Professional Documents
Culture Documents
July 2017
This publication is prepared by Yinka Ogunseyinde & Co. and produced for review by the USAID-NEXTT Project. This is an
assignment commissioned by Carana Corporation under the USAID-NEXTT Project.
USAID-NEXTT PROJECT
PROCESSING JATROPHA FRUITS TO BIODIESEL
Feasibility Report / Business Plan
Disclaimer
The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International
Development and the Nigeria Expanded Trade and Transport or Carana Corporation.
This project is to present a business case for sustainable and profitable Biodiesel production in Nigeria: Exploiting the
synergies that exist between the nation’s agricultural resources and its energy needs.
The project aims to promote investment and trade in the Jathropha Curcas value chain in Nigeria.
In an effort to achieve this, studies have been carried out to highlight the investment opportunities available for both domestic and
international investors in the Agronomy and the Agribusiness sector of the value chain.
The information used in the preparation of this report was gathered from various reliable sources that include the statistics obtained
from Nigerian Energy Regulatory Commission, Nigerian National Petroleum Corporation and the National Bureau of Statistics in
Nigeria. Statistical data from Bio fuel Magazines and International industry averages have also been used as basis for the preparation
of the financial projections to this report.
This report provides a financial and economic analysis of the opportunities available in the sector and identifies the potential
technical strengths and challenges that may be encountered by the investor(s) in undertaking the identified project. The report
however, helps the reader to develop an understanding of the operational aspects (equipment, human resource, infrastructure, etc.)
in the sector and its growth potential in the country.
ABSTRACT 4
ACRONYMS 5
2.1 Introduction
APPENDIXES 112-116
EXECUTIVE SUMMARY
This summary should be read in conjunction with the full text of the feasibility report and business plan from which it was
derived.
PROJECT OVERVIEW
Proposed Business Legal Status
The legal status of business tends to play an important role in any setup; the proposed Jatropha Curcas Value Chain is assumed to
operate as a private limited company.
Project Summary
Jatropha Plant Cultivation for the Production of Biodiesel and Biomass.
Industry
Green Energy
Proposed Location
The Jatropha Curcas plant thrives in areas with abundant sunlight. Therefore, the plantation and the biodiesel production plant
designed for this process should be located in sunny regions.
a. The project is aims at promoting Jatropha Fruits Value Chain Development in Nigeria. The project involves plantation of 500
hectares of Jatropha fruits (Agronomy) that will guarantee constant feedstock (raw-material) for the production of Biodiesel.
b. The Biodiesel production capacity is based on 20 metric tonnes of Jatropha fruits per day. The production will commence in
the fifth year of the Jatropha plantation to guarantee steady feedstock (raw-material) for the production.
The financial projection for the Bio-refinery covers a 6-year period, starting from the fifth year of the Jatropha Curcas
plantation.
Human Resources:
Market Demand
a. Local Demand: There is not much local demand for refined bio-diesel in Nigeria. NNPC is supposed to be the single
off-taker to blend with fossil diesel. However, there are local demands by established companies to power their
generators. These are not in commercial quantities.
b. Global Demand: The developed countries have issued policies to regulate gradual conversion from total fossil diesel
to biodiesel. This has created a lot of demand for biodiesel globally.
Most countries particularly USA and European countries have constraints in the production of feedstock for their
refineries. They have all shifted focus to Africa where there is abundant uncultivated land. The introduction of
Jatropha Curcas has also ease out the Food vs Energy debate.
This is based on the capacity of the proposed Machines & Equipment is shown below;
Financials
TOTAL 250,000
N'000
Equity Contribution 50,000
Loan 200,000
250,000
The Loan of N200million is repayable over a period of 5 years beginning from year 2.
N'000
Equity Contribution 100,000
Loan 200,000
300,000
The loan is projected to be repaid in 5 years with an interest rate of 9% per annum.
The Business Plan is prepared to highlight the activity required for the project implementation and schedule of the activities to the
commissioning of the project.
The planning and execution of the activities is assumed to take a period of 24 months (Two year). The period is classified as year zero
ACTIVITIES MONTHS
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Organising a formidable Board
1 of Directors
4 Building Constructions
Engineering Procurement
5 Contract
10 Plant Commissioning
Biodiesel development in Nigeria over the years has been given little attention because of the myriads of economic strain and stress
facing the country like any other third world country. Biodiesel is a renewable source of energy that has not been fully tapped.
Biodiesel can facilitate clean air, readily usable in existing engines and transport facilities, capable of generating employment and
income for citizens and country at large. The major biomass worldwide is Jathropha plant, which is currently generating interest in
every economy of the world including Nigeria.
Jathropha curcas Linnaeus is a shrub tree that grows in all part of Nigeria with little or no maintenance. Jathropha curcas L is the only
plant which pairs a high yield of extractable oil from its seed to a relative low price for the raw oil. Jatropha plant has longevity of
40-50 years, and it does not require a fertile land to germinate.
JATROPHA curcas L. is a multipurpose species with many attributes and considerable potential. The plant is traditionally used for
medicinal purposes, but is also useful for the prevention and control of soil erosion, as living fence, and also a source of oil that can
be converted into biodiesel. The plant is widely seen to have potential to help combat the greenhouse effect, create additional
income for the rural poor, and provide a major source of renewable energy both locally and internationally. The oil from its seeds is
the most valuable product since it can be converted into biodiesel.
Biodiesel has become more attractive as an alternative to fossil diesel because of its environmental benefits and the fact that it is
made from renewable resources.
Jathropha. curcas L. is a promising source of biodiesel since its seeds contain high amount of oil and the species has good agronomic
traits. These properties of Jathropha curcas L. have attracted a lot of projects developers. At present, many countries including Nigeria
have started cultivating Jatropha trees on large scale..
This biotechnological approach is environmentally friendly since the unrecovered enzyme can degrade naturally in the environment
and also because of the mild conditions under which it is operated. But the cost of enzyme remains a barrier for its industrial
implementation and many efforts are being carried out to improve the cost effectiveness of the process. The fuel properties of
Jathropha biodiesel are comparable to those of fossil diesel and conform to the American and European standards.
A diesel engine can perform satisfactorily on biodiesel blends without any major engine hardware modifications.
The project intrinsically links the Agricultural Sector to the Oil & Gas industry and will exploit its multiplier effect to drive
economic growth of the Nation.
The basic raw material for the Bio-Diesel industry is feedstock from various vegetable oils and animal fats, which are readily
available in Nigeria. This study however is based on the use of Jathropha Curcas plant for the project. Studies confirmed that
the Nation’s Agricultural sector has the capacity to energise mass production of this basic raw material.
The plantation will be located in North Western part of Nigeria. This is because communities in that area have climatic
conditions that have optimal biophysical environment for Jathropha Curcas. L
Farmers in these areas are already actively involved in the production of similar vegetable oils. The Investor will only need to
enhance their capacity and organise these growers into cooperative social model
The project is conceived as environmentally sustainable and will provide a substantial income to thousands of
farmers/workers.
Demand for Carbon Emission Reduction Credit (CERs) will be earned under the Clean Development Mechanism (CDM).
2. Can be intercropped with high value crops such as sugarcane, coconut palm, various fruits and vegetables, providing
protection from grazing livestock and phyto-protection action against pests and pathogens
Multi-Purpose Plant
3. Non-edible and therefore does not compete with food supply when used for biodiesel production
2. Toxicity is based on several components that make complete detoxification a complicated and difficult process.
Food vs Energy debate in the developed world is widely misleading and potentially dangerous for developing countries and
completely unnecessary. The developed world is limited in terms of land available for cultivation so the issue of what to grow on the
land is a subject of debate.
