important aspect of this project is the technical issues that concern the project. In this case the investor should consider the type and quality of machines to be used for the project. The writer has carried out thorough research, consultations and collaborations with good dealers of the machines for the project.
Interested investors will be able to procure the set of the machines from the writer at the sum of N6 million. The machine will be made up of full set of the cube-sugar producing line and associated packaging system. This cost will include the installations and training of your manpower.
The machines are available for inspection on contacting the writer. The machines maintained all the NAFDAC compliance requirements, and the writer will assist in accomplishing all the laboratory test and analysis.
Capacity of the Plant
The proposed plant will be able to produce 50 cartons of cube sugar in every double shift. This implies that the plant will be able to produce average of between 225,000 and 250,000 cubes in a day. Details will be given to prospective investors.
Brands of Products
Different products can be produced by prospective investors depending on the target markets. You can produce chocolate & orange flavour cubes. You can also produce low-diet cube sugar for those that are diabetic. Prospective investors will be educated more on this.
Raw Material Requirement
The major raw materials required for this project are locally available, so you do not bother about importation or running into shortage of supply. The raw materials are sugar cane for production of granulated sugar which can easily be obtained from granulated sugar making companies all over the country. Details will be given to prospective investors.
The production processes are very simple and includes, harvesting, cutting, extraction, boiling, mixing, heating, conveying, drying and packaging through a mechanized system which is very easy to operate.
The project can comfortably be run by just five to ten people. The writer will assist in recruiting highly experienced personnel to manage the project.
Those to Invest
This project can be embarked upon by anybody in the society; however the politicians, workers in the offices who want to make extra incomes, retirees and those planning for their retirement, and every member of the society, who may wish to develop his community to generate more employment for the unemployed.
From investment analysis, the payback period is about one year, all things being equal. The Return on investment is about 68 per cent. The Cost-Benefit Ratio analysis is very impressive. Details will be given to prospective investors.
Prospective investors should contact the writer for detailed/comprehensive bankable feasibility studies reports & Business plan, sourcing of the required funds, procurement & installation of strong, tested and very functional machines (machines are available for inspections), guidance on NAFDAC requirements, recruitment and training of experienced manpower.
* Godwin wrote from Lagos
By Uba Godwin