Do you want to start a yam flour company and need to write a plan? If YES, here is a sample yam flour production business plan template & feasibility report. Yam is a tropical annual climbing plant that is tuber bearing in nature. It is commonly eaten in West Africa especially in Nigeria. Due to growing changes in lifestyle and stress levels, people now prefer already processed yam flour that makes food making easy.

Yam flour is milky white in colour and slightly sour in taste with a slightly fermented flavour. Made from fermented fresh yam tubers, it can be prepared the same way semovita, foofoo, dawavita and the rest are prepared. It can be eaten with stew or soup.

Why Start a Yam Flour Production Company?

The market demand for yam flour has been growing massively over the years due to factors like growth in population, lack of time, convenience, quick preparation etc. It is mostly beneficial to wives who have so many things to handle in the house, most especially career wives that joggle work and family chores. Yam flour is also an active ingredient in the preparation of biscuits, cake, bread etc.

According to reports, over 30 percent of harvested yam tubers in Nigeria are wasted or spoilt due to lack of mechanism for preserving and processing them. However, these days, farmers now know that the best way to preserve yam is to convert them to flour. West Africa accounts for 90-95 percent of the world yam production and

Nigeria is a leading producer with over 66 percent. A business that processes yam into flour can be lucrative in rural communities where yam is prevalent. Aside from attracting development to that area, it will also bring employment to the youths in the area that probably would have migrated to town in search of greener pastures. Farmers would be relieved, as they will not have to watch their food crops waste.

The supply gap in the industry keeps widening globally due to the ever-growing population, and therefore creates demand that you can easily fill if you have the need equipment and expertise. The only raw material you need to start this lucrative business is yam. The major producers of yam in Nigeria are Adamawa, Plateau, Benue, Taraba, Cross-River, Edo, Kaduna, Delta, Ogun, Ondo, Oyo and Osun States.

A Sample Yam Flour Production Business Plan Template

1. Industry Overview

Yam is an important source of carbohydrate for many people of the Sub Sahara region especially in the yam zones of West Africa. It remains the second most important tuber crop in Africa, after just cassava root, with production reaching above one third of the level of cassava.

Yam tuber is without doubt a starchy food, its key nutritional function being the supply of calories to the body. This characteristic contributes to the sustaining of food supply, especially in the scarcity periods at the start of the wet season.

Yam tubers grow up to 2.5m (8.2ft) in length and weigh up to 70kg (154lb). It has a tough stem that softens after heating. They are annual or perennial tuber-bearing and climbing plants with over 600 species out of which six are economically important in terms of food and medicine.

It is one of the principal tuber crops in the Nigeria economy, in terms of land under cultivation and in the volume and value of production. These tubers are grown on over 5 million hectares in about 47 countries of the world with Nigeria as the leading world producer.

Note that most of the yam produced around the globe comes from Nigeria, which is the highest producer and exporter worldwide (about 70 percent of global production) followed by Ghana and then Cote d’Ivoire. Oyo North remains the major and highest yam-producing zone in Nigeria as well as in the whole South West of Nigeria where the common species are Dioscorea rotundata (White Yam) and Dioscorea alat (water yam).

In these areas, the variety of yam cultivated depend on the yield, commercial value as well as excellent food products. Yam production in this area is on commercial production that can sustain any yam-processing venture resulting in high profits. There are specific varieties of the two yam species (Dioscorea rotundata and Dioscorea alata) which are best suited for particular yam products.

2. Executive Summary

Nigeria has not been able to exploit its abundant yam tuber population to become a major player in the international processed yam sub-sector. The major reasons include; non-availability of appropriate yam storage, lack of low cost processing equipment and absence of modernized forms of yam processing. To the amelioration of these, we plan to start Emeka and Sons™ Yam Flour Production Company.

Emeka and Sons™ Yam Flour Production Company, Inc. is a registered business that will process and produce yam flour in Abakaliki, Ebonyi State. This business aims to promote investments in Instant Pounded Yam and Yam Flour in Nigeria.