In Africa, and Nigeria in particular, we need both food and energy from agriculture to prosper economically, to improve local
nutrition and health, and to successfully reduce and finally eliminate poverty.
In Nigeria Jathropha projects tend to contribute to securing food supply by rehabilitating unused, often degraded, land, combined
with Intercropping with food crops where suitable.
It facilitates transfer of knowhow on good agricultural practices, and access to markets for small farm holders.
A Bio-based economy is a new concept for the Nigerian Agro industry that can form the basis for an unprecedented economic boom
and lasting prosperity.
It is still uncertain where the centre of origin is, but it is believed to be Mexico and Central America. It has been introduced to Africa
and Asia and is now cultivated worldwide. This highly drought-resistant species is adapted to arid and semi-arid conditions. The
current distribution shows that introduction has been most successful in the drier regions of the tropics with annual rainfall of 300-
1000 mm. It occurs mainly at lower altitudes (0-500 m) in areas with average annual temperatures well above 20°C but can grow at
higher altitudes and tolerates slight frost.
It grows on well-drained soils with good aeration and is well adapted to marginal soils with low nutrient content.
It is a small tree or shrub with smooth grey bark, which exudes whitish colored, watery, latex when cut. Normally, it grows between
three and five meters in height, but can attain a height of up to eight or ten meters under favourable conditions.
Leaves
It has large green to pale-green leaves, alternate to sub-opposite, three-to five-lobed with a spiral phyllotaxis.
Flowers
The petiole length ranges between 6-23 mm. The inflorescence is formed in the leaf axil. Flowers are formed terminally, individually,
with female flowers usually slightly larger and occur in the hot seasons. In conditions where continuous growth occurs, an unbalance
of pistillate or staminate flower production results in a higher number of female flowers.
Fruits are produced in harmattan when the shrub is leafless, or it may produce several crops during the year if soil moisture is good
and temperatures are sufficiently high. Each inflorescence yields a bunch of approximately 10 or more ovoid fruits. A three, bi-valved
cocci is formed after the seeds mature and the fleshy exocarp dries.
Seeds
The seeds become mature when the capsule changes from green to yellow, after two to four months
The trees are deciduous, shedding the leaves in the dry season. Flowering occurs during the wet season and two flowering peaks are
often seen.
In permanently humid regions, flowering occurs throughout the year. The seeds mature about three months after flowering. Early
growth is fast and with good rainfall conditions nursery plants may bear fruits after the first rainy season, direct sown plants after the
second rainy season. The flowers are pollinated by insects especially honey bees.
Ecological Requirements
Jathropha curcas grows almost anywhere, even on gravelly, sandy and saline soils. It can thrive on the poorest stony soil. It can grow
even in the crevices of rocks. The leaves shed during the winter months around the base of the plant. The organic matter from shed
leaves enhances earthworm activity in the soil around the root-zone of the plants, which improves the fertility of the soil. Regarding
climate, Jathropha curcas is found in the tropics and subtropics and likes heat, although it does well even in lower temperatures and
can withstand a light frost. Its water requirement is extremely low and it can stand long periods of drought by shedding most of its
leaves to reduce transpiration loss. Jathropha is also suitable for preventing soil erosion and shifting of sand dunes.
Altitude: 0-500 m, Mean annual temperature: 20-28oC, Mean annual rainfall: 300-1000 mm or more.
Soil type: Grows on well-drained soils with good aeration and is well adapted to marginal soils with low nutrient content. On heavy
soils, root formation is reduced. Jathropha is a highly adaptable species, but its strength as a crop comes from its ability to grow on
very poor and dry sites.
The cultivation technology to be used for the project will include all modern agricultural practices being undertaken universally.
There will also be collaboration and cooperation with international agricultural organisations for an improved crop yield through
effective management practices.
The key factors that can influence the oil yield of Jathropha Curcas are:
Climate
Quality of the soil
Irrigation
Weeding
Use of fertilizer
Crop density
Genotype
Crop Yield
Jathropha curcas plant can withstand severe heat and does well in very warm areas. It can also withstand light frost but not for
prolonged periods. The older tree have the capacity to withstand frost more than the younger ones but black frost will almost
certainly kill young plants and severely damage older plants.
Jathropha Curcas thrives best in sandy well-drained soils and grows. Using organic fertilizer has been proven to enhance its
yield.
Irrigation
The plant handles dryness very well and it is possible to live almost entirely off humidity in the air. 500 - 600 mm of rainfall is the
limit. Below it the production depends on the local water condition in the ground. It will also stand for long periods without
water - up to 2 years – and grows again when rains occur again.
Weeding
Standard cultural practices are timely weeding (4 times a year), proper fertilization, surface ploughing and pruning. With these
management practices a yield around 15-20 kg of fruit per tree can be obtained even if the plants did not reach full maturity.
Use of fertilizer
Although Jathropha is adapted to low fertility sites and alkaline soils, better yields seem to be obtained on poor quality soils if
fertilizers containing small amounts of calcium, magnesium, and Sulphur are used.
The recommended spacing for hedge rows or soil conservation is 15cm - 25cm x 15cm-25cm in one or two rows respectively
and 2m x 1.5m to 3m x 3mm for plantations. Thus there will be between 4,000 to 6,700 plants per km for a single hedgerow and
double that when two rows are planted.
Satisfactory planting widths are 2m x 2 m, 2.5m x 2.5 m, and 3 x 3 m. This is equivalent to crop densities of 2500, 1600 and 1111
plants/ha, respectively. This study is recommending planting width of 3mX3m.
This planting width will allow a good intercropping with a maximum economic yield.
Pruning
The plants need to produce side shoots for maximum sprouting and maximum flowers and seed. First pruning is done between
90 and 120 days at 25 cm to produce eight (8) to twelve branches. In order to facilitate harvesting, it is suggested to keep the
tree less than 2 meters.
Germplasm Management
Seeds are oily and do not store for long. Seeds older than 15 months show viability below 50%. High levels of viability and low
levels of germination shortly after harvest indicate innate (primary) dormancy. Seed production ranges from about 2 tons per
hectare per year to over 12.5t/ha/year, after five years of growth.
Crop Yield
Yield is a function of water, nutrients, heat, the age of the plant and other factors relating to good management. Many different
methods of establishment, farming and harvesting are possible. The focus will be on the right mix of Cost, Quality and yield per
Metric tonne.
After collection, the fruits are transported in open bags to the processing site where they are dried until all the fruits have
opened. It has been reported that direct sun has a negative effect on seed viability and that seeds should be dried in a shade.
When the seeds are dry they are separated from the fruits and cleaned.
The seeds are orthodox and should be dried to low moisture content (5-7%) and stored in airtight containers. At room
temperature the seeds can retain high viability for at least one year. However, because of the high oil content, the seeds are not
expected to store for as long as most orthodox species.
Freshly harvested seeds show dormancy and after-ripening is necessary before the seeds can germinate. Dry seed will normally
germinate readily without pre-treatment. Although it speeds up germination, it is not recommended to remove the seed coat
before sowing, as there is a risk of getting abnormal seedlings.
Depending on topography, soil profile and prevailing agro climatic conditions in an area, Jathropha can be combined with other
suitable species including the agricultural, horticultural, herbs, pastoral and/or silvicultural components to result in an ecologically
viable, economically profitable and socially acceptable agro forestry system. THIS IS KNOWN AS INTERCROPPING.
