FEASIBILITY STUDY AND BUSINESS PLAN SETTING
UP OF INTEGRATED PALM OIL MILL INDUSTRY AT (NAME OF LGA) AND DEVELOPMENT OF
PALM OIL TREE PLANTATION IN (NAME OF STATE HERE) STATE OF NIGERIA
TERMS OF REFERENCE (TOR)
GENERAL
INFORMATION - We can write this business plan for you.
YOUR
COMPANY is proposing to set up Palm Oil Mill Industry at (Location)
in (Name of LGA) Local Government Area
of (Name of state here) State of Nigeria (hereinafter referred to as the
‘’Project’’). The objective of the project embodied in this
feasibility study is to enhance self-reliance in palm oil production and processing
industry thereby creating one of the most effective avenues for poverty
alleviation, food security and ensuring economic stability in Nigeria. The palm
oil industry has the prospects of providing employment for millions of
unskilled and semi-skilled people.
As demonstrated in other
economies, with proper focus on production of commodities of large scale
commercial values, improvement in the production of oil palm can effectively
mitigate the poverty level in Nigeria and especially in the local communities.
Hence the economic growth and prosperity are central to long-term poverty
alleviation for social and environmental sustainability.
This feasibility study and
business plan provides a unique assessment of the palm oil value chain in (Name
of LGA) locality of (Name of state here) State and its actors of value chain
functions, as well as impact on the overall small and medium scale industry.
Currently, there is
abundance of palm tree plantation in different Local Government Areas of the
state which makes the area a good site for growing palm oil trees as well as
establishing the palm oil mill. The proposed palm oil mill will be called (Name of Mill Here).
The oil mill will focus on
the production of palm oil, palm kernel oil and palm kernel proceeds needed for
the making of soaps, pomade and even snacks. The products for this oil mill
serve as raw material for cosmetic industries, food and snacks making
industries.
The proposed oil mill will
be an integrated 3-8 tons/hour processing plant that will process palm fruits
into different products such as palm oil, palm kernel and by products that may
be used for powering the steam engine and any other viable use.
To aid in
carrying out the feasibility study and business plan for setting-up the oil mill and provide advice in line with
international best practice, YOUR
COMPANY is seeking to hire an
international expert (the Consultant) who will provide high level support and
advisory services to the Company.
In addition, the Consultant
will also develop a projected financial plan for YOUR COMPANY based on this assignment and lessons from his previous
engagements.
PROJECT
BACKGROUND
This feasibility study has
two components namely:
An
industrial component involving ‘’Setting-up an Integrated Palm Oil Mill
Industry’’ for the production and processing of Crude Palm Oil (CPO) and Palm
Kennel Oil (PKO) respectively.
An
agricultural component consisting of ‘’Palm Oil Trees Plantation’’
An
option of setting up a crude oil refinery for
On successful
establishment of the integrated palm oil mill industry, YOUR COMPANY will expand into palm oil trees plantation on a quest
to realize its vision which includes a goal of leading the sustainable
development of (Location) (Name of LGA)’s
palm oil growing and milling company.
SCOPE OF WORK
Task 1: Documentation Review and Field Trip
A.
The Consultant will undertake the
review of the Project materials and complete a preliminary research on the
existing experiences in third party monitoring programs. The
research will aim to determine:
The existence
of similar models;
Main
achievements of such models; and
Key
challenges faced by these models.
B. The consultant will undertake to survey the
neighbouring towns/states, to determine the availability of palm fruits
required to adequately feed the proposed plant on a regular basis. This will
aim to determine:
Estimated
available quantity in each town.
Seasonal
availability in each town.
Average
cost required to purchase and deliver the palm fruit from each of the locations
to the factory site at (Name of LGA).
Supply
chain management necessary to optimise the purchase of the product.
Key
challenges faced in the purchase of the palm fruit from each of the identified
localities.
C.
The consultant will undertake to carry out
market analysis as regards to demand and supply. The targeted sales location
and the market sizes with a view to determine:
The market
demand for the products in different localities in the country and exportation
potentials.
Market
analysis including demography, growth potentials in each of the identified
localities.
Supply
analysis, to include available marketing channels and recommended optimised
channel adopted for the different localities and groups.
Export
potentials and identified market
Average
selling price in each of the localities, for different seasons. For both local
market and export.