In an effort to achieve these, we have carried out extensive feasibility research and put together a business plan to highlight the profitability inherent in this investment. All information used in this business plan were sourced from various reliable sources, which aside from our due diligence, includes statistics taken from the office of Food and Agriculture Organisation and the National Bureau of Statistics in Nigeria.

This business plan provides a financial and economic analysis of the opportunities available in this sector for us and identifies the potential technical strengths and challenges that we may encounter. We chose to locate our business in Abakaliki after our extensive research because it provides us with close proximity to yams from Ebonyi, Benue and Enugu.

Abakaliki still remains a centre of agricultural trade for such products as yams, cassava, rice, palm oil and palm kernels. Abakaliki lies at the intersection of the Enugu, Afikpo and Ogoja Roads. In recent years, there have been massive infrastructural developments ongoing in the urban centre; these include road construction, shopping malls and market places, trans-Sahara fly-over bridges at presco and spera-in-deo junctions amongst others.

As the city keeps booming in growth, we at Emeka and Sons™ Yam Flour Production Company, Inc. will receive an added boost of traffic. We are aggressively planning for a 50 percent increase in sales the second year of business. We believe that by creating good supply channels, we can comfortably increase sales by more than N3, 000,000 over three years while maintaining a gross margin of 80 percent.

Through a philosophy of “nothing but the best” regarding both product and service, we plan to make sure our yams and every other product produced in our facility remains exceptional. Our plan is to be profitable within the first year of operation. We also plan reinvest in the company and expand to three more facilities across the country by the third year.

3. Our Products and Services

Although most of the yams produced in Nigeria are fresh yam, informal yam processing has formed an integral part of culture. These informal processors process yam into yam flour majorly, and this is where our company Emeka and Sons™ Yam Flour Production Company, Inc. falls in. At this initial stage of our business, we plan to offer the products elaborated below, but will grow our business offerings as our business expands in coming years.

  • Yam Flour

Yam flour is brownish in colour and produced from dried yam. Yam flour is often fortified with vitamins (e.g. A, B, B2, B3) or minerals (e.g. iron), or occasionally blended with other flours. With regard to the properties of the product, yam flour should have a moisture content of around 10 percent, and should be free of moulds (fungi), etc. Dried yam products have a shelf life of approximately one year.

  • Frozen Yam Chips

This is a product derived from yam tubers frozen to preserve them before actual preparation or use. Frozen yam is a product that takes off the stress, as it is easy to prepare. Frozen yam chips when prepared are also called French fries.

French fries are batons of deep-fried yam. French fries are served hot either soft or crispy and generally eaten as part of lunch or dinner or on their own as a snack and they continuously appear on the menus of fast-food restaurants.

  • Instant-Pounded Yam Flour

In Nigeria, pounded yam is consumed by almost every tribe in the Country. Its consumption cuts across all regions, age groups, economic and social classes. It is served in parties, ceremonies, hotels, restaurants, and as a family menu.

The traditional method of making pounded yam which requires physical pounding with pestle and mortar by two or more persons depending on the quantity, is very laborious and mostly unhygienic. We have learnt and perfected a process technology for production of Instant Pounded Yam Flour (IPYF to remove the drudgery associated with the traditional pounding method.

4. Our Mission and Vision Statement

  • Our Vision at Emeka and Sons™ Yam Flour Production Company, Inc. is to build a massive yam production facility that will provide the people of Nigeria with grade one-yam flours and well prepared yam related products.
  • Our mission at Emeka and Sons™ Yam Flour Production Company, Inc. is to provide our customers with high-quality flours, produced in a clean and sustainable environment.
  • We plan to make enough profit to generate a fair return for our investors and to finance continued growth and development in quality products.
  • We have put plans in place to ensure a friendly, fair, and creative work environment, which respects diversity, new ideas, and hard work.

Our Business Structure

At Emeka and Sons™ Yam Flour Production Company, Inc., our business structure will be a relatively flat one, since most of our personnel will be involved in production and there will be a relatively low headcount in management. We will be managed by our two founding partners.