By adopting Jathropha based intercropping systems, the Investor will improve the socioeconomic conditions in rural areas by
enhancing their economic buying power. It will also improve the profitability of the Plantation on the short run.
The Risk categorisation chart associated with this farm project, the degree of impact and possible Mitigant is shown in the table
below:
Operational Risk This is the risk of loss from inadequate or HIGH Adoption of a cultivation technology
failed internal processes, systems or from that assures maximum input with a
external events such as weather condition corresponding maximum yield.
Political & Legal Violations, citations and fines stemming from HIGH The Investor will ensure that terms and
Risk non-compliance with regulatory and industry conditions of contracts, legal rules and
guidelines laws (or changes in law), changes regulations covering the business are
in government, settlements/losses, properly understood and adhered to.
Counterparty’s unwillingness to meet its Proper legal counsel will be sought
contractual obligations, before going into any contractual
agreement
Business risk Major failures in products and business HIGH Appointment of experts in relevant
strategies areas.
Liquidity Risk Unplanned funding requirement MEDIUM A strict budget compliance as part of
Fraud Risk Internal exposure associated with clear intent LOW operate a lean organisation to
by employees to defraud the organisation for minimise such occurrences
personal gain, as well as external exposure
associated with corporate espionage, money
laundering, theft, collusion, unauthorised
transactions etc
Customer Risk Risk of loss from failure to understand a LOW Proper due diligence will be conducted
customer’s risk profile including failure to before signing up with local or/and
perform an adequate Know Your Customer, overseas customers.
review of anti-money laundering and
monitoring customer bankruptcy actions.
KEY:
High Impact: An occurrence of this risk will have a significant impact on the project and may lead to non-attainment of project
objectives
Medium Impact: A manifestation of this risk will not adversely affect the project
Low Impact: This risk will have little or no impact on the project
Management
The management of the agronomy sector of the Company will consist of the Board of Directors and the operational management
team.
Board of Directors
The Board will be responsible for setting a strategic direction for the agronomy and formulating and approving its corporate policies.
It is recommended to have at least five directors.
On full commencement of operations, the agronomy will consist of 42 employees organised as follows:
Plantation Manager 1
Store Manager 1
Farm Equipment Operators 6
Technical Officers (Agric Engineers) 2
Supervisors (Agric Mechanisation) 4
Mechanics/Fitters/Other Artisans Staff 6
Finance Manager 1
Account Clerks 2
Internal Auditor 1
Audit Clerks 2
Administrative Manager 1
Secretary 1
Office Assistants 2
Security Men 8
Drivers 4
42
Environmental concern about global warming and local pollution is the primary impetus for many clean, sustainable and renewable
energy technological developments in the 21st century. Global warming is the phenomenon of rising average temperatures observed
worldwide in recent years. This warming trend is generally attributed to increased emission of certain gases, known as greenhouse
gases, which include carbon dioxide; methane; nitrous oxide; water vapour; ozone and several classes of halocarbons (compounds
containing carbon in combination with fluorine, bromine, and /or chlorine). Greenhouse gases are so called because their presence in
the atmosphere does not block sunlight from the earth’s surface, but does slow the escape of heat from the earth. As a result, heat
becomes trapped as in a conventional greenhouse, and temperature becomes trapped. This is called the Green House Effect.
Global warming has the potential to cause massive ecological and human devastation. In the past, drastic, rapid climate change has
resulted in extinction for large numbers of animals and plant species. Sea levels will rise as ice caps melt inundating low-lying areas
around the world. While average temperatures will rise, extreme weather events, including winter storms and extreme cold, are
expected to increase in frequency; some areas will experience more flooding, while other areas will suffer drought and desertification,
straining the remaining agricultural land. Changing climate may permit tropical diseases such as malaria to invade temperate zones,
including Europe and North America.
There is a strong consensus among the scientists who study climate that the global warming now observed is caused by human
activities especially the combustion of fossil fuels. When oil, gas, or coal is burned to propel mechanical engines, generate electricity,
or provide heat, the products of combustion include carbon dioxide, methane and nitrous oxide. Thus, our conventional energy
systems are in large measure responsible for the impending environmental problem (IPCC, 2001)
A solution to greenhouse effect called the Clean Development Mechanism (CDM) has been introduced. CDM is one of the Kyoto
mechanisms aimed at promoting sustainable development in developing countries as well as to help Annex I Parties (mostly
industrialized countries) achieve compliance with their Carbon Emission Reduction (CER). It allows them to invest in emission-saving
The CERs will be added to Annex I Parties' assigned amounts. Growing plants, which are later processed into fuel, recycles the Carbon
dioxide released into the atmosphere when biofuel is burned. Thus, the CO2 emission of Jathropha oil can be assumed almost zero.
For this reason, a project that aims to exploit the potential of Jathropha Curcas as energy crop owns all requisites to be
eligible within the CDM
There are new and high potential opportunities to generate carbon finance in the Biodiesel sector.
The use of petrol-diesel in engines creates a significant amount of greenhouse gas emissions that can be greatly reduced by
substituting a blend of Biodiesel and petrol-diesel or using 100 percent Biodiesel. Greenhouse gas emissions can be reduced in a
number of ways through the Biodiesel production process including:
Carbon sequestration in the plantations of trees whose seeds are used for Biodiesel production
Regarding Clean Development Mechanism projects, there is a great potential in the use of Jathropha curcas. Biodiesel yields 3.2 units
of fuel product energy for every unit of fossil fuel consumed while petroleum diesel yields 0.83 units.
Including revenue from carbon credits from petrol-diesel substitution and possibly carbon sequestration and nitrogen based fertilizer
substitution; Biodiesel projects become considerably financially attractive.
Nigeria ratified the Kyoto protocol in 2004 and adopted along with it, the three Kyoto Mechanisms:
The Nigeria Designated National Authority (DNA) is within the structure of the Federal Ministry of Environment
Before a letter of approval is issued to qualify for CDM, the project must satisfy the following conditions
o Bring about environmental and financial benefits – Environmental Impact Assesment becomes imperative;
o Result in real measurable and long- term benefits related to the mitigation of climate change.
Funding: access to financing, subsidies and grants will minimise initial capital outlay by potential investors and facilitate project
execution
Land Approval process: development costs are minimised when approvals are possible and easily obtained. Local, State or
National legislation and policy may not be sensitive to the differences between conventional and clean energy technologies and
as such may unfairly disadvantage clean energy projects of this nature
Appropriate cultivation and processing methods. This will enhance the quality of oil obtained from the nuts.
Off-take Agreements: This will guarantee a ready market for the Company’s product. The Investor should aggressively pursue
this and include it as part of its marketing strategy. This would also ensure that the crop is not in storage for too long.
Constant availability of feedstock: Steady and stable availability of the raw material will make the project viable. This is why it is
necessary to have an Out Growers’ Scheme to control the quality and quantity of feed stock.
Government Support: This is available in principle with the inauguration of National Bio Fuel Policy.
Nigeria Bio- Fuel Policy came into being in August 2005. It gave directives for the development of an “Automotive Biomass
Programme” in Nigeria. NNPC (Nigerian National Petroleum Corporation) was given the mandate to create an environment for the
The Nigerian Bio-Fuel policy objective aims to gradually reduce the nation’s dependent on imported gasoline, reduce environmental
pollution, and while at the same time create a commercial viable industry that will promote economically viable investment programs
and build up more efficient and competitive business that can precipitate domestic sustainable development.