D.
Production plant Installation: The consultant
to review and evaluate proposed equipment and advice on any alternative,
proposed manpower requirement, production shift, statutory levies and fees and
any associated cost.
E. Attached
with the TOR is the proposed plant to be used by YOUR COMPANY for the integrated
palm oil production. The consultant should be at liberty to propose any other
plant in so far it can optimise production. The capacity of proposed plant
should be between 3-8tons per hour capacity plant partially or fully automated.
In analysis the cost of the plant, consultant should give due consideration to
the parts of the plant than can be manufactured locally in order to reduce
cost.
The
company has a land of approximately 16,000m2 of land available for the
installation of the production plant. The land is empty and will require
clearing, fencing, hard surfacing, office and administrative building,
warehouse, workshop and factory building etc.
Task 2: Expert advice and lay down support
for the project scoping phase:
In support
of the scoping phase, the Consultant will provide advisory report and
recommendations as needed to the Company and the Contractor and more
specifically in the following areas:
a. The management structure for the oil palm growing and
milling: requirements for the scale and complexity of the intervention and for
effective decision making processes. Because participatory monitoring process
assumes the independent nature of the actors who carry out the monitoring
activities, an emphasis should be placed on putting in place the necessary
processes that assure this principle and also allow the actors involved to
reflect on their observations and assessments, adapt their activities
accordingly, and deepen their dialogue with one another. Development of
relevant documentation that would define roles and responsibilities and thus
help manage expectations will be important for these processes to function
effectively;
b.
The determination of
feasibility areas, size and composition of field work, monitoring units and
their representative of the project affected communities;
c.
The delivery of the
administrative workshops;
d.
The training plan: ensuring that capacity building program for the local field
workers are in line with the existing capacity and that appropriate level of
resources (time, staff, etc.) is secured to undertake it;
e.
The compensation scheme
for the community assistants (if such is needed);
f.
The communication
strategy: ensuring that the processes for
communicating the findings of the field workers are sound and allow for the
incorporation of inputs from various stakeholders.;
g. The monitoring plan, field manual and database:
ensuring that there is a monitoring
and evaluation framework put in place including relevant qualitative and quantitative
indicators, targets, and milestones. The objective of the monitoring and
evaluation framework is to feed the relevant information on the feasibility
study performance into the decision making process and to allow the Company
identify its successes and improve , as well as monitor the program performance
against the targets.
h.
Exit strategy: Ensuring that there is a sound exit strategy for the
feasibility study program. The exit strategy should look at the various ways to
internalize the participatory feasibility study and business plan process,
potentially involving the trained field assistants in project and/or ensuring
that there is a mechanism to ensure sustainable flows of information to and
from the project location on the issues important to them.
i.
This strategy should also assess
potential financial mechanisms to sustain the process in the long run e.g.
creation of trusts funds, loans and banking etc.;
j.
Facilitation of the feasibility study that
would follow the submission of a finding report with recommendations. on the
design of the program. The objective will be for YOUR COMPANY, the Contractor and
identified local stakeholders to jointly review the scoping analysis and
recommendations, and agree on the potential contributions, as well as the roles
and responsibilities of each party going forward.
The outputs of this phase will
consist of brief back-to-office reports (BTORs) for each trip detailing the
Consultant’s advice/inputs to the process including in the areas listed above,
as well as a final summary report providing an overview of the service provided
and an assessment of the value added to the Contractor’s outputs.
Task 3: Learning product development
The
consultant will develop a manual that will provide guidance on critical success
factors and challenges, as well as recommendations and tools for third party
monitoring programs with a specific focus on replicability and sustainability.
This manual shall include a number of templates/checklists/visuals that can be
used by project managers.
DELIVERABLE
The short-term consultant
will deliver the following:
·
A
series of BTORs detailing the Consultant’s inputs to the scoping phase and a
final summary report and assessment of services rendered;
·
A
feasibility study and business plan report
(not more than 50 pages long) covering the following:
1. Literature Review on
existing third party executed programs;
2. Analysis of successes and failures of third party
executed programs
3. The palm oil
production chain
3.1 What industry/sector is this concept directly
or indirectly related to?
