PRODUCTION OF CASSAVA CHIPS

Unlike Cassava starch, flour and pellets, production of Cassava chips is the least capital intensive with minimum investments and good return on assets employed.

Cassava Chips are non fermented cylindrically shaped products of about 3-5mm in diameter obtained from freshly harvested Cassava roots. They are now gaining prominence in Nigeria and all over the world as viable ingredient for compounding animal feeds for pigs, dairy cattle, poultry, fish etc. They are accepted because cassava is just like feed grains which consist almost entirely of starch and easy to digest. Many feeding experiments have shown that cassava provides good quality carbohydrates which may be substituted for maize or barley. It can not be used as sole feed stuff because of its deficiency in protein and vitamins; it must therefore be supplemented by other feeds that are rich in these elements. Cassava chips are also widely used for the production of ethanol which is gaining much currency as bio-fuel because of its safer and more ecological friendly qualities.

Equipment Required

Industrial weighing scale (0kg – 1000kg)

Chipping machine with 5hp motor and output of 1ton/hr.

Cabinet dryer with 20 stainless steel trays, heating element and thermostat to regulate the heat flow.

A small production hall of about 10meters by 8meters.

The Cost of the Equipment

The cost of the equipment is about N1.5million and the building is estimated at about N1.3million.

The cassava is peeled manually and then chipped and dried. The chips are then cooled at ambient temperature and packaged in bags.

The Demand for Chips

Local feed producers are now placing orders for chips at an unprecedented rate because they have suddenly realized it’s efficacy in compounding feeds. About three ethanol plants are coming up soon in the country and that will further increase the demand for chips. China imports enormous quantities of chips and starch and they look up to Nigeria as the world largest producer of Cassava for their supplies.

The EU Animal Feeds Industry is the biggest consumer and importer of the product because of their large animal husbandry industry. They imported about 6.9million tones of Cassava products in 2000. The composition of feed compound varies according to the animal (cattle, pig, poultry) as well as to the kind of production (dairy, meat, or egg). The maximum content of Cassava products in compound feedstuff is officially set in many countries.

For instance, in Germany feedstuff for pigs must contain between 10-40percent Cassava while that of cattle is 20-25 and poultry 10-25percent.

The major Cassava importing countries are: EU countries, China, Japan, South Korea, Indonesia, and United States. Other countries that also import very significant quantities are: Netherlands, Spain, Belgium and Luxembourg. American companies are now making very spirited enquiries for Nigerian chips and starch for their ethanol projects. We have received several enquires in our websites and are now selecting credible companies to introduce to them. If you think your company is credible, you can contact us. Americans are seriously considering minimizing the usage of corn for ethanol production because of food security implications.

Prices of Cassava Products

World trade in Cassava is steadily increasing. It increased by 36percent in 1995-2004, that is from 6.17million tones to 8.4million tones. Despite this, the international prices remain low because the importers from EU countries control the world price. The prices are influenced by the prices of grains, especially barley. It is envisaged that the production of ethanol will drastically increase the demand for Cassava products thereby increasing the prices.

Nigerian chips are selling for $400-$450 per tonne. The price of Cassava root can be as low as N5, 000 or as high as N8, 000 per tonne depending on the area and the season. Prices are highest during the dry season and lowest during the rainy season.

Production and Profit Analysis

Production at 255 days per year, 8hrs/day and 1 ton/hr._______2, 040 tons of raw chips.

Dried chips (4:1) 2040                                                                     = 510 tons of dried chips

4

Sales at $400/ton                                                                                             =N23, 868, 000

Cost of raw material (2, 040 x N7, 000)                    = N14, 280, 000

Gross Profit (N23, 868, 000-N14, 280, 000)                             = N9, 588, 000

Operating overhead 20% of Sales                                             = N 4, 773, 600

Net Profit (N9, 588, 000 – N4, 773, 600)                  = N 4, 814, 400

Return on Assets employed 4, 784, 000 x 100      = 170.8%

2, 800, 000    1

When the project operates on two shifts, the profit will double to

N9, 628,800.The only investments required are N1.5million for the equipment and about N1.3million for a small hall for the production.

The return on assets employed is 170.8% which is very good. It is a lucrative venture and is highly recommended for SMEs.