TAN Sunflower Products
Sunflower seed (Helianthus annuus L) is the source of 62% of all edible oil produced in Tanzania. The annual production of sunflower seed ranged between 80,000 and 500,000 tons from 2001 to 2004, with a mean of 290,000 tons. From this seed, approximately 100 tons of oil were extracted. Tanzania, however is a net importer of vegetable oil. The total oil requirement for 2004 was estimated to be 195,000 tons.
At an annual growth rate of 2% the oil requirement for 2006 was approximately 237,000 tons, of which an estimated 83,000 tons was to be imported. If locally produced sunflower oil can substitute the imported oil, 493,000 tons of sunflower seed will be needed to satisfy the total oil demand, which will require an area of 448,000 to 500,000 ha of sunflower to be grown annually.
Oil cake is a byproduct of sunflower oil extraction and is a source of protein for animal feed blends. Tanzanian sunflower oil cake, however, is considered to be of relatively poor quality due to high crude fiber content. The value of sunflower oil cake is equivalent to 62% of the value of soybean oil cake. The relatively poor quality of sunflower oil cake restricts the amount of that can be included in feed blends for poultry and pigs.
The estimated consumption of sunflower oil cake by the animal feed manufacturers during 2004 was 132,000 tons produced from 330,000 tons of seed. The demand for sunflower seed is limited by the oil cake quality rather than the demand for oil, which is the main product of the seed.
Tanzania experiences a shortage of high quality plant protein for supply in the demand of the animal feed industry. As a result 163,000 tons of oil cake (mainly soybean) was imported annually from 2003 to 2004 to supplement the local production of 127,000 tons, produced mainly from sunflower. The important requirement has since risen to 305,257 tons for 2006. The annual cost of imported oils has exceeded Tshs 5 billion since 2003, which is approximately twice the amount of money local sunflower farmers receive for their sunflower seed.
The feed value of sunflower oil cake will compare well with that of soybean oil cake if it can be improved through more efficient dehulling. The demand for sunflower cake would be 544,331 tons if the crude fibre content can be kept below 14% and the protein above 40%. Approximately 1.3 million tons of seed would satisfy the demand.
The number of sunflower crushers and refiners is only 500 in Tanzania with over thrice of arable land compared to 1,620 crushers in Kenya with less arable land. Though this project looks common in the country, the opportunity is still very high if proper marketing strategies will be implemented to convert the demand for imported edible oil to locally produced natural oil.
If the quality of the locally produced sunflower oil cake can be improved, the possibility of over production would diminish and the supply of oil and oil cake would be more in balance with the demand. This could lead to savings on imports of oil and probably also oil cake more sunflower oil cake could replace expensive imported protein sources.
Although oil content is the only seed quality parameter sometimes taken into account in trade of sunflower seed, higher quality oil cake may affect seed prices positively for the farmer. It is thus clear that improved sunflower oil cake quality would benefit farmers, the oil, soap making, and oil cake industry as well as the animal feed industry.
2.1 Industry overview:
TAN Sunflower Products is an agribusiness processing project targeting manufacturing of Sunflower oil and related products from sunflower seeds. The sunflower seeds are the main raw materials in the business and through a crushing or refining machine we are able to get edible oils and the by-products (sunflower seed cakes) remain to be used as manure and animal feed. The business has started operations in Korogwe district where there is a lot of arable land for sunflower farming but very few people are growing such a crop.
The business has been a source of new jobs and has attracted more stakeholders in the industry as it has highlighted a great economic opportunity in the area. The business is expected to extend to other areas in the country where sunflower farmers are abundant including but not limited to Morogoro, Dodoma, Arusha, Manyara, Singida and Shinyanga.
Initially, the project has installed a sunflower refinery machine or factory in Korogwe area to promote sunflower farming in the area and come up with oil and related products production, packing and selling. The project will not go into growing sunflowers in the fields, as a way to specialization and division of labour.
Korogwe district has been targeted because of its good climate that can produce sunflower seeds two to three times a year and still it is close to transportation infrastructure to big cities where the oil and related products are marketed and sold. The good land that can be used in the area without using fertilizers in another reason for the choice as all the farm products produced are purely organic or natural.
