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.
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.
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
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
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.
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
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.
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.
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.
THIS IS A SAMPLE | WE ARE PROFESSIONALS IN WRITING