How To Start Instant Pounded Flour Production Business

  1. Introduction

Instant pounded yam flour is the flour obtained when parboiled yam is dried and milled. The flour is creamy white in colour and is used in the preparation of a popular African dish called Pounded-Yam.

  1. Industry Analysis

The annual national and international demand for Instant Pounded Yam Flour is estimated to be over 500,000 tons. In the international market, a large market exists in Europe and America and other continents most especially with sizable African residents/immigrants. There is currently a large shortfall in supply of the product for both the domestic and international market. 

The supply gap has continued to expand as the population of the country grows and as a result of the rural urban drift in the country. With a population of about 200 million people and an estimated national population growth rate of 2.56% per annum, an average economic growth rate of 2.5% per annum in the past ten {10} years, Nigeria has a large and growing market for Instant Pounded Yam Flour.

The growth of the middle class in Africa in general, and Nigeria to be specific, has led to a need for hygienically processed, easy to prepare and well packaged food products like Instant Pounded Yam Flour..

  1. Raw Materials Requirement

The basic raw material for the production of amala flour is yam tubers. Yam is the common name for some species in the genus Dioscorea (family Dioscoreaceae). These are perennial herbaceous vines cultivated for the consumption of their starchy tubers in Africa, Asia, Latin America and Oceania. 

Worldwide yam production in 2007 amounted to 52 million tons, of which Africa produced 96%. Most of the world’s production comes from West Africa representing 94%, with Nigeria alone producing 71%, equaling more than 37 million tons. Though yams can be stored up to six months without refrigeration most of the yearly production is lost through spoilage because of lack of post-harvest facility in the country.

Taraba is the top region by production of yam in Nigeria. As of 2005, production of yam in Taraba was 3,162 1000 metric tons that accounts for 12.89% of Nigeria’s production of yam. Other states that produce yam in large quantities are Benue, Niger, Enugu, and Kaduna.

Other raw materials that will be needed in an Instant Pounded Yam Flour  production business are water and packaging materials.

  1. Machinery & Equipment Requirements

The major equipment needed in a small-scale Instant Pounded Yam Flour production plant are: Yam slicing machine, boiler, fermentation tanks, drying machine, hammer mill with cycle, Sifting machine, Weighing Scales, Sealing Machine, Knives, etc.

EquipmentFunctionPicturePrice
Yam Chipping MachineFor cutting the yam into smaller sizesN1,400,000
Parboiler Boiler3 UnitsFor Boiling WaterN600,000Per Unit
Drying Machine2 unitsFor drying The fermented yam chipsN1,400,000 per unit
Sifter 2 UnitsFor siftingN200,000 per unit
Hammer Mill With CycloneFor grinding/crushingN600,000
Automatic Packaging Machine.(This machine is optional because manual packaging is possible)For PackagingN3,000,000
Weighing ScaleFor weighing productsN100,000
Sealing MachineFor sealing final products in bags.N50,000
Sealing MachineFor sealing final products in sachetsN70,000

Notes: The above prices are applicable as at the time of writing this report. 

  1. Production Process

Typically, when yam comes into the factory, it is first washed and peeled, then it goes through the following steps:

A. Chipping

Peeled yam tubers are chipped into smaller sizes using the chipping machine. This allows for quicker drying time.

B. Parboiling

The chopped yams are transferred to the parboiling tanks which boil the sliced yam for 10 to 20 minutes depending on the size of the yam slices. The water is then drained and the parboiled yam is allowed to cool.

C. Drying

The parboiled sliced yam is transferred to the drying machine and allowed to dry. This process takes about 6 to 10 hours depending on humidity.

D. Milling

The dried yam slices are transferred to the hammer mill which grinds it into flour.

F. Sieving

The flour is sieved using the sifter machine to remove particles, fibre, etc and produce fine powder.

G. Packaging

The final product is then packaged into desired packs of 25Kg, 10Kg, 5Kg, 2Kg, 1kg, etc.

  1. Profitability

The profitability of instant pounded yam flour production largely depends on the cost of the primary raw material, yam. The price fluctuates with season, demand and supply. As the price of yam changes, so also does the price of instant pounded yam flour.

  • As of the time of writing this report, the average cost of yam is N220,000 per ton. Depending on the quality of yam, an average of 1,000Kg of instant pounded yam flour is obtainable from processing 3 tons of yam. This implies that it will cost N660,000 to produce 1 ton of instant pounded yam flour.
  • The average factory price for instant pounded yam flour is eight hundred and fifty naira (N850) per kilogram.

This implies that a revenue of (N850 X 1000) = N850,000 is obtainable from processing 3 tons of yam to produce 1 ton of instant pounded yam flour.

Gross Profit is calculated by subtracting the cost of production from the sales.

Gross Profit = N850,000 – N660,000 = N190,000

Assuming operating expenses (including cost of packaging) takes 30% of profits, profit realisable from producing 1 ton of instant pounded yam flour will be one hundred and thirty three thousand naira (N133,000).

The proposed setup will have the capacity of producing 4 tons of instant pounded yam flour per day.This will translate to a profit of N133,000 X 4 = N532,000 per day.

If the factory works for 25 days per month and at 50% of the installed capacity, this will translate to a profit of N6,650,000 per month.

  1. Capital Requirements

The estimated total required capital for setting up a small-scale Instant Pounded Yam Flour production plant is put at nineteen million three hundred and twenty thousand naira (N19,320,000). This includes the cost of factory rent, machinery procurement and installation, staff training, and working capital. 

Get The Instant Pounded Yam Flour Sample Business Plan

We have prepared a sample business plan on instant pounded yam flour production which you can easily edit and make your own.

The business plan is ideal for existing or aspiring entrepreneurs who want to maximize their chances at securing a loan or investment.

The plan will have:

✔️ 3 years production forecast

✔️ 3 years sales forecast

✔️ 3 years gross profit forecast

✔️ 3 years OPEX forecast

✔️ Net profit analysis

✔️ Customer segmentation

Etc

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