Natural or organic sunflower oil is now on the peak as its prices are rising due to a greater demand. Many people are changing from the imported edible oils to the locally refined oils as the local products are perceived to be better for health compared to the imported products. Many traders from European, Far East and American countries are now flocking in Tanzania to establish business links with local organic oil manufacturers.
Countries such as Turkey are famously known as number one for “in-flight catering services” and don’t have much certifications and restrictions in accepting products from our country. With this concept in mind, the demand for our organic products through Turkey –a gate way- can reach many customers in western countries.
With just a few months of its establishment, Tan Sunflower Products has come across Turkey importers of Sunflower seeds and crude oil who are seriously and desirously interested to build business contacts and establish a big collection center of the natural edible oils in Tanga and Dar es Salaam Habour for the purpose of exploiting the opportunity. Many sunflower cake buyers are also flocking in many regions of Tanzania from Kenya and Uganda.
With Global economic crisis, the edible oil industries in many foreign countries has shaken considerably. Therefore, the machinery for crushing and processing the sunflower seeds has also dropped by 20% as many industries abroad have closed. This is still a big opportunity for Tan Sunflower to establish a base using quality locally produced equipment from Innovative Technologies Solutions Limited with less cost and finally rise financially.
The President Hon Kikwete’s recent speech for rescuing the farm products industry, buyers and processors has been a big cerebration as the industry have receipted a big attraction from financier locally and internationally through a Government subsidy or guarantee to run such industries until the economy stabilizes.
The President’s speech has placed a great confidence to the financiers including local and international banks including Peoples Bank of Zanzibar, National Microfinance Bank, and organizations such as The Icon, Tanzania Private Sector Foundation and SIDO to finance the farm products business.
Therefore, there is a greater potential for this industry to expand every year –for Tan Sunflower, the sky is the limit!.
2.2 Company/ business description:
Vision statement for the company/ business
The Vision of Tan sunflower is to provide quality organic sunflower products at affordable prices.
Mission statement for the company/ business
Our mission is to manufacture and sell organic sunflower oil, sunflower cakes and related products within international standards, quality, package and convenience.
Values and objectives of the company/ business
To ensure that the farmers get the best prices for their sunflower seeds (fair price for any value)
To improve the quality and standards in manufacturing sunflower oils and related products certified by Tanzania Bureau of Standards (TBS), and Tanzania Food and Drugs Agency (TFDA), Export of Organic Products from Africa (EPOPA), TANCERT and later internationally recognized Standards including International Standards Organization (ISO).
To ensure creation of jobs for youth and gender balance for jobs created
To ensure Community Social Responsibility, environmental conservation and commitment in paying taxes, social security for workers, workmanship compensation and insurance.
2.3 Descriptions of products/services:
Tan Sunflower products manufactures markets and sells sunflower related products at a better quality and convenience using effective machinery with less production costs. The products include sunflower oil and sunflower cake.
When sunflower seeds prices goes down by 20%, there emerges an opportunity to start manufacturing bar soap and detergents from sunflower crude oils. Soap making is a very simple technology that combines sunflower crude oil and caustic soda that is available in Tanzania.
Bar soap is among the fast moving goods in the country as many households are using this kind of soap for washing and cleaning purposes. Soap and detergents making is a secondary project proposal that will be implemented by Tan Sunflower in a near future.
Oil Refinement Levels
Oils are generally grouped into two groups: unrefined and refined. Unrefined oils taste more like the substances they are made from, while refined oils are blander.
Unrefined Oils:
These oils are used as salad oils (warm salad dressings, marinades, and pasta sauces) or light cooking oils (light sautes and low heat baking). As a general rule, they should not be cooked at high temperatures. Unrefined oils are processed by cold-pressed and expeller-pressed methods. Unrefined oils carry with them the true bouquet of olives, corn, sesame seeds, peanuts, soybeans, safflower, or whatever plant was the oil's original home.
The strong flavors of unrefined oils can dominate whatever dish or baked good is made with them. Strong flavor is not always a drawback; and in some cases unrefined oils are used as flavoring agents.
