Investment Analysis For The Establishment Of Spheroidal Graphite Iron Plant In Nigeria
Oyelaran O.Ajani, Ocheri Cyril, Yau, Y. Tudunwada
Index Terms: investment, profitability, Spheroidal graphite iron, Analysis, Plant.
Abstract: An investment analysis for the establishment of Spheroidal Graphite Iron (SGI) plant in Nigeria was conducted to assess the viability of setting up a plant. Spheroidal Graphite Iron outperforms grey cast iron due to possession of the following attributes: improved strength, ductility toughness and hot work ability, with grades guarantying more than 18% elongation or high strength, with tensile strength exceeding 825 MPA . The analysis was done for a manufacturing plant with an installed capacity of 300 tonnes of SGI per annum. As part of the methodology, a market analysis, the required materials, equipment, and human resource requirements are presented. The financial implication, financial and breakeven analyses were carried out. The market analysis substantiates a ready market for SGI and the required total capital investment for the plant is approximately, ₦38 million. The estimated annual profit is approximately ₦ 29 million. The financial analysis shows that the investment is a profitable venture with a good profitability ratio and rate of return. The payback period for the venture is less than 2 years.
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