Investing in Toothpicks and Packaging Plants
Uba Godwin proffers entrepreneurial tips on the establishment of toothpicks and packaging plants
The market is sustainable and above all the relevant raw material inputs are 100per cent locally available and handy
First and foremost let me say Happy and prosperous New Year to all our readers. I wish everybody success in all life endeavors this year 2016.
As the Federal government had earlier said, this year is going to be a year of perseverance. It is a year that much should not be expected from the government, since efforts will be channeled towards re-directing the policies of the government towards diversifying the economy from high level of consumption to high level of internal production, it will be a year to look at possibilities structuring the economy the good relying wholly on revenue from Crude oil to other non-oil sectors like Agriculture, solid minerals etc.
It will be a year that attention will be channeled to manufacturing within the country instead of massive importation of goods and services from oversea countries. It will be a year that efforts will channeled to reduce massive demand for foreign exchange to import goods and services that can easily be manufactured and packaged here in Nigeria.
It is a year that emphasis will be placed on increasing our local productivity, and of course you can easily get foreign exchange to import plants and machineries to set up manufacturing plants in Nigeria, buy your raw materials for production outside the country.
It will be a year that government will support your Agricultural products processing and export of well processed and packaged Agricultural products.
It will be a year that government will work towards reducing to the barest minimum the importation of petroleum products by repairing the refineries and even establish more refinery plants. This will take away or reduce the demand for foreign exchange for importation of fuel and other petroleum products. This will also lead to settlement of the issue of fuel subsidies.
It will be a year that you have to make good use of little resources at your disposal. Invest wisely and ensure that adequate returns are generated.
Through this medium, we will continue to advice on good investment you can make in Nigeria with great prospects of succeeding and keying into Federal Government diversification processes and agenda.
This week we are going to take a very viable project you can invest into.
The greatest empowerment the government should make to the people of Nigeria is to ensure regular power supply in the country. Majority of small and medium scale industries have closed shops due to lack of power. Our experience as Industrial, Financial and Agro-Project Consultants is that due to lack of power, the cost of doing businesses becomes very high that our locally manufactured products can no longer be competitive in terms of price with goods manufactured in other developed countries. That is why many Nigerians go into importation of foreign goods.
Though the Federal Government has succeeded in Privatizing part of the PHCN We are still expecting positive results. With the appointment of Mr. Babatunde Raji Fashola as the Minister of Works & Housing and Power there is high hopes that he will transform the sector and regularize the supply of Power supply in Nigeria.
However, one of the most recommended ways to create employment and empowerment of people is through development of the real sector. Setting up of manufacturing industries (small, medium and large scale) and Agro-allied industrial projects is one of the most effective ways of generating employment. When manufacturing industries are set up (whether small, medium or large scale) the effect on empowerment is always tremendous. Apart from direct employment there are so many indirect employment opportunities.
It is also good to consider the establishment of industrial projects with total local content. The highly recommended project is the one with all the raw materials locally available. Toothpicks production has all the raw materi- als available locally. Also the technology is locally available.
However, the Federal Government should have given total ban on importation of such products like toothpicks which can be produced locally.
When one wants to select the best small and medium scale project to invest into, two major important consideration to make apart from location and nearness to market are one; the projected daily turnover and acceptability of the products(s) in the market.
Experience has shown us that any product that is consumed by many and regular basis always assures profitable investment.
Market survey has shown that toothpick has very high demand and always record very high consumption rate and of course high turnover.
The market for toothpicks exists and also expanding. The market is sustainable and above all the relevant raw material inputs are 100% locally available and handy.
In a country in Nigeria where there is lack of employment, one can establish the project as family business to accommodate the unemployed in the family.
Let us look at some important issues that place the project as one to invest into. Market for the Products The daily uses of toothpicks in homes, hotels, and various institutions are well known virtually everybody uses toothpicks on daily basis to remove unwanted food leftovers that stick to the teeth. Toothpicks when well produced and packaged can be sold locally to satisfy the needs of the market or can be exported to earn foreign exchange because of its high export potential.
From our market survey, there are very few plants producing toothpicks in the country currently and the number is still and the number inadequate to produce for a growing population of about 160million people. Therefore more local producing plants are needed in the country.
The raw materials for making them are either wood or bamboo light round plastic containers, to which the company’s logo printed on paper can be glued or preprinted small light paper cartons are used to package the finished product.
The whole of these inputs are sourced locally which is one big advantage this project has assurance of regular supply of the raw materials, steady production and profitability. Machinery & Equipment The machines and equipment heeded for the project are locally available. They include round crosscutting machine, slicing machine, slitting machine, stick making machine, skewer sizing machine, polishing, packaging/arranging machine and dust collector.
We have complete set of these machines for sale. The machines will be to a prospective investor(s) within seven (7) weeks of commissioning. It will be supplied with warranty. It will be installed, test run recruit and train your manpower as well. A complete set of the machines will go for N3.5 million exchanges the cost of installation. Funding The project can be financed by Cooperative Societies, Local Government Councils or State Governments, Individuals and Corporate organizations Banks such as Bank of Industries (BOI) can also fund the project. This is an export oriented value added project that has a short payback period and therefore should attract ready financing. Implementation To implement this project, a minimum of 12 people are required to ensure a smooth take-off. The promoter is advised to ensure that it is sited where bamboo or wood can easily be obtained at least cost. This will help reduce the cost of transporting the raw materials. He should put up the needed building, prepare a comprehensive feasibility report to act not only as a guide for him to implement and monitor the project but also as a handy requirement to facilitate fund attraction from co-promoters or finance organizations, in-stall the plant and machinery and buy the start-off raw materials. The importance of good quality products and management and of keeping proper and timely records of the projects operations cannot be over emphasized.
Estimates of the Project Cost
Pre-investment 500,000
Factory house and offices 5,000,000
Plant and machinery 4,500,000
Utilities (including generator) 1,500,000
Working capital 6,000,000
Contingency 5,000,000
Total 22,500,000
To handle the implementation of this project professionally, prospective investors should embark upon a detailed and bankable feasibility studies. The writer is readily available for the feasibility studies and packaging of a bankable feasibility studies reports/ business plans.
After which the construction of the factory will take place followed by procurement and installations of all the required machinery and other basic assets.
The writer will guide prospective investors professionally to ensure that good packaging, quality products and efficient/ effective management is installed for profits. The writer will also assist in the sourcing of the required funds (where necessary) and obtaining NAFDAC approval. For further enquiries, please contact the writer.