A feasibility study for the establishment of an industrial shea nut processing facility in Wa

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This feasibility study was conducted by visiting three established medium to large scale processing facilities in the shea sector to find out the factors that led to the establishment of those facilities there. An economic and financial analysis of the small, medium and large scale facilities was conducted to determine the most suitable and profitable option worth investing. Finally, the research also investigated the impact of such a facility to the conservation of the most important economic tree in the area.The study was conducted to ascertain the possibility of establishing an industrial Shea processing facility in Wa. A cost-benefit analysis was performed on four different scales of production (small, medium–semi mechanized, medium-mechanized and large scale) to determine the most viable option to establish in the area. Using a Bank of Ghana (BOG) one year treasury bills discount rate of 12.65%, the net present value (NPV), benefit cost ratio (BCR) and internal rate of returns (IRR) of the four projects were determined. The NPV for the small, medium-semi mechanized, medium mechanized and large scales were GH¢ 192,125.18; GH¢ -29,080,290.00; GH¢ -72,355,077.98 and GH¢ 206,980,803.10 respectively. The BCR were 1.05; 0.80; 0.89 and 2.75 respectively, while the IRR were 22%, 20%, 31% and 39% respectively. Ranking the projects according to the results obtained, the large-scale facility is the most viable option to invest in with a very high NPV of GH¢ 20,690,803.10, BCR of 2.75 and IRR of 39%. All these values satisfy the decision criteria for selecting viable projects. The small scale local processors ranked second and also proved viable. But the remaining two projects (medium-semi mechanized and medium-mechanized) had two of the analyzed values less than the acceptable values and should be rejected. Other factors affecting the success of the project such as social, operational and biological also indicated that such a project is not only feasible but sustainable as it will raise the standard of living of the members of the community and hence be acceptable. Furthermore, the project will also lead to the protection of the shea tree.
A thesis submitted to the Board of Postgraduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi, in partial fulfilment of the requirements for the award of the Degree of Master of Science in Agricultural Engineering, 2011