Refined Oils:
These oils are used as medium cooking oils (225°F - 350°F), high cooking oils (350°F - 450°F), and deep-frying oils (greater than 450°F). If the oil is bland and pale, it is certain that it has been fully refined, bleached, and deodorized. In essence, refined oils have negligible flavor and aroma, which can be useful in delicately, flavored dishes.
Tan Sunflower cooking oil is now highly demanded because it is regarded by many people in the country as oil without cholesterol or oil from organic farming. Many people are now aware of the effects of cholesterol on their health, therefore the only way to avoid it is to use cooking oils without elements that could cause health problems. Sunflower cooking oil will carter for such a need to keep people with better health.
A litre of sunflower cooking oil which is double refined goes up to Tanzanian Shillings 2,500/- locally and 1,900/- for semi refined. In foreign markets such as Turkey the price goes up to United States Dollar (USD) 2.6/- for a litre of oil.
By-products from sunflower seeds including sunflower seed cakes can be used as animal feed or manure in the same farms where the sunflower is grown. The by-product is also a source of income for the same project recovering about 15-20% of the seeds cost. A kilogram of sunflower cake in local market goes as high as Tshs 100/- and for foreign markets fetches Tshs 150/- or USD 0.4/-
Tan Sunflower will also be engaged in exporting sunflower seeds abroad. Importers from Turkey have agreed to buy from Tan suflower at a price of USD 0.384 equal to Tsh 500/- per kilogram of sunflower seeds. A total of 1,000 tonnes will be exported costing Tshs 350,000 per tone Free on Board (FOB) making a profit of approximately USD 45,000 or Tshs 58,500,000/- per annum.
Farmers who have been growing sunflower but facing difficulties in transporting their produces to a far refining factory have now an advantage of processing their sunflower seeds through Tan Sunflower factory. A farmer is charged Tshs 30,000/- as a fee for crushing the seeds and the sunflower cake is been left as Tan sunflower product and the farmer parts with sunflower oil.
The market needs natural oils and sunflower oil is among the natural oils therefore the demand is so huge and it will grow from time to time.
2.4 Business/ company positioning
TAN Sunflower brands is always sold at reasonable prices, meet the consumers tastes for natural oils, better quality oils processed within high standards of hygiene and accuracy, better products packaging into plastic gallons and stainless tin cans. These products are suitable for people who care much for their health and middle income families.
The brand will be promoted to be accepted by people in all levels of income with health care reason as a strategy. Tan sunflower will soon be a registered trademark and formula, TBS and TFDA certified brand that will suit all people in the Tanzanian community.
2.5 Company/ business pricing strategy
Tan sunflower Costing Department calculates raw materials and production costs incurred during production of oils ranging from 75-85% and then a 15% profit margin is usually toped up to arrive to the selling price figure. The same method is used for the sunflower seed cakes.
Now, the market price for the 5 litres pack of sunflower oil is Tshs 12,500/- to Tshs 15,000/- for existing brands such as OKI, Masafi, Amani Sunflower Oil, Sunflower et cetera. As Tan Sunflower products will be made using a higher technology and better marketing strategies that serves time, manpower and financial resources, with time, we are assured of our prices to be a little bit lower as goods will be moving faster. Current price for Tan sunflower oil is Tshs 2,500/- per litre for local markets and USD 2.6/- per litre for foreign markets. Sunflower cakes are sold at Tshs 100/- per kilogram for local markets and Tshs 150/- per kilogram for foreign markets.
Table 1: List of Raw Materials, Products and By-products manufactured by Tan Sunflower Products
S/N Item Description Processing Cost (%) Products Local Price (Tshs) Products Foreign Price (USD)
1 Sunflower Seeds 45-58 500 0.384
2 Sunflower Cake 30 100 0.115
3 Cooking Oil 61-70 2,500 2.6
4 Bar Soap Detergents 50-65 1,000 per Bar -
3. PRODUCTION PLAN/ SERVICE DESCRIPTION
3.1 Production and operation processes
Tan Sunflower makes use of Kalambo Engineering Technologies, local experts located at Kibaha to manufacture the machine that will have a capacity of dehulling or crashing 500kg of seeds per hour. This is a very advanced technology and that means the plant can be able to process approximately six to ten tons of sunflower seed a day.
