Economic Feasibility Study on Sitting of Soap Plant in the South Eastern Nigeria

Abstract

The success of the various governmental sustainable development goals (SDGs) are hinged in the level of development and robustness of the industries in such countries. Currently, scores of industries are winding up thereby creating unemployment, social insecurity, and poor standard of living. Lack of understanding of the requirements for running these industries coupled with over reliance on petroleum powered economy have been identified as the major cause of the above problem. Therefore, this feasibility study was undertaken using market and financial analysis as indices to determine the viability of soap production enterprise in the south eastern part of Nigeria.   Through the analysis of raw material, competitors, labour cost of infrastructure, overhead, annual maintenance, depreciation and cost of production, computation of yearly repayment amount, amortization schedule and  profit and loss estimation, an annual gross operating income of N1,427,802,000.00, annual gross operating expense of  N26,158,000.00, annual cost of production of N5,090,052,000.00 were realized with the worth of the project  being N126,651,300.00. The estimated net annual profit of N981,151,030.00 shows that the enterprise would pay off its cost of project after five years with justification of external funding. The project of establishing soap industries in the south eastern part of Nigeria is potentially profitable, feasible, viable and projected to have a healthy cash flow and viable long term.

Keywords: Soap, Feasibility study, South East Nigeria, Profitability, Viability