The Biodiesel programme constitutes a major and unique attempt to integrate the agricultural sector of the economy with
the downstream sector of the petroleum sector.
The use of Biodiesel in Nigeria is anticipated to make significant impact on petroleum products quality enhancement in view of the
current limitations of the fossil-based fuels that have not kept pace with the increasing demand for environmentally friendly fuel.
th
The official gazette of Nigerian Bio-Fuel Policy and Incentives was signed at Abuja on 24 July, 2007.
1. Creating Market Demand for Bio-fuels by approving the blending of bio-fuels as a component of fossil-based fuels in the
country as required for all automotive use. This blend shall involve the process of upgrading fossil-based fuels.
2. Market Entry shall be through registration of bio-fuel manufacturing plants by the DPR.
3. Policy will support the emergence of an industry in which substantial portion of feedstock used by bio-fuel plants will be
produced by large-scale producers and outgrowers.
The draft-amended policy proposes very mouth-watering incentives for investors willing to go into biofuel business in Nigeria.
The policy was being fine-tuned by the Nigerian National Petroleum Corporation (NNPC) and Petroleum Products Pricing and
Regulatory Agency (PPPRA). Both agencies are driving the document and have held consultations with stakeholders in the sector.
The setting up of an appropriate funding arrangement of up to $100 billion for the establishment of a Biofuels Industry
Equity Fund by the federal government.
All registered businesses engaged in activities related to biofuels production or the production of agricultural feedstock
for the purpose of biofuels production and co-generation within the country shall be accorded pioneer status within the
provisions of the Industrial Development (income tax relief) Act.
Biofuel companies shall be exempted from taxation, withholding tax and capital gains tax imposed under sections 78, 79,
80 and 81 of the Companies Income Tax Act in respect of interest on foreign loans, dividends, and services rendered from
outside Nigeria to biofuels companies by foreigners.
Biofuel companies shall be exempted from the payment of customs duties, taxes and all other charges of a similar nature
like excise duties on biofuels for an initial 5 year period subject to renewal depending on prevailing circumstances.
A preferential loan arrangement will be made available to investors in the biofuels industry to aid the development of
large-scale out-grower’s schemes and large scale integrated operation including a feedstock plantation, a plant and
within-the-gate co-located power generating plants, cattle feedlots and fruit canning.
The Governor of Central Bank, Godwin Emefiele, said a vibrant domestic biofuel industry will provide alternative clean fuel for the
country, curtail the importation of fossil fuel products, and help to conserve foreign exchange.
He said that the Federal Government of Nigeria plans to set up a $50 billion biofuel industry equity fund to develop the domestic
biofuel sector, he spoke on Tuesday at a one-day capacity development workshop organized by the Petroleum Products Pricing
Regulatory Agency (PPPRA) in partnership with the Ministry of Petroleum Resources in Abuja.
Strategic Objectives
The following are strategic objectives and goals for setting up a biodiesel factory using Jatropha in Nigeria
To enhance the economic development of the Nigerian Oil and Gas Industry.
To promote gender equity and empower women through paid work and opportunities for entrepreneurship.
FINANCIALS
The project is aims at promoting Jatropha Fruits Value Chain Development in Nigeria. This aspect of projected financials is for the
plantation of 500 hectares of Jatropha fruits that will guarantee constant feedstock (raw-material) for the production of Biodiesel.
The projection is for a 10-year period. The Jatropha plant starts fruiting in the second year of planting and get to peak at 6 th year.
Jatropha tree has an average of 40 year’s lifespan of continuous fruiting.
The Jatropha fruits harvest for years 2 to 4 in the projection will be sold as fruits to fruit vendors; this is because the quantity to be
harvest would not be sufficient to meet the quantity required for commencing Biodiesel production.
5.1.1 Setup Costs for Establishment of 500 Hectares of Jatropha Curcas plantation
ASSETS N'000
N'000
Equity Contribution 50,000
Loan 200,000
250,000
The Loan of N200million is repayable over a period of 5 years beginning from year 2.
75,000
N' 000
Di Bush Clearing
Hiring Of Dozer Machine For N40,000/Day To Clear 4,000
5 Hectares/Day
Lining And Pegging (2 Labour Per Hectare @ N2,500 Per Labour) 2,500
e Nursery Preparation
N' 000
Seeds Acquisition/Seedlings Preparation
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Assets N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000
Lease On Land 25,000 22,500 20,000 17,500 15,000 12,500 10,000 7,500 5,000 2,500 -
Capital Equipment 75,000 60,000 45,000 30,000 15,000 - - - - - -
Construction Work 25,000 22,500 20,000 17,500 15,000 12,500 10,000 7,500 5,000 2,500 -
Operations (Amortised) 103,975 93,578 83,180 72,783 62,385 51,988 41,590 31,193 20,795 10,398 -
Preliminary Expenses 10,000 - - - - - - - - - -
238,975 198,578 168,180 137,783 107,385 76,988 61,590 46,193 30,795 15,398 -
Cash And Bank Balance 11,025 89,841 187,119 153,974 175,340 327,384 548,248 809,590 1,069,569 1,326,939 1,582,856
250,000 288,419 355,299 291,757 282,725 404,372 609,838 855,783 1,100,364 1,342,337 1,582,856
Financed By:
Equity Contribution 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000
Reserve 38,419 145,299 121,757 152,725 314,372 559,838 805,783 1,050,364 1,292,337 1,532,856
50,000 88,419 195,299 171,757 202,725 364,372 609,838 855,783 1,100,364 1,342,337 1,582,856
250,000 288,419 355,299 291,757 282,725 404,372 609,838 855,783 1,100,364 1,342,337 1,582,856
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000
Inflows
Equity Contribution 50,000
Bank Facility 200,000 -
Revenue From Jatropha Yield - 63,000 94,500 157,500 315,000 393,750 393,750 393,750 393,750 393,750
Net Inflow From Intercropping
(See Appendixes) 151,273 157,763 - - - - - - - -
Total Inflows 250,000 151,273 220,763 94,500 157,500 315,000 393,750 393,750 393,750 393,750 393,750
Outflows
Lease On Land 25,000 - - -
Capital Equipment 75,000 - - - - - - - - -
Construction Work 25,000 - - - - - - - - - -
Preliminary Expenses 10,000
Operations 103,975
Cost Of Harvesting And Bagging - 10,000 15,000 25,000 50,000 62,500 62,500 62,500 62,500 62,500
Admin. And Operating 50,418 51,446 53,705 54,794 57,716 58,997 62,118 63,482 66,090 67,544
Interest On Loan 18,000 18,000 14,400 10,800 7,200 3,600 - - - -
Loan Repayment - 40,000 40,000 40,000 40,000 40,000 - - - -
Contingency Expenditure 4,040 4,040 4,540 5,540 8,040 7,790 7,790 7,790 7,790 7,790
Total Outflows 238,975 72,457 123,486 127,644 136,134 162,956 172,886 132,408 133,772 136,380 137,833
Cashflow Surplus/(Deficit) 11,025 78,816 97,278 (33,144) 21,366 152,044 220,864 261,342 259,978 257,370 255,917
Opening Cash Balance - 11,025 89,841 187,119 153,974 175,340 327,384 548,248 809,590 1,069,569 1,326,939
Closing Cash Balance 11,025 89,841 187,119 153,974 175,340 327,384 548,248 809,590 1,069,569 1,326,939 1,582,856
Gross Profit/(Loss) 110,876 180,366 49,103 102,103 234,603 315,853 315,853 315,853 315,853 315,853
Less;
Admin. And Operating Expenses 50,418 51,446 53,705 54,794 57,716 58,997 62,118 63,482 66,090 67,544
Loan Interest 18,000 18,000 14,400 10,800 7,200 3,600 - - - -
Contingency Expenditure 4,040 4,040 4,540 5,540 8,040 7,790 7,790 7,790 7,790 7,790
Total Expenditure 72,457 73,486 72,644 71,134 72,956 70,386 69,908 71,272 73,880 75,333
Net Profit/(Loss) For the Year 38,419 106,880 (23,542) 30,969 161,647 245,466 245,945 244,581 241,973 240,519
Retained Profit/(Loss) B/Fwd - 38,419 145,299 121,757 152,725 314,372 559,838 805,783 1,050,364 1,292,337
Retained Profit/(Loss) C/Fwd 38,419 145,299 121,757 152,725 314,372 559,838 805,783 1,050,364 1,292,337 1,532,856
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Annual Total Yield (M'tons) 0 1,000 1,500 2,500 5,000 6,250 6,250 6,250 6,250 6,250
Cost Of Harvesting
Picking Of Fruits And Processing @
N10000/Mt 0 10,000 15,000 25,000 50,000 62,500 62,500 62,500 62,500 62,500
The price range of Jatropha fruits in international market are between $300 and $600 per Metric/ton. We have applied $200 for this
projection.