Kalambo Engineering dehuller feeds seeds onto the center of a horizontally rotating impeller fitted with outward directing blades or grooves. The seed is accelerated outward along the blades and collides with the static wall where the hull is cracked. The loose hulls are then separated from the dehulled kernels, partially dehulled seeds by passage through a system of beds containing aspirated screens, to produce the kernel rich-fraction.
Refinery process is later completed and sunflower oil is poured into different sized gallons ready for selling in local markets or even international markets. Tan Sunflower products have no additives or any external chemicals; they will always be pure natural products.
The Technology of Edible Oil Processing
Oil is extracted from a number of fruits, nuts and seeds for use in cooking and Soap making or as an ingredient in other foods such as baked or fried goods. Oil is a valuable product with universal demand, and the possible income from oil extraction is therefore often enough to justify the relatively high cost of setting up and running a small scale oil milling business. There are two things when considering the methods by which oil is extracted from a plant: the refinement level and the physical process used to extract the oil.
Extraction Processes
All oil extraction processes involve heating the oil in some way. However, temperatures over 300°F destroy the proteins and natural vitamin E in oils. Lower temperatures (in the 120°F to 160°F range) do not damage the oil significantly, but do reduce the yield, making good oils a little more expensive. It is essential to retain vitamin E in the oil as it prevents the oil from oxidizing. Oils with little vitamin E tend to go rancid quickly unless treated with antioxidant chemicals.
Expeller-Pressed:
These oils are obtained by squeezing the seed, grain, or fruit at pressures up to 15 tons per square inch. The higher the pressure, the more heat is generated. At extremely high pressures, the temperature can exceed 300°F.
Cold-Pressed:
The term cold pressed theoretically means that the oil is expeller-pressed at low temperatures. Olive oil, sesame oil, and peanut oil are really the only kinds that can be truly cold-pressed on any sort of large commercial scale. They are the only substances that will easily yield their oil by simple, low-intensity pressure, which does not generate a great deal of heat. True cold-pressed oils are prized. They contain minerals, phosphatides, and vitamin E and are high in trace nutrients.
Extracted:
Extracted oils are invariably subjected to some sort of applied heat during processing.
Chemical or Solvent Extraction:
The cheaper brands of oil (most regular commercial brands) generally use chemical solvents to extract the oil. The oil is separated from its food source with hexane or other petroleum solvents and then boiled to drive off the toxic solvents. The oil is next refined, bleached, and deodorized, which involves heating it to over 400°F.
The oil extracted this way still contains some undesirable solvent residues, while the amounts of many key nutrients (especially vitamin E) are significantly reduced. Antioxidants or preservatives such as BHA (butylated hydroxyanisole) or BHT (butylated hydroxytoluene) are then frequently added. The resulting product lacks flavor, aroma, pigments, and nutrients. All that can be said for such oil is that it has an extended shelf life, a clear, uniform color, and an oily texture.
Mechanical Extraction:
In order to get high quality edible oil, various processing techniques are used. The process of obtaining oil from seeds involves the separation of oil from oil-bearing material by mechanical means, chemical means, etc. A typical oil extraction process is as follows:
Storage
Cleaning
Dehulling
Grinding or rolling
Heating
Pressing oil cakes
Refining impurities
Purified Edible Oil
Description of sequence operations:
Storage:
The seeds, nuts, or plant tissue containing the oil must be properly stored and prepared for extraction to maintain the high quality of the final product. If the oil bearing material is dry, it must be stored so that it remains dry for optimal extraction and quality of the oil. If the oil bearing material is wet- plant tissue, it should be processed for oil extraction immediately after harvest so that the storage time is kept to a minimum. Oils in the presence of water deteriorate rapidly, forming free fatty acids and rancid off-flavors.
Cleaning:
After the oil-bearing material has been taken out from storage, the first step in preparing them for oil extraction is to clean them. Cleaning is done so that the oil is not contaminated with foreign materials and that the extraction process can proceed as efficiently as possible. During the process inspection of the seeds is carefully done to remove stones, sand, dirt and spoilt seeds. Dry screening technique is often used to remove all material that is over or under sized. Some times washing is also resorted to but it must be avoided, as the plant tissue will have to be dried at a later stage.
