Sample Business Plan: Commercial Maize Farm and Processing Mill in Nigeria

In this sample business plan on setting up an integrated commercial maize farm and processing mill in Nigeria we are going to be looking at whether or not, farming maize for processing is a lucrative business and important issues that affect the success or otherwise of such a business in Nigeria.

What is Commercial Maize Farming?

In a nutshell, commercial maize farming is usually the cultivation of maize on sizeable farmlands exceeding 5 hectares using mainly modern farming practices including agronomic practices, mechanized farming, improved farming inputs, marketing practices and irrigation (to name a few). People engaged in commercial maize farming are typically trying to produce large quantities of maize for onward sale either to factories, or other processing mills rather than trying to sell it directly to middlemen.

What is Maize Processing?

Maize processing is the conversion of harvested maize crop from its natural form into semi commercial and edible forms. The processing of maize can include; conversion of maize cereals into flour for baking bread, flakes (breakfast cereal),

How profitable is maize farming and milling in Nigeria?

Maize farming is a very profitable business to do with returns as much as 170% per farming season provided important variables don’t affect post-harvest sales. The profit margin usually doesn’t fall below 60% provided standard modern farming practices are used throughout the farming season. Maize milling on the other hand

Overview of the Maize Crop

Crop type	Cereal
Price per ton	130,000 to 150,000 depending on season
Farming Seasons	March/April (early maize) and June/July (late maize)
Uses	Staple food, animal feeds, corn flakes, flour etc
Types	Yellow and white maize
Typical investment	320,000 naira per hectare
Return on investment	60 to 170% per farming season

Uses of maize

Maize or as is more commonly called corn (botanical name: Z-mays) is the most commonly grown crop in Nigeria after cassava. It is highly nutritious containing carbohydrates, proteins and vitamins. The maize crop has many uses from edible staple meals such as; Pap, Tuwo and even boiled or roasted and eaten directly. Maize is also used in preparing commercial and industrial products such as in the production of corn flakes, syrups, flour, brewing of non-alcoholic beverages, organic manure and production of roughages/forage for ruminant animals. As a result of these diverse uses, a cattle ranch or poultry farm can also operate a maize crop farm as part of an integrated farming venture to maximize yields and profits.

Read this article: Cassava Processing Business Plan in Nigeria

Market Situation of Maize in Nigeria

The Maize crop is usually sold in bags of 75kg or 50kg in open air markets. As of December 2020, Nigeria produced more than 8 million tons of maize per annum which is less than the actual 11 million tons of maize consumed in 2019. What this means is that local demand for maize exceeds supply level. That is a positive sign for maize farmers – they can easily sell their produce. The reality though is that is rarely the case as the middlemen traders deliberately frustrate the marketing aspect of maize production which makes farmers earn less than they deserve and the end users pay more than they should.

Despite this challenge however, maize cultivation and marketing are still lucrative for savvy farmers who know how to bypass middlemen. The industrial demand for maize is at least 4 million tons per annum – the main buyers are breweries, food processing companies and feed mills. That is an aspect of the

 

Consumption level	11.8 million metric tons
Production level	8 to 10 million metric tons
Processing and industrial demand	Between 45 and 50%
Price of Maize per ton	Varies from 130,000 to 180,000 naira per ton
Market trends	Growing interests from local maize

 

For more information about market opportunities and insights into maize production and marketing in Nigeria do send me an email to: paulonwueme@gmail.com or for a marketing plan or research.

Opportunities for Maize Production

Maize consumption in Nigeria has historically been on the rise as far back as 1960. Year on year increase in demand for maize has varied from as little as below 1% to as much as 16.7% recorded in 2014. The reasons for this consistent increase in sales (demand from consumers) have varied from rising population, growing middle class, rapid urbanization and ban on importation of food crops.

 

Since maize is produced in Nigeria is only sold locally and there is insufficient supply for maize, it is therefore a highly demanded crop. As a matter of fact, there is a shortfall of over 1.9 million metric tons from the supply end.

 

Urbanization in Nigeria is playing a huge role in driving sales for maize products. Locally maize is processed into pap and custard (also sweet corn and corn flakes) which are popular on the menu of many cities and suburban towns in Nigeria. The growing culture of a man, wife, kids and maid residing in a rented apartment drives home the point about maize being a staple meal.

 

It has also high demand from the industrial end. Local breweries and food companies order for large quantities of maize to process into various drinks and beverages which are then sold to the local market. How about the companies which produce animal feed for poultry, pigs and ruminants? There are more than 900 million poultry animals in Nigeria and at least 12 million cattle – that is a very large market for feed mills.

Government economic policies and programs are currently in favour of local maize production. There are agricultural policies which encourage local farmers in terms of being able to access improved farming inputs, farming practices, access to soft loans and marketing systems that enable farmers readily reach their intended sales and income goals.

Added to this is the profit margin on maize production. The total costs for planting and harvesting maize per farming season is 320,000 naira per hectare whereas the revenue potential can vary from 420,000 naira to over 600,000 naira per hectare – your profit would depend on the number of hectares under cultivation and number of planting seasons per annum.

Challenges of Maize Production

Maize farming also its challenges, for instance there is the problem of insect pests and nematodes which can severely ravage a planting season leading to losses for the farmers. There are also problems such as; nomadic cattle herders whose animals often stray into people’s farms. Maize farmers will also contend with disease infestations, high cost or scarcity of farming inputs and strong competition. Also irrigation farming which is a crucial success factor is difficult to achieve for most farmers. 

How much is required to start a Maize Farming and Processing Mill in Nigeria

So far I have been focusing on mostly maize farming but there is the processing end to it. Maize processing is a highly profitable venture when it is part of an integrated system. Maize can be processed into powder, flour or starch. The stalk and leaves can be processed into forage or silage but that will depend on the technical and financial readiness of the investor. Details about investment cost for maize processing is available on request. For the farming aspect, an investment of 320,000 naira per hectare of land is a sufficient startup amount if one is looking to operate optimally – at ideal production level, profit margin and crop yield. Most of that investment would go into inputs.

What is the return on investment for maize production and processing?

That would depend on various factors but an optimally run maize farm also engaging in processing of maize. A minimum of 60% return on investment per planting season to as much as 170% (actually even more if the best crop yield can be achieved) is a feasible range to aim for.

Paul Onwueme is a professional Business Plan writer since February 2014, has achieved respectable results with his business plan writing service with several of his clients securing funding and leaving positive feedback about his writing service. You can connect with him via phone: 0803 206 4106 or email: paulonwueme@gmail.com