The price of the Jatropha fruits varies depending on the variety. The price changes from one variety to another.
Correspondingly the quality and quantity of the fruits/seeds also varies thus affecting its price.
Entrepreneurs all over the world face little difficulty with popularization of Jatropha as a budding source for biofuel. This is the main
reason for the price raise of Jatropha fruits.
Loan repayment is to commence in the second year of operation when the plant will start fruiting, with a yearly
repayment of N40million. Interest on loan is calculated at 9% per annum.
Loan Repayment Schedule
LOAN REPAYMENT BALANCE INTEREST
YEAR 9%
N'000 N'000 N'000 N'000
1 200,000 - 200,000 18,000
200,000 72,000
a. Lease on Land
Assumptions
For calculation of IRR and net present value of the project, cost of equity has been assumed at 0%. Whereas the cost of
Please note: Planting of maize crop as intercrop plant on the Jatropha plantation in the first two years of the plantation is
incorporated in the project. No intercrop plant was included from year 2 because Jatropha plant would have formed a canopy that
will prevent direct sunrays to reach the plant grown under. However, it is recommended that plants such as cowpeas and other
legumes that grow carpet-like would be introduced. The income is significant to the project in years 1 & 2.
AGRI BUSINESS (PRODUCTION OF BIODIESEL PROCESS, PLANT AND MACHINERY AND FACTORY LAYOUT)
Biodiesel Production
Biodiesel is Methyl ester derived from biomass (any oilseed) and animal fat which is produced by a chemical process called trans-
esterification and distillation of vegetable oils and animal fats.
(c) Trans-esterification;
(d)Distillation and;
(e) Storage
The major phenomenon used in the transformation or conversion of biomass into biofuel is known as trans-esterification. This is the
process of converting vegetable oil into biodiesel that involves taking a triglyceride molecule, or a complex fatty acid neutralizing the
free_ fatty acids, removing the glycerin, and creating an alcohol ester. Mixing the alcohol (usually methanol but not exclusively) into
the vegetable oil accomplish this. After the mixture has settled down, glycerin is left on the bottom and methyl esters, or diesel is left
on the top. This can then be filtered.
Vegetable oils when used as diesel fuel have the following limitations:
High viscosity
Poor atomization
Jatropha Value Chain > Feasibility Report/Business Plan 55
Poor volatility
Thermal cracking in diesel engines
Poor oxidation stability
Polymerization in combustion chamber leading to deposits
Injection fouling by deposits
Fuel line and filter clogging
Polymerization of triglycerides in lube oil
Hence, modification of vegetable oils is necessary for efficient and trouble-free engine operation. One method of modifying
vegetable oils to produce diesel is to transesterify it.
Processing of Oil
The quality of feed vegetable oil particularly FFA content plays an important role in identifying the suitable technology. The important
factors to be considered for a biodiesel production plant include:
The selection of appropriate technology for production of biodiesel calls for careful selection of processing steps, catalyst
and downstream process integration.
5 grams of lye (caustic soda; NaOH (> 95%) or KOH (> 85%));
The Process
Dissolve the lye into the methanol. Shake or swirl until all the lye has dissolved. This may take 10 minutes. It is normal that
temperature rises. This mixture is called sodium methoxide.
Now make sure the Jathropha Oil is in a vessel large enough (at least 150% of its volume), preferably with a valve at the bottom,
and heat it to about 60 °C, then stop heating.
Then add the methoxide mixture and make sure it is mixed well for at least 10 minutes. Leave the vessel and let the different
constituents separate by sedimentation
The glycerin will settle out at the bottom. After 8 to 24 hours the sedimentation is complete and the glycerin can be drained off.
What remains is raw biodiesel. If the reaction went well and the biodiesel is clear, it may be used straight, although its quality
may be inferior because of impurities. Water washing will remove most of these impurities.
Methods commonly used for producing biodiesel are batch and continuous processes.
In general, smaller capacity plants and variable feedstock quality warrant use of batch systems.
1. Oil temp.
2. Reaction temp.
3. Ratio of alcohol to oil
4. Catalyst type & conc.
5. Intensity of mixing
6. Purity of reactants
Almost all the biodiesel is produced using the base catalyzed transesterification process, as it is the most economical one requiring
only low temperatures & pressures with 98% yield.
Biodiesel: Physical Characteristics
Properties Values
Specific gravity 0.87 to 0.89
Kinematic viscosity@ 40°C 3.7 to 5.8
Cetane number 46 to 70
Higher heating value (Btu/lb) 16,928 - 17,996
Lower heating value (Btu/lb) 15,700 - 16,735
Sulphur wt % 0.00 - 0.0024
Cloud point °C -11 to 16
Pour point °C -15 to 13
Iodine number 60 - 135
The efficient storage of biodiesel resources can provide energy security to the country. Adequate data are not available for long-term
storage of biodiesel and blends. Based on the experience, biodiesel can be stored up to a max. 6 months.
As a mild solvent, biodiesel tends to dissolve sediments normally encountered in old diesel storage tanks. Brass, teflon, lead, tin,
copper, zinc etc. oxidize biodiesel and create sediments. The existing storage facilities and infrastructure for petrol & diesel can be
used for the biodiesel with minor alterations. For biodiesel storage, shelf life and how it might break down under extreme conditions
assume importance. The following merit attention for storage of biodiesel:
Biodiesel has poor oxidation stability. Use of oxidation stability additives is necessary to address this problem.
Low temperature can cause biodiesel to gel, but on warming it liquefies quickly. Hence, insulation/jacketing of storage tanks
and pipelines would need to be done at the low temperature zones.
To avoid oxidation and sedimentation of tanks with biodiesel, storage tanks made of aluminium, steel etc. are recommended
for usage.