Dehulling:
During the process the outer seed coat of the oil seed is removed. A power-operated dehuller is generally used for the operation. Removal of the outer seed coat is necessary as it does not contain oil and inclusion of it in the unit operations makes the oil extraction process less efficient. Some seeds such as groundnut can be shelled by hand. Some other such as sunflower seeds, are usually hulled in machines. Still others, like safflower and colza, cannot be shelled.
Grinding or rolling:
Seed is not usually pressed whole, since oil extraction is more efficient if the seed is in smaller particles. Herein lies the relevance of the grinding process. Grinding is the process for reducing the particle size. Small motor powered hammer mills are used for the unit operation. Another alternate process used for reduction of particle size is rolling the oilseeds to produce flakes for oil extraction. Many large-scale commercial plants find this the most effective approach. With large oilseeds it may be necessary to grind the seed first, and then put the pieces through the flaking rollers.
Heating:
It is the final step for preparing the raw material for oil extraction. Heating leads to increased oil yield. Heating helps in killing those enzymes present in the plant tissue, which have a deteriorating effect on oil quality. Moreover, if oilseed cake is to be used for feed, heating is useful as it increases protein availability.
Pressing:
During processing, the conditioned oil seeds/ oil-bearing material is pressed using a lever press, hydraulic press or a mechanical expeller to remove the oil.
Refining:
The process is used when lower quality feed stock is used for oil extraction. It helps in removing undesirable cloudiness, color and flavor from the extracted oil. This has been further discussed in the next section.
Solvent Extraction:
For practical and economic reasons, hexane (C6H14) is the dominate extraction solvent for oil seeds. The solvent extraction process involves mixing the pre pressed seed with the solvent that can be dissolved in water. The solvent can also dissolve some unsaturated oils. The mixture is allowed to separate into two phases, similar to an oil and vinegar salad dressing. The top layer is purified oil. The bottom layer contains the solvent plus some of the unsaturated molecules. The layers are then separated. The solvent is then evaporated from the bottom layer and reused.
Oil Purification Methods
Crude fats and oils are obtained directly from the extraction of the oilseed. Crude fats and oils contain varying substances that may influence undesirable flavor, color, or keeping quality. These substances are removed through a series of processing steps. The purification processing can be divided into seven types:
1. Degumming
2. Refining
3. Bleaching
4. Deodorization
5. Fractionation
6. Hydrogenation and
7. Interesterification.
Degumming:
Some oils such as soybean oil have a treatment known as degumming. The bulk of certain phosphatides such as lecithin are separated through this operation. The processing consists of mixing the oil at 130-160 F with water or steam for 30 min. The gummy residue is dehydrated and the oil is then passed through centrifugal separators. Larger amounts of water or steam are used to prepare oil, which is more degummed.
Refining:
The process of refining reduces the free fatty acid, phospholipids, carbohydrates, or proteins. The most widely practiced form of refining method is an alkali treatment. By treatment of the fats and oils with an alkali solution, the free fatty acid converts into water-soluble soaps. Phospholipids carbohydrates and proteins also can be changed to water-soluble substances with hydration. After the alkali treatment, the fats and oils are washed with water to remove residual water-soluble soaps.
Bleaching:
The bleaching process is removing coloring materials, such as chlorophyll and carotene and purifying the fats and oils. The method is by adsorption of the color producing substances on an adsorbent material. Bentonite, silica gel and activated carbon are used as bleaching adsorbents
Deodorization:
Deodorization is a vacuum steam distillation process for the purpose of removing undesirable flavors and odors, mostly arising from oxidation, in fats and oils. Using steam under reduced pressure the volatile compounds are removed from fats and oils. Typical conditions approximate 250 C at 2.0 mm absolute pressure for 1-4 hr with strong steam sparging. The deodorization utilizes the differences in volatility between off-flavor and off-odor substances and the triglycerides.
Fractionation:
Fractionation is the removal of solids at a given temperature. There are three kinds of fractionation process such as crystallization, winterization, and pressing. Crystallization is the widespread technique. A mixture of trigrycerides is separated into different melting points based on solubility at selected temperature.
