Investing In industrial Ethanol production

Ethanol (industrial alcohol) has wide industrial use and as such the demand is very high. This has put pressure on local end-users who depend on import to sustain their production. It is worthy of note to know that Nigerians can produce highly concentrated and more internationally acceptable ethanol because the raw materials are available in large quantities.

Major Raw Materials
Apart from cassava, other sources of raw materials are palm wine, maize, potato, molasses, sawdust, yam tubers, among others. All these are abundant in the country.

Required Machinery And Equipment
The required components can also be got locally. These include, filtration unit (distillation columns), hammer mill, mixer, fermentation tanks, stirrers, plastic pumps, laboratory quality control units, pasteuriser, filling and corking.The extent of use of some of these items depends on the nature of raw material.

Production Processes
The production process is simple, depending on the nature of the raw materials. For cassava tubers, relevant details from washing, peeling, cutting and drying, to producing tapioca/chips with about 90 per cent starch content could be made available to the investor(s). One tone of cassava yields between 400-600 litres of alcohol, while palm-wine yields between 128-140 liters of ethanol.

Market Potentials
Despite the huge consumption of ethanol within the country and the West African sub-region, companies producing this chemical are still not meeting demand. About 90 per cent of local consumption is still imported. An investment in this direction will certainly make good economic sense when viewed from the angles of the already awaiting industries to buy the chemical. These industries include:
a). Alcoholic/ Beverages Industries: The many gin, brandy, whisky, wine, among other distillers make use of ethanol in large quantities.
b). Surface Coating Industries: Paint makers consume a lot of ethanol for the production of certain paints, thinners, adhesives and others.
c). Cosmetics Production: The cosmetic industries find ethanol useful in the production of perfumes, dyes, after-shave lotions, and others.
d). Pharmaceutical Companies: Ethanol is used for making Over-The-Counter (OTC) drugs such as dermatological cream, methylated spirit, some syrups and mixtures.
e). As Preservatives: Biological specimens are preserved in laboratories using ethanol.
f). As Fuel: Ethanol is used as fuel for lamps and stoves, as well as for flaming in hotels and foundries where soot is not needed. Ethanol has been used and is still being used as substitute to petrol in countries such as Brazil, among others.
g). Other Uses: In laundry and dry cleaning, ethanol remains a good antifreeze for automatic radiation. It is also raw material for making resins, acetic acid, chloroform, among others.

This product is in very high demand across the globe and the prize is also very competitive.

Suggested Take Off Capital
The project could take off with N20.55m, depending on location and other factors of production.

Investment Analysis
Market survey shows that profit after tax in the first two years will be in the region of N3.9m and might rise to N11.6m in the fifth year. Net cash flow in the first year is N15, 694m and might also rise to N34.799m in the fifth year of operation. The return on investment is 94 per cent under one year of operation.
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