JATROPHA PELLETISING
FRUITS MACHINES
JATROPHA
SHELLING
SHELL
MACHINE
Jatropha Seed
BIO-CRUDE ELECTRICITY
BIOREFINERY
BIO=REFINERY
BIODIESEL- BLENDING
CRUDE
FACILITY
GLYCERIN
Seed storage
Oil extraction
Catalytic conversion to biodiesel
By-product processing
Process and plant support systems
Various seeds, beans, or algae are the source of the oils. These crops are delivered to the facility and stored on-site in silos or
warehouses. The oil is extracted from the biomass source via chemical or mechanical processes. The fat or oil is combined with an
alcohol such as methanol in the presence of a catalyst in a reactor. This reaction occurs at low temperatures (room temperature to
about 140 degrees F) and low pressure and produces a crude biodiesel and glycerin. Once the reaction is complete, the glycerin,
which is denser, is drawn off the bottom of the settling vessel. Next, the excess alcohol is removed from the biodiesel and from the
glycerin and recovered by distillation. The biodiesel is further purified to remove residual catalysts and other contaminants and then
dried. The biodiesel and glycerin are then pumped to storage tanks.
Additional processing equipment is necessary to produce the biodiesel. A boiler provides steam for cooking, distillation, evaporation,
and other plant uses. A stack is required for the exhaust gas stream. Pollution control equipment (see Biomass Power Plant
discussion) would be required, as well as cooling towers to cool plant process water.
model outsize(mm) votage(V) power(kw) Strip net rate weight(kg) production capacity(kg/h)
FR3000 2150×1560×2250 380 11 ≥98% 1200 3000
1. This machine is made of pull out the poles, below screen, upside cover shell, into hopper, fan, drop hopper, mechanical
and electrical rack.
2, Power after starting, the spindle drive the parallel bars clicked under screen and amid the peanut shells rub them and
strip off, then the below screen hole squeeze out the peanut and the shell, finally sorting out the shell and the kernel by
the fan.
Characteristic:
Simple structure, convenient operation, low power consumption and low noises are all the features of the machine. It can
separate peanut shells and kernel one time, clean and high efficiency.
K10-JSD-Standard-WGM : 10
H.P. Jatropha Seed Decorticator
1 USD 2,300
with Grader Model (3 Phase)
having Size - 48’’ and Capacity:
1,000 – 1,100 Kg/hr
Model 6YL-130A
Output 8-11 tons/24h
Power 18.5kw (Motor included)
Dimension 2350*840*1850mm
Packing for motor 350*700*570mm
Product Description
1.6YL-120A
series is a new kind of optimized automatic oil press based on all advantages of 6YL series ones, increased vacuum filter d
evice, chamber, automatic heating device and control system
2. The machine is characteristics with fine figure, compact structure, easy installment, high automation, rapid heating for c
hamber, pressing at random, high output rate, clear oil and pure flavor and so on.
3.This oil mill could extract vegetable oil from many kinds of oil seeds, such as soybean, rape seeds, peanuts, coconut, sesa
me, etc.
4. The automatic oil press has three parts: Screw oil press; Electrical control box for preheating chamber, vacuum filter for c
leaning oil.
5. All the above three parts work at one time, so only one machine could the user get high quality edible oil.
6. This automatic oil press match P L C display for automatically controlling for seedfeeding, oil flowing, chamber heating,
etc. Then manpower could be saved to improve your work efficiency.
Specifications
This series Coal powder pellet making machine operation principle is: the motor drive the belt and pulley through reducer passing the
power to the driving shaft, and the driving shaft through the open gear synchronization with the driven shaft, extrusion granulation.
Most countries around the world have natural cooking oils that they may use for the production of biodiesel. For example
India has used oil from the Honge tree nuts for years and in Europe they have had access to Camelina seeds and in Africa
and Asia they have access to the palm tree nuts that produces palm oil for cooking.
No matter what feedstock you choose, whether it is derived from the agricultural industry or from recycled used cooking
oil, biodiesel production is a viable business in any country. Versatility of production is the key for entrepreneurial and
governmental success within this industry for emerging markets, expensive large biodiesel processing plants are no longer
required to get started. The name of the game is to co-locate your biodiesel plant next to your feedstock with the help of
modular biodiesel processing plants.
The fundamentals of modular production units are universal. Each unit is built at a manufacturing facility before being
skid-mounted and delivered to its destination. Most, containerized units range in capacity from 1million litres to more
than 8.5 million litres of production capability per year. These plants are also scalable with the ability to be linked together
to increase overall biodiesel production capacity as needed. Modular Biodiesel Processing Plants are a great choice
especially if you need to reduce the logistical cost for transportation of your oil to your production plant.
MARKETING
Today, public concern about the environment, climate change and limited fossil fuel resources are important drivers for governments,
companies and scientists to find alternatives to crude oil.
• Nigeria has an extremely high demand for affordable fuels and steady electricity power supply
• Federal Government of Nigeria’s Biodiesel Policy mandates NNPC to blend fossil fuels i.e. Petrol & Diesel with Biodiesels
(Ethanol & Biodiesel) at a rate of 80:20 by volume which will be called E-20 for Petrol blended with Ethanol and B-20 for Diesel
blended with Biodiesel
• NNPC is also mandated by the same Biodiesel Policy to enter into “OFF-TAKE AGREEMENT” with Biodiesels Producers to
guarantee ready markets.
With the Biofuel Policy of the Federal Government of Nigeria, NNPC would be the major if not the only buyer of Biodiesel produced.
NNPC is to sign an off take agreement with established and registered Bio-diesel companies for their total production output.
Presently, NNPC has not put together facilities for blending of refined Bio-diesel. The Biofuel policy has recommended a 20% of
Biodiesel to be blended with 80% fossil diesel.
The present demand for fossil diesel in Nigeria is as shown in the tale below:
400,000,000
350,000,000
300,000,000
250,000,000
RETAIL
200,000,000 INDUSTRIAL
150,000,000
100,000,000
50,000,000
-
JAN FEB MAR APR MAY JUN JUL AUG SEP
Ambitious Biodiesel support policies have recently been adopted in both the United States (with 60 billion litres of second-generation
Biodiesel by 2022) and the European Union (with 10% renewable energy in the transport sector by 2020).
• There is also a global economic transition from heavy reliance on raw materials derived from fossil oil based resources to a
Bio-based renewable raw materials resources
• A whole range of today's petrochemical products are ready to be replaced by new products made from plant oils.
• Bio-based raw materials may offer important contributions by reducing the dependence on fossil fuels and the related
environmental impacts.
• The focus is now on non-food crops with Jathropha emerging as the new Pin-Boy of renewable energy proponents.
• Contemporary trends across the world indicate a pronounced shift towards Jathropha as a more viable and sustainable
feedstock as an important raw material for these completely new emerging Bio-based industries.
The prospects and Benefits of biodiesel production or development are enormous and very crucial to the swift development of the
economy of any nation. Some of these prospects/benefits include but not limited to the following:
◆ biodiesel can be used in car engines even when it is not yet refined. It can also be blended with normal diesel and used in
cars.
◆ source of foreign earnings since it can be exported as clean fuel to every part of the world. Biodiesel from sunflower, canola,
Jathropha can be used as a substitute for or as an additive to diesel fuel thus providing an alternative source of energy for
◆ it is not subject to market forces and can be readily tapped unlike petroleum products.
◆ it is reputed as the most valuable form of renewable energy that can be used directly in any existing, un-modified diesel
engine.
◆ economic growth is stimulated as it creates more market for agricultural products and stimulates rural development and
generates interest in the youth towards taking up job opportunities in agriculture and farming instead of over-dependence on
white collar job that is not always there. This is particularly important for Nigeria that is majorly agrarian or has the capacity or
potential to become one.
◆ production of biofuel can lead to development of new industries, new jobs, new markets, new technologies, etc.
◆ the foreign earnings could be channeled towards the development of other sectors of the economy especially health and
education sectors.
