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feasibility study for feed mill

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Importance of Feasibility Report

Before starting any business including Micro Scale Agro Processing Industry Feed Mill is it very important to do a feasibility study/report. A feasibility study is used to determine the viability of an idea. The objective of such a study is to ensure a project is legally and technically feasible and economically justifiable. It tells us whether a project is worth the investment.

A feasibility study evaluates the project’s potential for success; therefore, perceived objectivity is an important factor in the credibility of the study for potential investors and lending institutions. [Source: Wikipedia]

Introduction

Micro Scale Agro Processing Industry Feed Mill is a small-scale business idea that focuses on processing animal feed to meet the growing demand for animal protein in Nigeria. The demand for animal feed is expected to rise as the population continues to grow, and the consumption of meat, eggs, and dairy products increases. This feasibility report aims to evaluate the viability of setting up a Micro Scale Agro Processing Industry Feed Mill in Nigeria.

Market Analysis

The demand for animal feed in Nigeria is high due to the large population and increasing demand for animal protein. The demand for animal feed is expected to increase as the population grows, and the consumption of meat, eggs, and dairy products increases. 80% of individual homes in Nigeria consume chicken and eggs on daily basis. Other major buyers are meat markets, cold rooms, supermarkets, hotels, restaurants. In Nigeria, the market for animal feed is dominated by imported feeds. This presents an opportunity for a Micro Scale Agro Processing Industry Feed Mill to produce locally made animal feed at an affordable price.

Technical Analysis

To set up a Micro Scale Agro Processing Industry Feed Mill, the following equipment would be required:

  1. Hammer Mill
  2. Mixer
  3. Pelletizing Machine
  4. Weighing Scale
  5. Bag Sewing Machine

The above equipment can be sourced locally, and the total cost of acquiring them is estimated to be around N3,500,000. The cost of setting up the feed mill facility is expected to be around N2,500,000.

Financial Analysis

The financial projections for the Micro Scale Agro Processing Industry Feed Mill are as follows:

  1. Total Capital Investment: N6,000,000
  2. Annual Turnover: N12,000,000
  3. Gross Profit Margin: 30%
  4. Annual Gross Profit: N3,600,000
  5. Net Profit Margin: 20%
  6. Annual Net Profit: N2,400,000

Based on the above financial projections, the Micro Scale Agro Processing Industry Feed Mill is expected to break even in the second year of operation.

Marketing and Sales Strategy

The Micro Scale Agro Processing Industry Feed Mill can market its products to small-scale livestock farmers, large-scale livestock farmers, and livestock feed distributors. The business can leverage social media platforms, agricultural fairs and exhibitions, and targeted email marketing to reach its target customers. The business can also offer discounts for bulk purchases and create a loyalty program to retain customers.

Conclusion

Based on the market analysis, technical analysis, financial analysis, and marketing strategy, it is feasible to set up a Micro Scale Agro Processing Industry Feed Mill in Nigeria. The business has the potential to generate revenue and create employment opportunities. However, the success of the business will depend on the effectiveness of its marketing and sales strategy, and its ability to produce high-quality animal feed at an affordable price.