Monday, 27 October 2014

Two businesses worth undertaking


Two businesses worth undertaking

There are two businesses worth taking a shot at owing to their high return on investment (RoI) and short payback period. The businesses have bright prospects as long as the prospective entrepreneur can look beyond profitability now and focus more on market penetration and potentials, process description and raw materials sourcing, among others, experts say.
Experts at the Federal Institute of Industrial Research Oshodi (FIIRO) have compiled a list of 50 tehno-investment opportunities for the micro-, small- and medium-scale enterprises (MSMEs). Start-Up Digest has picked out two of such businesses with highest RoI and not-too-long payback period.
One of such businesses is soy-ogi production. Soy-Ogi is a fermented maize breakfast cereal, which is low in protein. It is the traditional Ogi, fortified with soybeans to improve the protein content.  Experts identify the raw materials requirements as soybeans, maize and vitamin premix. These are all locally available.
“The demand for Soy-Ogi is high in Nigeria,” says FIIRO, headed by Gloria Elemo.
“Target buyers are adults of all age categories living in Nigeria, ECOWAS sub-region and Nigeria in Diaspora with focus on all levels of income,” says FIIRO.
According to the experts, the process of preparation involves corn Ogi wet cake and soybeans cake. The processes involved in corn Ogi wet cake preparation are weighing and cleaning. steeping and milling, sieving, fermenting, sedimenting, dewatering and granulating.
Similarly, soybeans cake preparation involves weighing and cleaning, roasting and de-hulling, cooking and milling as well as dewatering and granulating. Machinery and equipment that should be acquired for the production of this are flash dryer, steeping tank, grains destoner, sedimentation tank and milk pump. Others are disc mill, roaster, hydraulic press, cake granulator, pressure cooker, centrifugal sieve, mixer, powder filling and sealing machine.
RoI on this investment is 74.6 percent, while return on equity is 189.9 percent. Payback period for this business is 1.9 years, while the break-even point is 34.3 percent.
Estimated cost of machinery and equipment depends on the capacity, which could vary from 500kg to 2.5 million tons per day.
Secondly, entrepreneurs can also move into solid minerals processing, which has 93.5 percent RoI, 165.6 percent RoE, 1.1 years payback period and 33.3 percent break-even point.
Experts say solid minerals business is now a gold mine as the country is aggressively looking away from crude oil to diversify into other productive areas. The sector presents bigger opportunities as it is still largely unexploited , according to the Nigerian Investment Promotion Council (NIPC).
One of such solid minerals which should be of interest to entrepreneurs is the precipitated calcium carbonate, which applies to the commercial types of calcium carbonate produced by precipitation process.  The raw materials used here are limestone and carbon dioxide.
“There is high demand for precipitated calcium carbonate In Nigeria. The demand is largely found in the paper, food, paint, pharmaceutical and plastics industries,” says FIIRO.
Processes involved include crushing, calcinations, hydration, Co2 collection and purification, carbonation, screening, drying, milling and packaging.
Machinery and equipment involved are vertical shaft kiln, hydrator (stainless steel), carbonator, electromagnetic separator, rotary dryer, pulverizer, heat exchanger, scrubber and weighing scale.
The estimated cost of the machinery and equipment depends on the capacity, which could vary from two to five tons per day, says FIIRO.     
Gloria  Elemo, director-general/CEO, FIIRO said,  “In an effort to make research results relevant to human needs, FIIRO has engaged in the promotion of its research results and transfer of same to the investing public,” she said, the FIIRO Investment Day and Technology Week held on Wednesday in Lagos.
According to Elemo, Nigeria can no longer continue to depend on the external sector but must place emphasis on the MSMEs to harness the country’s sizeable domestic market  and abundant resources to ensure steady supply of vital products to the economy.
G.U Ugochukwu

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