3.2 Defining the industry
3.3 Unique value
3.4 Innovation opportunities
3.5 Market needs / social problems and solutions
3.6 Is the product or service feasible
3.7 Targeted market / beneficiary
3.8 Market size
3.9 Market characteristics
3.10
How to bring this idea to live?
3.11
Social/economic value
4.0 Project justification
4.1 Basic assumptions
4.2 Industry / factory location and safety
4.3 Available property
4.4 Installed capacity:
4.5 Project details:
4.51 Technical analysis /
production process
4.6 Raw materials requirements (Where to buy them)
4.7 Proposed Machine (analysis and recommendation)
4.8 Final products:
5.0 Financial analysis of machines and other equipment
5.1 Financial assumptions
5.2 Finance charges
5.3 Financial analysis
5.4 Financial projections
5.5 Project capital structure
6.0 Market demand
6.1 Market analysis
6.2 Supply analysis
6.3 Economic viability analysis / impacts of the project
6.4 Risk analysis
6.5 Key sustainability impacts of palm oil production
SECTION TWO -
FEASIBILITY STUDY
1.
Production analysis
2.
Medium scale palm oil mill general
analysis
3.
Cost of raw materials (FFB
processing)
4.
Sales report
5.
Sample of palm kernel nut (PKN)
business
6.
Returns on investment
7.
Summary of cash flow projection
8.
Initial working capital requirements
9.
Items to be financed
10. Projected profit and loss statement
11. Recurrent cost items
12. Salaries and wages
13. Administrative expenses
14. Break-even analysis
15. Profitability
16. 5 years graphical projection
17. Bar chart representation of the projection
18. Business expansion
18.1
Palm oil Plantation
18.2
Palm oil refinery
19. Conclusion
20. Appendix i
21. Appendix ii
Schedule (TENTATIVE SCHEDULE)
This assignment is expected
to require about 5 working days over a period of 7 weeks starting in March,
2015.
The schedule shall be
determined in discussions with the Company and the Contractor and will depend
on the feasibility survey schedule and other technical inputs.
REPORTING
The
Consultant will report directly to THE CEO, who
will supervise the assignment.
All reports are to be
written in English. The Consultant will
provide an electronic version of all the required deliverables. The reporting will be completed in form and
substance acceptable to YOUR COMPANY
QUALIFICATIONS
The successful candidate
will have the following qualifications:
·
The
selected candidate will have a degree in Engineering, Sciences, Agriculture
Economics, anthropology, environmental and/or
social sciences with a
minimum of 10 years of relevant experience - preferably but not exclusively in
developing countries - with a comprehensive and in-depth expertise in
agricultural economics, development
economics, implementation and assessment of Environmental, Social, Health and
Safety Management Systems (ESHS-MS);
·
Strong
knowledge of principles and processes of feasibility survey, auditing,
conducting environmental and social impact assessments;
·
Experience
working with a wide spectrum of commercial and industrial businesses, but
particularly small and medium enterprises (SME) such as palm oil trees
plantation and setting-up an integrated palm oil mill industry;
·
Knowledge
and experience in working with community organizations and developing and
facilitating training programs and multi-stakeholder dialogues for communities,
NGOs and other local stakeholders. Experience with promoting participatory
monitoring and evaluation techniques is highly desirable;
·
Demonstrated
professional leadership and ability to coordinate a team of professionals in
the implementation of major development efforts;
·
Capacity to
think creatively in dealing with policy and operational issues while
maintaining a strong client and results orientation;
·
Strong
written and oral communication skills, demonstrated ability of making effective presentations
to diverse audiences. Fluency in English
essential; knowledge of project location area language desirable.
CONFIDENTIALITY
STATEMENT
All data and information
received from YOUR COMPANY for the
purpose of this assignment are to be treated confidentially and are only to be
used in connection with the execution of these Terms of Reference. All
intellectual property rights arising from the execution of these Terms of
Reference are assigned to YOUR COMPANY.
The contents of written materials obtained and used in this assignment may not
be disclosed to any third parties without the expressed advance written
authorization of the YOUR COMPANY.
methodology
The feasibility study
program must be based on internationally accepted implementation methods but be
flexible and user-friendly. The staff themselves must feel comfortable with
this program and be confident in their ability to use the instruments to
communicate accurate and timely information.Literature and other media
intended for the implementation of the project must be clear and
understandable.