In 2008, it was estimated that the granite chipping demand in southwestern Nigeria was about 24.2 million tons while the total production was about 18 million tons leaving a supply gap of 6.2 million tons. This translates to an annual market size of over N48 billion
The supply gap has been identified to continue to expand as construction activities in the region continue to grow at a faster rate than the increase in production of granites. According to The Netherlands Development Finance Company (FMO) Nigeria’s housing deficit to date is 17 million housing units on a total population of 140 million with virtually no organized mortgage market.
In addition, infrastructural development particularly with the Federal Government commitment is expected to further expand demand for granite aggregates which are a major input in the construction industry.
For example, the Lagos – Ibadan expressway modernization and expansion project awarded to Bi-Courtney at a cost of N89.5 billion ($610million) is expected to offer an immediate market opportunity for the investment.
The major commercial and economic nerve centers around the project site are Lagos, Ibadan, Abeokuta, Sagamu etc.
Foraminifera Quarry will process rocks into granites aggregates including stones and sand dust. The stones output will be in variety of sizes ranging from ? inch to less than ? inch (stones) and are rich in quartz and K-feldspar, all of which are standard sizes in the construction industry. The output are not subject to expiry timelines and do not require any raw material for production other than the installed machines and labour that is available in abundance.
Current Business Position
The planning and development of Foraminifera Quarry has been on going for about 9 months. Research has been carried out to analyze the market and the rock deposit on the quarry site. The site has over 12 million tons of rock deposit that will last over 40 years assuming the plant operates at maximum capacity. A rental of N35 million has been agreed with the land owners for an initial period of 10 years. Equipment supply has been negotiated with Shanghai Zenith and prices have been agreed.
Foraminifera expects to generate N361,800,000 in net revenues within the first year of operation at a conservative rate of 50% capacity utilization based on sale of granite stones and sand dust. Revenues and earnings are expected to increase by an average of 19% running into the third year within the capacity of the current plant installations. Beyond year 3, capacity expansion will be considered subject to the dictates of the market.
Foraminifera is currently seeking for N114,469,250 to cover the cost of the plant and initial working capital of the company. We have provided a detailed breakdown of the application of this fund in the Finance section of this document.
The longest lead item is the delivery and installation of the plant which would take approximately 150 days. In essence operation is expected to start within 180 days of availability of funds. Contents
1. EXECUTIVE SUMMARY
Current Business Position
2. BUSINESS DESCRIPTION
4. BUSINESS STRATEGY
Critical Success Factors
5. ORGANIZATIONAL & OPERATING MODEL
Strategic Business Unit
Strategic Management Unit
6. FINANCIAL PLAN