Next a small quantity of material is crystallized to avoid hazes of liquid fractions at refrigeration temperatures this process is called winterization. Many oils, including cottonseed and hydrogenated soybean oils, are winterized. Finally, pressing process is used to separate of liquid oil from solid fat. The process squeezes or presses the liquid oil. This process is used to produce hard butter
Hydrogenation:
In hydrogenation, hydrogen is added directly to react with unsaturated (double bonds) oil in the presence of nickel catalyst. The need for the hydrogenation is based on (1) converting liquid oils to the semi-solid forms and (2) increasing the oxidation and thermal stability of fats and oils. This process greatly influences the desired stability and properties of many edible oil products.
The hydrogenation process is easily controlled and can be stopped at any point. A gradual increase in the melting point of fat and oil is one of the advantages. If the double bonds are eliminated entirely with hydrogenation, the product is a hard brittle solid at room temperature. Shortening and margarine are typical examples
Interesterification:
Interesterification is a rearrangement or redistribution of the fatty acids on the glycerol. The fatty acids can be described in random or directed under some conditions. In addition, this process does not change the degree of unsaturation or the isomeric state of the fatty acids. For example, lard, in its natural state, has only good consistency for practical use within a narrow temperature range. Lard becomes easily either softer or firmer with slightly changes of temperature. The interesterification process reduces these problems.
3.2 Cost of products/ service development
• Kalambo Engineering machine has been bought for processing sunflower seed oil. The machine was bought at Tshs 8 million. The cost includes production process consultancy, installation of the machine, testing and training. The Kalambo engineers have already installed the machine and trained the users or workers initially.
• Some extra costs now arising include raw materials (50 tons costing Tshs 25million) packaging materials in terms of gallons and large reservoir of oils before selling. The gallons need to be labeled with Tan Sunflower labels and logo and we estimate that the gallon will cost Tshs 2,000/- (labeled) and 1,000 gallons needed costing a total of Tshs 2 million.
• Sunflower seed cakes also will need special packets or sacks that will cost Tshs 500 per 100 kg piece. A total of 4,000 sacks costing Tshs 2,000,000/- in total are needed initially.
3.3 Labor Requirements
Two Production technicians have been employed and trained to run the machine on daily basis. There is also Stores staff for packing and unpacking the sunflower bags from the field and also repacking the sunflower seed cakes into respective packaging, a Watchman for taking care of the project assets have also been employed.
The Chairman/Director will also work with the rest of the teams to make sure all programs run professionally and according to the arranged schedule. It is estimated that apart from the Manager all other employees will be paid a starting monthly salary of Tshs 100,000. The Manager will receive Tshs 200,000. In the second year, we expect the labor remuneration to double as the production will be more profitable running at full swing.
All employees are being prepared to register for a Social Security and Medical Insurance Schemes of their choice and contributions be made in time. They will all be covered with workmanship compensation incase they encounter any unexpected injury or bad event during production process. The factory will be equipped with all safety features and equipment to make sure employees works within safety standards all the time.
3.4 Expenses and Capital Requirements
Operating Expenses
Rent for Premise ….
Office for normal use/Cash office, machine room….
Accommodation …………………………. 3,600,000/-
Water and Electricity …………………………. 2,600,000/-
Transportation Cost …………………………. 2,400,000/-
Market Research &Consultancy ………………………… 2,000,000/-
Employee’s salaries and wages Tshs 100,000 per month for subordinates, Manager 200,000 per month:
Manager 2,400,000
Cashier 1,200,000
Storekeeper 1,200,000
Watchman/Security 1,200,000
Sales and Marketing Executive 1,200,000
Production Technicians 2,400,000 ………… 7,200,000/-
20,200,000/-
Capital Requirements
Cost of Machines and Installation …………………… 8,000,000/-
Cost of Goods
-Stock Purchases (Sunflower) …………………. 25,000,000/-
-Plastic for keeping oil,
-Sacks for sunflower storage, -Ropes …………………… 4,000,000/-
29,000,000
4. THE MARKET & COMPETITION
4.1 Customers
Tan sunflower local customers include individuals, Bakeries, schools, colleges, hotels, foreign countries et cetera. The oil products will also be sold abundantly in supermarkets and big malls in cities. There is a growing market for sunflower cake from nearby countries including Kenya, Comoro, Zambia and Malawi. Sunflower oil is now on the move to be exported to Turkey, Israel and North American countries.