These partners, Emeka Edochie and Sampson Onuoha represent sales/management and finance/administration areas, respectively. These two men will provide funding from their own savings, which will cover start-up expenses and provide a financial cushion for the first months of operation. Below is the administrative work force we need at Emeka and Sons™ Yam Flour Production Company, Inc.,

  • MD/CEO
  • Production Manager
  • Account Manager
  • Admin Manager
  • Marketing manager
  • Audit Manager
  • Store manager

5. Job Roles and Responsibilities

Chief Executive Officer

  • Implementation of Board decisions and policies
  • Provide administrative and direction guidelines
  • Ensure achievement of set objectives
  • Management of resources to ensure achievement of goals
  • Liaise with government institutions and other relevant agencies.

Production Manager

  • Coordinate the entire production processes
  • Ensure adherence to production standards
  • Supervise processing and production staff
  • Ensure timely and efficient production
  • Ensure achievement of production targets
  • Keep proper records of factory maintenance
  • Handle stock order and re-order

Account Manager

  • Tasked with preparing financial reports, budgets, and financial statements for the organization
  • Provides managements with financial analyses, development budgets, and accounting reports
  • Tasked with financial forecasting and risks analysis
  • Performs cash management, general ledger accounting, and financial reporting
  • Tasked with developing and managing financial systems and policies
  • Tasked with administering payrolls
  • Ensures compliance with taxation legislation
  • Handles all financial transactions for the organization
  • Serves as internal auditor for the organization

Admin Manager

  • Responsible for personnel issues
  • Handle staff recruitment, transfers, disengagement
  • Handle staff performance appraisal and promotions
  • Handle staff welfare and liaise with labour union

Marketing Manager

  • Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
  • Model demographic information and analyse the volumes of transactional data generated by customer purchases
  • Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
  • Tasked with supervising implementation, advocate for the customer’s needs, and communicate with customers
  • Documents all customer contact and information
  • Represents the DBS in strategic meetings
  • Helps increase sales and growth for the DBS

Audit Manager

  • Ensure compliance with company’s controls
  • Provide independent assurance that an organization’s risk management, governance and internal control processes are operating effectively.
  • Provide regular evaluation and appraisals of internal control.

Store manager

  • Maintains receiving, warehousing, and distribution operations by initiating, coordinating, and enforcing program, operational, and personnel policies and procedures
  • Controls inventory levels by conducting physical counts, reconciling with data storage system.
  • Maintains physical condition of warehouse by planning and implementing new design layouts; inspecting equipment; issuing work orders for repair and requisitions for replacement
  • Completes warehouse operational requirements by scheduling and assigning employees
  • Maintains warehouse staff by recruiting, selecting, orienting, and training employees
  • Contributes to team effort by accomplishing related results as needed

Human resource (work force) required for Production Process is as follows:

  • Production Supervisor
  • Quality Control officers
  • Production Assistant/Operators
  • Factory Hands

6. SWOT Analysis

At Emeka and Sons™ Yam Flour Production Company, Inc., we were able to take stock of our strengths, our weakness, our opportunities and the threats that we are likely going to be exposed in the industry. This is to get us ready for the competition ahead and how best to tackle it. Summarized below is the result of our SWOT Analysis:

Strengths

  • Availability and easy accessibility to raw-materials
  • Access to cheap labour
  • Thorough knowledge of target market and their peculiar needs
  • The organization structure shall be function-based and each employee shall have a clearly defined strategy and goal plan.

Weakness

  • The business is a start-up and the future is always uncertain for most start-up companies
  • The initial stages of the business requires an enormous amount of investment

Opportunities

  • The yam processing food production industry is still untapped
  • Fast growing middle class population within Nigeria
  • Huge population of Nigerians living abroad

Threats

  • This being a new entity there is a threat from new business entrants
  • Cheap imitation instant pounded yam flooding the market
  • Non-compliance with strict NAFDAC regulations on production
  • There is a threat of other more established companies starting this line of business thus leading to stiff competition that the company might not be able to cope with.

