Flour Mill Business Plan Sample – The flour mill will be a locally-owned company focused on stone-ground flour production. We will offer specialty heritage and ancient grains that are nutrient dense and preferred by many health-conscious consumers. The mill will differentiate itself through its small-batch stone grinding methods, specialty grain varieties, and focus on local communities.
Kachi Mills is a modern standard flour mill based in Lagos state, Nigeria.
We produce edible flours used for staple foods in Nigeria. Our flour types include yam flour, corn flour, and wheat flour.
We source raw materials directly from the best farms, produce our flours following industry standards of quality, and package for delivery.
The brand name for our product packages in Kachmills. Kachmills yam flour, Kachmills wheat flour, and Kachmills corn flour.
We are focused on producing the finest flours for direct consumption.
Not only are our production facilities certified by the NAFDAC, our flour quality has been tested and satisfactorily passed the tests of the SON.
We are targeting specific markets with our range of products and our pricing is very competitive.
We are looking to keep improving our product quality based on consumer feedback, and making our production process more efficient.
Our products are priced according to category and packaging.
Our flours are packaged in 600g and 10kg bags.
The corn flour is priced at 400 Naira for the 600g packaging and 5,500 for the 10kg packaging.
The yam flour is priced at 350 Naira for the 600g packaging and 4,800 Naira for the 10kg packaging.
The wheat flour is priced at 800 Naira for the 600g packaging and 7,500 for the 10kg packaging.
We offer discounts on all these packages for wholesale buyers and distributors in our network.
Business Model & Profitability
Our business model involves large scale production, packaging and distribution of our range of flour products via our distribution network in and around Lagos state.
We also have partnerships with retail shops and supermarkets that market our products on their shelves.
Expected Annual Customers
Through our distribution network, we expect to reach 5,000 retail shops annually.
But this number can be boosted via marketing campaigns and promos which are run directly with retail customers in areas where our distribution hasn’t covered.
Estimated Annual Revenue
We expect to distribute at least 30 bags of our large package and 300 packs of our smaller package annually to 5,000 retail shops.
That means we could make around 1.5 billion Naira annually in wholesale revenue.
Production & Distribution Cost
Our production costs include sourcing of raw materials, branded packaging materials, power supply, distribution, wages and other production costs.
Ideally, we spend about 2,500 Naira to produce a bag of flour.
Currently, our profit margin stands at 38% but we are looking to scale that up to about 55% once we improve on our production efficiency.
Kachi Mills is owned by Kachi Solomon, who is currently the CEO of the business.
He has a background in agric economics and grew up in a family that owned a flour processing mill.
He works with Hazzan Mar who is the quality control manager, Chioma Ude the resource manager, Jane Menno the business development manager, and James Gigi the distribution coordinator.
The flour mill business was inherited by Kachi Solomon from his family in 2012, and has undergone major rebranding since then.
With a 5 million loan facility, the company acquired new flour mill machines a company distribution vehicle, and new staff.
In 2018, we also launched our 600g flour packaging which is aimed at meeting demands for retail customers.
We have since grown our wholesale customer base from just under 1,000 to over 5,000.
Market Size/Target Audience
According to World-grain, Nigeria’s 3.2-million-tonne flour market is valued at $2 billion, and growing at 3.5% a year.
We expect Lagos to have at least 10% share of that market, which would be valued at $200 million.
We are mostly looking to address this market via capturing processed food retailers and wholesalers in and around Lagos.
If we can address about 10% of the Lagos market, we’ll be able to make $20 million per year.
Our marketing plan involves reaching out to consumers, retailers, and wholesalers, and trying to address their needs.
The first plan is to deliver exceptional quality with all our flour products in order to meet the demands of our customers.
Also, we are incorprating a reward program that helps wholesalers and retailers make more profit if they sell more of our products over that of our competitors.
Strength: Our strength lies in having a superior product that is easily the most affordable in the market.
Weakness: Our brand is still relatively unknown with products sold in only a section of the country.
Opportunity: We have a plan to expand our customer base by reaching markets in other states in Nigeria. With a few additional distributors we can achieve this.
Threat: We could be heading into a price war with any of our big competitors if they niche down to our flour categories.
Our plan right now is to grow big as fast as possible.
We are looking to add more packaging options to our range of products and also increase our distributorship.
To achieve this, we are already making plans to expand our production facility while acquiring warehousing in strategic locations around the country.
We require funding of 150 million Naira to help us quickly scale these plans in order to achieve our business and financial goals.
We plan to triple our production capacity in the next five years, which would help us to at least double our revenue.
We are also looking at outsourcing our packaging through industry partnerships to help us speed our distribution and compete favorably in the market.