◆ biofuel generates fewer emissions of carbon monoxide, particulates, and toxic chemicals (that cause smog, aggravate
respiratory and heart diseases and contributes to thousands or even hundreds of thousands of premature deaths each year.)
un-like gasoline and diesel with high emissions. Studies show that biodiesel reduces carbon dioxide emission to considerable
level and can even reduce its emissions to zero. As such, the uptake of carbon from atmosphere by plants and trees reduces
the effects of global warming.
◆ biodiesel is as biodegradable as salt. _It is biodegradable as sugar, ten times less toxic than table salt. It is environmentally
friendly and ideal for heavily polluted cities like Lagos and Portharcourt.
◆ it is cheaper than mineral oil diesel and capable of extending the life-span of engines; and a means of conserving natural
resources. Biodiesel can be used in standard diesel engines, but is often blended with conventional diesel.
◆ according to the International Energy Agency, biofuels have the potential to meet more than a quarter of world demand for
◆ biodiesel is an oxygenated fuel, meaning that it contains a reduced amount of carbon and higher hydrogen and oxygen
content than fossil fuel. This improves the combustion of biodiesel and reduces the particulate emissions from un-burnt
carbon and has high flash point of about 300F (148 C) compared to petroleum diesel fuel, which has a flash point of 125F (52
C)[12] hence, it is a better lubricant.
◆ Biodiesel produced from Jathropha_curcas (50% of the fuel) has been used in January, 2009 by continental Airlines and Air
New Zealand in December, 2008. (As such nothing stops Nigeria from following suit)
◆Jatropha plant is poisonous and can grow on arid or semi-arid soil. It also grows very tall. Hence, it can not only be grown in
desert-prone-areas of the country but can also serve as forest; and when inter-cropped with other crops like maize, beans and
pea nuts, etc is capable of regenerating the soil. As such, the production of biofuel from Jatropha can be done while other
benefits and, or revenue are being derived.
◆ Biodiesels are renewable energy and can drastically reduce greenhouse gases since its production and use is nearly carbon
neutral. It can be gotten from various sources including algae making its prospects almost limitless.
Most biofuel production plants are located within 150 km of the resource being used as the primary process source. The Jatropha
Curcas plant thrives in areas with abundant sunlight. Therefore, the plantation and the biodiesel production plant designed for this
process should be located in sunny regions.
The proposed process makes use of solvent extraction. Because solvent extraction is a complex system that poses specific hazards,
the location of a Jatropha biodiesel plant should be a sufficient distance from residential and commercial areas.
A biodiesel production plant typically requires 5 to 10 acres for all the facilities. The total area of the site is usually larger, landscaped,
and serves as an exclusion area to the public.
Power house
ADMIN BLOCK
Security Post
Discharge point
Way bridge
HUMAN RESOURCES
Board of Directors
Managing Director
Company Secretary
Head, Farm
& Sales
Account & Admin
PRODUCTION
2 MANAGER MSC, BSC i. Coordinate the entire production processes 15,000
(EXPATRIATE) Plus minimum of 12 years ii. Ensure adherence to production standards
Industry experience iii. Supervise processing and production staff
iv. Ensure timely and efficient production
v. Ensure achievement of production targets
3 ADMIN. MANAGER MSC, BSC in Admin. i. Responsible for personnel issues 2,400
ii. Handle staff recruitment, transfers,
Plus minimum of 5 years disengagement and other related matters.
Administrative experience
iii. Handle staff performance appraisal and
promotions
iv. Handle staff welfares and liaise with labour union
MARKETING
6 MANAGER Msc, Bsc in Marketing i. Develop new business relationship and enrich 2,400
Plus minimum of 5 years existing ones.
Marketing experience ii. Drive and promote sales and marketing target.
iii. Supervise the marketing department.
iv. Products and Price survey
v. Monitor Sales
vi. Prepares daily and weekly sales report
vii. Follow up customers and ensure realization of
sales proceeds.
9.3.1. Purpose
Driving the company to become a high performance and commercially focused organization
Encouraging employees to think about and communicate their performance objectives/targets with their supervisors
Performance Development is a systematic approach to maximizing both individual and organizational performance.
o The company shall adopt a “cascading objectives” system. This system links individual objectives to department
o By linking individual performance to company’s strategic objectives, the company ensures that:
i) Individuals at all levels of the organization will work towards achieving company’s objectives and financial success
iii) Employees learn how to set their performance objectives in direct support of division/department objectives
iv) The performance development schedule is aligned with the company’s strategic planning and budgeting schedule
Competencies are observable and applied knowledge, skills and behaviours important for the success of the organization,
personal performance and enhanced contribution.
The company’s Competency Model is directly linked to its core values and vision/mission.
By linking competencies to the company’s core values, this ensures that employees are focused on the “right” behaviours.
iv) Rewarding- Assessing performance for the year with individual appraisal interviews between employees and their
appraisers.
Through these phases, the company follows a systematic, scheduled approach, from setting overall corporate objectives at the
9.4.1 Purpose
The main objective of training and development is to help develop key competencies that enable individuals to perform
In this regard, all training and development programs organized by the Human Resources Department will be geared towards
the following objectives:
• Developing the potential of employees for maximizing mutual benefit to individuals and the company
9.4.2 Policy
3.2. Employee-initiated training/development activities may include external programs that are organized by external
training institutes or by the company.
3.3. Employer-initiated programs may take the form of offering sponsorship for employees to attend external programs or
3.4. Depending on the nature of needs and operational requirements, training/development programs may also be
implemented as job induction, job rotation, on-the-job coaching, counseling, individual or group projects, and
secondment.
FINANCIALS
The project is aims at promoting Jatropha Fruits Value Chain Development in Nigeria. This aspect of projected financials is for the
production of Biodiesel and Biomass from Jatropha fruits.
The feedstock (Jatropha Fruits) for the production will be supplied from the 500 hectares of the Jatropha Curcas plantation. The
biodiesel and biomass production would commence in the fifth year of the Jatropha plantation to guarantee steady feedstock (raw-
material) for the production.
This financial projection covers a 6-year period, starting from the fifth year of the Jatropha Curcas plantation.
N'000
Equity Contribution 100,000
Loan 200,000
300,000
Break-down of project cost is as follows;
N'000 N'000
Land and Buildings
Cost of Land 8,000
Construction of Plant and Other Buildings 60,000
68,000
Plant and Machinery
Shelling Machine 1,250
Decorticating Machine 725
Extracting Machine 945
Pelletizing Machine 1,260
Modular Bio-Refinery 15,750
Total Total
Machinery and Equipment Capacity Number of Cost/unit Cost Cost
Units N'000 N'000 $'000
19,930 63
Accessories & Installation Cost & Logistics 2,989 9
22,919 73
Other Machinery
Diesel Generator 500 kva 1 10,000.00 10,000.00 31.75
Vehicles
Pool Vehicles 5 5,000 25,000 79.37
Trucks 2 7,500 15,000 47.62
Tanker 1 40,000 40,000 126.98
80,000 254
Production programme based on the capacity of the proposed M& E is shown below:
Annual Total Costs (N'000) 321,600 402,000 402,000 402,000 402,000 402,000
Please note that the price per M’ton from the Jatropha plantation is N63,000:00, the N4,000 mark-up per M’ton is for logistics to
biodiesel production plant.
2. Utility Costs
The major item of utility is energy to power the machines. The annual requirement and cost estimates is shown below;
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Electricity in kwh per year 96,000 120,000 120,000 120,000 120,000 120,000
Cost per Kwh (N) 40 40 40 40 40 40
Cost per annum (N'000) 3,840 4,800 4,800 4,800 4,800 4,800
Total Costs of Utilities (N'000) 3,840 4,800 4,800 4,800 4,800 4,800
Provision is also made for hiring an expatriate for the production process.