7. Market Analysis

  • Market Trend

There are no reliable statistics to help in determining national demand for processed yam products. Statistics obtained from Federal Ministry of Agriculture only gave the annual production of yam in Nigeria. The Minister for State, Federal Ministry of Agriculture, Senator Heineken Lokpobiri, said, “About 48 million tonnes of yam tubers are produced annually in West African sub-region on 4 million hectares of land.

Nigeria alone produces 36million tonnes on 3 million hectares of land annually accounting for 68 percent of global production. Meanwhile, the national demand for yam flour can be derived using some basic assumptions. For instance, the food-processing group of Lagos chamber of Commerce and Industry (LCCI) in a seminar held in 2015 projected that at least one person in every six families eat pounded yam daily in Nigeria.

The population of Nigeria is estimated to be 180 million. Assuming that a family consists of six persons (father, mother and four children) then there are approximately 30million families in Nigeria. We can comfortably assume therefore that about 5 million people eat pounded yam daily in Nigeria.

An average daily consumption per person is 150gm; this is why most packaging is 900gm per pack for a family consumption. The national demand could be estimated therefore, to be 750 tons per day, excluding production meant for export.

8. Our Target Market

Growth of the middle class in modern Nigeria has fuelled the growing health awareness of the need for hygienically well-packaged and prepared foods. These coupled with the geometrically exploding population and the continued rural-urban drift is expected to fuel the demand for well-packaged foodstuffs especially instant-pounded yam flour, a staple food in the country.

Yam flour is one of the food items that defy socio-economic class, religious and ethnic boundaries; it is eaten daily in one of every six families in the country. In recent times, due to the numerous products {yam chips, pellets, starch} that can be processed from yam tubers, and the growing need for hygienically well packaged ready to use food product by the growing middle class, there is a gap in the supply of instant pounded yam flour in Nigeria.

This insinuates a shift in the demand-supply equilibrium in favour of instant-pounded yam flour producers and other yam related product makers. The Demand-supply gap has been identified to continue to expand as the population of the country that is estimated to be 180 Million continues to grow at an average of 3.5 percent per annum.

In addition, the rural – urban drift in Nigeria would help to deepen the market for instant-pounded yam flour. Our ideal consumers are those who drive the various activities in the supply chain. In addition, especially, it is important to note that prices are fixed based on the readiness of the consumer to pay. This is often determined by the location and product specification.

We believe that by creating good supply channels, we can comfortably increase sales by more than N3, 000,000 over three years while maintaining a gross margin of 80 percent. Through a philosophy of “nothing but the best” regarding both product and service, we plan to make sure our yams and every other product produced in our facility remains exceptional in the Nigerian market.

Although price may be a factor when competing against other brands selling processed yam products, the same consumers who are willing to pay a good amount for easy chops are already conscious of a better quality product. We strongly believe they will be equally as willing to spend a little extra for an extraordinary food produced and processed to meet their varying needs.

We also believe that the comfort factor that we will be offering plays an important role in consumer decision about our business. Our goal is to ensure that our brand and staff excel at being warm and friendly. We will use the highest quality products; sometimes paring the ordinary with the exotic, but we will always present our products in an unintimidating manner.

9. SALES AND MARKETING STRATEGY

Our marketing plan at Emeka and Sons™ Yam Flour Production Company, Inc. will centre on educating our target audience and subsequent word-of-mouth. We plan to make our location known for its unique buying experience as well as a superior yam flour production.

We plan to reach our clients through fliers, newspaper advertisements and special holiday promotions. Our business location will also play a very important role in marketing and promotion. We plan to target progressive and generally well-educated and affluent consumers who are interested in trying new products and experiences and are dissatisfied with the limited selection and lack of solid and quality goods seen in Africa.

