Logistics for vegetable oil production (sesame oil)

Sesame, also known as benni seed is very rich in edible oil and the oil has been found to be very low in cholesterol making it very healthy for consumption.

Most nutritionists like it for two reasons. First, it is very rich in mono and polyunsaturated acids (PUFAs), the kind of fat that reduces cholesterol. Second, sesame oil is low in saturated fats, the kind of fat that is bad for human body. It also contains two major unique chemicals called sesamol and sesamin. They are very powerful antioxidants.

Market information

The demand for vegetable oil is quite high in Nigeria. Benniseed oil could be used for both domestic and industrial purposes.  As industrial oil, benniseed oil can be used in printing ink manufacturing industry, paint industry, putty making industry, cosmetics industry, foam making industry amongst others.  As cooking oil, sesame oil can be used for domestic cooking especially for engagements such as birthday, burial ceremony, house warming, thanksgiving services, wedding ceremony, etc.

Naturally, the potential for sesame oil is very high with great prospects for production and marketing in Nigeria.

Raw materials

Benniseed or sesame is an annual plant usually grown in areas with an annual rainfall of 625 – 2250mm.  It is grown largely in China, Russia, USA, Australia, Brazil, Egypt, India, Thailand, Nigeria, Sudan and Uganda.  The world output was given as 2.83 million tonnes (FAO, 2001). With annual production output of 115,586 metric tonnes, Nigeria was the eighth largest producer of Benniseed in the world in the year 2010.

The seed is a staple food for many ethnic groups in Nigeria and it is cultivated in most local government areas in the Middle Belt and some Northern States in Nigeria with Benue, Taraba, Plateau, Nassarawa, Kogi, Katsina, Jigawa and Kano States as major production centres.

Machinery and equipment

The major machinery and equipment for Sesame oil extraction are: Mechanical cleaner, Mechanical debiterer, Dehuller, Hull separator, Oil filter press, Expeller with kettle, Mixing tank, Semi-automatic filling plant, Shrink wrapper for label and neck sleeve, Conveyor belt, Storage tank, e.t.c.

Production technology

Sesame oil extraction includes the following simple unit operations:

Seed and nut preparation

The sesame seeds are properly selected, cleaned and weighed appropriately.

Expelling: The oil is expelled from the seed using a mechanical oil expeller.

Filteration: The extracted oil is cleaned or filtered to remove suspended or solid particles using a filter press.

All the additives (including antioxidants, foaming agents, micro nutrients e.t.c.) are thoroughly mixed with the extracted oil.

Filling: The filtered oil is filled into plastic containers of various sizes.

Labeling: The filled containers are labelled for proper identification.

Cartoning: The bottled oils are packaged in cartons appropriately

Sales: The packaged oil is ready for sales.

Production programme

The following assumptions are made in arriving at the proposed production programme.

Production Weeks/Annum:    50

Production Days/Annum:    300

Production Volume/Day:    5 tonnes                                                                                     (raw materials)

Production Volume/Annum:                                                         1,500 tonnes (raw materials)

Labour requirement

The required manpower for successful operation of this venture consists of both skilled and unskilled personnel. These consist of the production, administrative/account and marketing personnel. Staff matters, finance/account, store management, security, purchasing and other administrative functions are handled by the administration/account division, while the production division takes charge of production. Marketing activities are the responsibilities of all the staff especially the marketing division staff. About 50 personnel are required for the project to take off.

Total initial capital investment

Initial Fixed Capital                    N20,281,810.00

Initial Working Capital               N13,091,170.00

Pre-production Expenses              N1,932,110.00

Contingencies                              N1,765,254.50

Total                                  N37,070,344.50

NB: The initial fixed capital includes factory building, machinery and equipment, generator, project vehicle, office furniture and equipment and bore hole.

Profitability indicators

Return on Investment (Year 1) =57.4%

Return on Equity (Year 1) = 143.5%

Net Profit to Sales              =11.9%

Gross Profit to Sales          =17.0%

Profitability Index              =2.5

Breakeven Point (Year 1)    =37%

Payback Period                 = 1.7Years

Net Present Value at 25% =

N23, 799,250.00

• Source: FIIRO