Operators for Machines & Plant Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Shelling Machine 6 6 6 6 6 6
Decorticating Machine 6 6 6 6 6 6
Extracting Machine 6 6 6 6 6 6
Pelletizing Machine 6 6 6 6 6 6
Bio-Refinery Plant 6 6 6 6 6 6
30 30 30 30 30 30
Man power Requirement and Cost Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Production Personnel
Production Manager (Expatriate) 1 1 1 1 1 1
Production Supervisor 2 2 2 2 2 2
Quality Control officers/Lab attendants 2 2 2 2 2 2
Production Assistant / Operators 30 30 30 30 30 30
Factory Hands 8 8 8 8 8 8
43 43 43 43 43 43
Average Annual Salary Per Person N'000 N'000 N'000 N'000 N'000 N'000
Production Manager (Expatriate) 15,000 15,300 15,606 15,918 16,236 16,561
Production Supervisor 1,800 1,836 1,873 1,910 1,948 1,987
Quality Control officers/Lab attendants 960 979 999 1,019 1,039 1,060
Production Assistant/Operators 600 612 624 637 649 662
Factory Hands 360 367 375 382 390 397
Total Production Manpower Costs 41,400 42,228 43,073 43,934 44,813 45,709
Other Personnel Costs Number of Annual Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Personnel Salary Total Total Total Total Total Total
N'000 N'000 N'000 N'000 N'000 N'000 N'000
Managing Director 1 6,000 6,000 6,120 6,242 6,367 6,495 6,624
Head of Finance & Accounts 1 2,400 2,400 2,448 2,497 2,547 2,598 2,650
Head of Marketing & sales 1 2,400 2,400 2,448 2,497 2,547 2,598 2,650
Head of Internal Audit & Assurance 1 2,400 2,400 2,448 2,497 2,547 2,598 2,650
Head of Admin and Personnel 1 2,400 2,400 2,448 2,497 2,547 2,598 2,650
Public Relations Officer 1 2,400 2,400 2,448 2,497 2,547 2,598 2,650
Sales & Distribution Officers 2 1,200 2,400 2,448 2,497 2,547 2,598 2,650
Account and Audit Clerks 4 1,200 4,800 4,896 4,994 5,094 5,196 5,300
Drivers 6 600 3,600 3,672 3,745 3,820 3,897 3,975
Security guards 8 420 3,360 3,427 3,496 3,566 3,637 3,710
Receptionist 1 960 960 979 999 1,019 1,039 1,060
Cleaners/Office assistants 2 360 720 734 749 764 779 795
Revenue from By-Product (Glycerin) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Glycerin contents (M'tons) 155 194 194 194 194 194
Value @ N150,000 per ton (N'000) 23,231 29,039 29,039 29,039 29,039 29,039
Value @ N75,000 per ton (N'000) 209,592 261,990 261,990 261,990 261,990 261,990
1. Inventory
The annual inventory is based on 1 month of Jatropha Fruits and 3 months for chemicals required for production.
No provision was made for taxation as the company is expected to enjoy pioneer status for five-year period of
operation.
Loan repayment is to commence in the first year of operation with a yearly repayment of N50million. Interest on
loan is calculated at 9% per annum
Below is the loan schedule:
Loan Repayment Balance Interest
Year 9%
N'000 N'000 N'000 N'000
0 200,000 - 200,000 18,000
6 - - -
200,000 68,400
CURRENT LIABILITY
Taxation - - - - - 5,317
TOTAL CAPITAL 300,000 249,470 257,433 264,874 271,561 277,221 321,533
OUTFLOWS
Land & Building 68,000 - - - - - -
Plant & Machinery 22,919 - - - - - -
Generators 10,000 - - - - - -
Other Depreciable Assets 90,000 - - - - - -
Other Facility 17,000
Inventory Expenses 15,000 15,568 7,642 - - - -
Pre-operational expense 25,000 - - - - - -
Raw material Costs 337,873 422,341 422,341 422,341 422,341 422,341
Other Production Overheads - 50,438 52,954 54,703 56,678 58,918 61,470
Administrative Expenses - 36,240 38,605 40,977 43,356 45,744 48,138
Financial Costs - 18,000 14,400 10,800 7,200 3,600
Contingency 6,757 8,447 8,447 8,447 8,447 8,447
Loan Repayment - 40,000 40,000 40,000 40,000 40,000
Taxation - - - - - - -
Total out 247,919 504,876 584,389 577,268 578,022 579,049 540,397
Cash Flow Surplus/(Deficit) 52,081 (21,156) 20,262 27,383 26,629 25,602 64,254
Opening Cash Balance - 52,081 30,925 51,188 78,571 105,200 130,801
Closing Cash Balance 52,081 30,925 51,188 78,571 105,200 130,801 195,055
10.5.1 Returns
Based on cash flow projections prepared after taking into consideration project set up costs and operating results, the project is
expected to generate returns as shown below;
10.5.2 Profitability
Jatropha Value Chain Development is a project aims to promote investments in the production of Biodiesel and Biomass from
Jatropha fruits. In an effort to achieve these, feasibility studies have been carried out to highlight the profitability inherent in this
investment and market opportunities available.
This Business Plan is prepared to highlight the activity required for the project implementation and schedule of the activities to the
Activity I– The Promoters will raise a formidable Board of Directors to formulate policies and manage the Pre-commencement
activities.
Activity II– Raising of initial Equity Capital and sourcing for loan from reputable investors (banks or Venture Capitalist)
Activity III– Commissioning Architects and other Engineering Consultants to draw the site plans and prepare the BOQ for
Government approvals.
The execution of the activities is assumed to take a period of 24 months (Two year). The period is classified as year zero (0) in the
financial forecast.
ACTIVITIES MONTHS
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Organising a formidable Board
1 of Directors
4 Building Constructions
Engineering Procurement
5 Contract
10 Plant Commissioning
In our understanding, a business is sustainable when it meets the social, ecological and economic needs of the present without
compromising the ability of future generations to meet their own needs.
We are convinced that Jatropha is an economically viable alternative to many less sustainable biofuels.
With the availability of land, the promised Government support as stated in the Nigerian Bio-fuels Policy and with numerous
manpower availability in Nigeria, Investment in this project at this time is a right decision.
The project qualifies for carbon credit and attracts Social Impact donors, these are financial cushion that were not included in the
financial projections stated above.
The return on intercropping is a delight and can be described as the icing on the cake.
With all these, this project is recommended for any serious and future looking investor both local and/or foreign.
Thanks.
The aim of the intercropping of Maize plant on the Jatropha Curcas plantation is to maximize the use of resources by exploring
advantage of available space on the plantation thereby boosting the revenue accrue to the Jatropha Plantation.
The maize plant will occupy an estimated available space of 300 hectares of the plantation. The Jatropha plant has a 3 by 3 metre
space.
Details of Revenue and Expenditure for the intercropping of maize plant on Jatropha Plantation are as follows;
Year 1 Year 2
N'000 N'000
Projected Revenue
Sales Of Yield 170,100 170,100
Year 1 Year2
5 Cost Of Weeding (Herbicide) N'000 N'000
Cost Of Herbicide @ N3,000 Per Hectare 900 900
9. Projected Revenue
N'000 N'000
Revenue @ $600/Metric Ton (N315 Per $) 170,100 170,100