Our major marketing objective is to sell the company as well as the product. Just as KFC is known for its great chickens, Emeka and Sons™ Yam Flour Production Company, Inc. will come to be known for its well-processed yam flours.

10. Sales Forecast

Our Sales Forecast at Emeka and Sons™ Yam Flour Production Company, Inc. reflects modest estimates for the first year of operation beginning in January 2022. After we must have established our facility as the number one place to buy yam flour, we plan to project aggressive sales increase for the following years. For our second year of operation, we estimate sales increase of 30 percent and of 50 percent in the third year

At Emeka and Sons™ Yam Flour Production Company, Inc., we are planning a 15 percent increase in quarterly marketing fee each of the two following years while keeping costs constant. Note that our cost of sales is based on an average yam cost of 30 percent for single purchase and 20 percent for bulk purchase.

We also project a consistent product cost percentage of these amounts for the following two years. Keeping product costs low while sales increase is very crucial to the success and profitability of Emeka and Sons™ Yam Flour Production Company, Inc.

We estimate that our total first year sales should reach N671, 087. Our second year will see sales increase to N2, 562,521. The third year, with the addition of such a significant number of outlets, we will see sales increase to N3, 881,752.

11. Publicity and Advertising Strategy

We observed that new entrants into the market usually employ one of the following strategies.

  • The Product Range Strategy

The product should compete favourably with the existing brands. It should also be able to satisfy customers’ demands and fall within the quality brands in the market. However, it is necessary we create a niche for the brand even when the same technology is being used in the processing.

Good pricing policy allows the product obtain the necessary market share in terms of volume. The company must be focused in determining whether the pricing policy is based on costs push, or market pull or combination of the two.

  • Promotional Strategy

We will promote sales using various means including granting of credit facilities, bulk discount, product launching, and attractive packaging. In relation to sales promotion, packaging would be designed to create a favourable product image and establish corporate identity. Packaging also establishes the products‟ differences in case of narrowly differentiated products. It also offers protection at all stages of distribution.

  • Distribution Strategy

This is a strategy to get the products to customers without much inconvenience to customers and at a reasonable cost to the company. The distribution channels could be any of the following:-

  • Directly to the ultimate consumers
  • Directly to the retailer who finally sells to the ultimate consumers.
  • Direct sales through the wholesaler or agent
  • A combination of any of these alternatives

Sources of Income

At Emeka and Sons™ Yam Flour Production Company, Inc., we hope to earn income and profits by offering Nigerians different products from our yam flour production. We have made sure our products will remain unique and rich and we believe our exceptional customer service will set us apart in our business location.

Our plan is to be profitable within the first year of operation. We also plan reinvest in the company and expand to three more facilities across the country by the third year.

12. Our Pricing Strategy

Our business goal is to increase profits while also offering our clients the best products and services there is in our line of business. We have made plans to ensure our pricing will be comparable to the competition in the market, but with the value-added feature of immediate and quality products.

  • Payment Options

Our plan at Emeka and Sons™ Yam Flour Production Company, Inc. is to create payment policy that will favour our clients. Our clients are the baseline of our business and we plan to make every process easy and accessible to them. We understand greatly that different people prefer different payment options as it suits them. Here are the payment options that we will make available to our clients:

  • Payment by cash
  • Payment via Point of Sale (POS) Machine
  • Payment via online bank transfer (online payment portal)
  • Payment via Mobile money

We have taken our time to align with numerous banking and payment platforms that will help us achieve our plans with little or no hitches.

13. Startup Expenditure (Budget)

Our startup costs depend on important assumptions. For instance, we assume a slow-growth economy, without major recession. We hope there are no changes in technology to make products immediately obsolete. We have done our research and have decided on the various places we want to spend our startup capital, and they include:

  • Land and Building – N999,400
  • Plant & Equipment – N300,000
  • Generators – N150,000
  • Other Depreciable Assets -N330,000
  • Other Facility -N108,000
  • Pre-operational- N104,000
  • Working Capital -N333,600

Going by the report from our research and feasibility studies, we will need about N2, 500,000 to start Emeka and Sons™ Yam Flour Production Company, Inc.

Generating Funding/Startup Capital for Emeka and Sons™ Yam Flour Production Company, Inc.

At Emeka and Sons™ Yam Flour Production Company, Inc., we hold true to our vision of bringing a new concept with an old-fashioned feel in order to become the number one in our industry. Our founding partners are experts in the food industry and we trust in their abilities to lead Emeka and Sons™ Yam Flour Production Company, Inc. to its desired spot. We hope to raise our startup fund through the following ways:

  • Equity Capital
  • Loan or Venture Capital

14. Sustainability and Expansion Strategy

The raw material we will need at Emeka and Sons™ Yam Flour Production Company, Inc. is undoubtedly yam. In the production of yam flour, sometimes fresh yam is not used by some yam flour producers; instead they use yams that are about to spoil. They tend to get them at cheaper prices.

However, we at Emeka and Sons™ Yam Flour Production Company, Inc. plan to use fresh yam. Fresh yam is abundant in the Nigeria particularly in Benue, Enugu and Nassarawa States. It is estimated that a tuber of yam weighs between 8-10kg per piece. 500 kg of relatively large tubers when processed is reported to yield 150kg of finished product (instant-pounded yam flour).

In addition, the company will follow a systematic, scheduled approach, from setting overall cooperate objectives at the beginning of the year to rewarding employees at the end of the year. We will steadily offer staff trainings and enlightenment to grow the expertise and experience of our workforce. Below are the key objectives of our sustainability trainings and staff improvements:

Types of Training/Development Activities

  • Staff training/development activities at Emeka and Sons™ Yam Flour Production Company, Inc. can be employer- or employee initiated. In either case, has to be approved by the manager in charge of the department or above with additional endorsement from the Human Resources Department or the Chief Executive.
  • Employee-initiated training/development activities may include external programs that are organized by external training institutes or by the company.
  • Employer-initiated programs may take the form of offering sponsorship for employees to attend external programs or organizing such programs in-house.
  • Depending on the nature of needs and operational requirements, training/development programs may also be implemented as job induction, job rotation, on-the-job coaching, counselling, individual or group projects, and secondment.

Purpose

The main objective of training and development is to help develop key competencies that enable individuals to perform current or future jobs successfully. In this regard, all training and development programs organized by the Human Resources Department will be geared towards the following objectives:

  • Strengthening the job skills/knowledge of employees;
  • Improving operational efficiency and productivity; and or
  • Developing the potential of employees for maximizing mutual benefit

Policy

The basic policy in administering and implementing any type of training or development is in accordance with the strategic business objectives of the company. The Human Resources Department will work closely with Heads of Division/Department in assessing areas that require training and development support.

Checklist /Milestone

  • Business Name Availability Check: Completed
  • Business Incorporation: Completed
  • Opening of Corporate Bank Accounts: Completed
  • Opening Online Payment Platforms: Completed
  • Application and Obtaining Tax Payer’s ID: In Progress
  • Application for business license and permit: Completed
  • Purchase of Insurance for the Business: Completed
  • Conducting Feasibility Studies: Completed
  • Leasing, renovating and equipping our facility: Completed
  • Generating part of the startup capital from the founder: Completed
  • Applications for Loan from our Bankers: In Progress
  • Writing of Business Plan: Completed
  • Drafting of Employee’s Handbook: Completed
  • Drafting of Contract Documents: In Progress
  • Design of The Company’s Logo: Completed
  • Printing of Packaging and Promotional Materials: Completed
  • Recruitment of employees: In Progress
  • Purchase of software applications, furniture, office equipment, electronic appliances and facility facelift: In progress
  • Creating Official Website for the Company: In Progress
  • Creating Awareness for the business (Business PR): In Progress
  • Health and Safety and Fire Safety Arrangement: In Progress
  • Establishing business relationship with banks, financial lending institutions, vendors and key players in the industry: In Progress
Joy Nwokoro