4.2 Market Size and Trends
The market for sunflower oils and related products is now increasing. Many people are shifting from imported edible oils to the locally natural and organic products. It is estimated that almost 4 million people will be potential buyers of TAN Sunflower oils and this market size is expected to grow 10% annually for the first year and about 20% annually for the second and 35% for the third year.
Table 2. Full operational (100%) TAN Sunflower Products Sales estimates
Item Qty /Day Kg/Litres Qty /Month Kg/Litre Unit Price Tshs Total Revenue/Month (Tshs)
Sunflower Oil 2000 6,000 3,000 18,000,000
Sunflower Cakes 4,000 12,000 150 1,800,000
Sunflower Seeds Export
-
50 tonnes per month
-
17,500,000
Sunflower Crude Oil Export
-
10,000 litres per month
-
25,000,000
Competition
Tan Sunflower competitors include Arab countries sunflower oil providers and local sunflower
oil producers. There are two kinds of competitors. The first group of competitors is Substitute competitors. These are manufactures and sellers of substitute seed cooking oils such as groundnuts, simsim, olive, cotton et cetera. These competitors have less impact to Tan sunflower business as the products are not directly related, they are consumed with special purposes and they are in most cases more expensive compared to sunflower business. The second group is Direct competitors. These are manufacturers and sellers of sunflower oils within Tanzania and abroad.
Table 3. A list of Direct competitors and their market share:
Company/Business
LOCATION Brand Name Market Market share
(%)
Murza Oil Industries Ltd
DAR ES SALAAM OKI, KORIE
SUNDROP
Local/Export
30
Bidco Oil Industries Ltd
DAR ES SALAAM KORNO GOLD
Local/Export
15
FOREIGN COUNTRIES SUPPLIERS
VARIOUS
Local
16
Amani Sunflower Oil
DAR ES SALAAM
AMANI
Local
5
Mount Meru Millers Ltd
ARUSHA
SUNOLA
Local/Export
15
Mohamed Enterprises Ltd
DAR ES SALAAM
MASAFI
Local/Export
20
TAN Sunflower
TANGA
TANSUN
Local
3
Bar Chart showing market shares of Sunflower Oil Manufacturers and Sellers
Despite a large number of big oil manufacturers, importers and exporters in the market place, still the opportunity to peak is available. Most of the brand which is available does not conceal a sense of creativity and product development probably because the market is not very much sensitive. At Tan Sunflower, we believe that soon the market will be more sensitive to quality, appearance, convenience and product availability. We will make sure that we hijack part of the market share bit by bit until we own the biggest share in the market place. Its just the matter of time and commitment, to secure a bigger portion of the market share.
4.3 Estimated Sales
Estimated sales for all products are as follows:
1st year Tshs 76million; There is huge investment costs and the products are new in the market
place.
2nd Year Tshs 85million; Products have started peaking in the market place and most of the
customers have used the products
3rd Year 280million; At least the market is approaching its maximum peak, marketing costs also
are dropping
5. MARKETING & SELLING STRATEGY/ PLAN
5.1 Strengths, Weakneses, Opportunities and Threats (SWOT) Analysis
TAN Sunflower is a business with a number of strengths, weaknesses, opportunities and Threats. They are shown as follows:
STRENGTHS
• The Business Manager has a long time experience and expertise in sales and Marketing after working with multinational companies including Macmillan and Celtel (now Zain) as a Promotion Manager and Shops Sales Manager respectively. The expertise is a great strength in manufacturing the best quality products and selling them instantly through the use of proper sales and marketing strategies.
• Quality of Organic Sunflower products: The quality and designs made by TAN Sunflower is unbeatable within our region and we hope to continue leading in the market forever selling the best organic sunflower without any additives or chemicals which is highly preferred by the community as a health care.
• Geographic Location: TAN Sunflower production plant is located in Korogwe district in Tanga region. The area is a highly networked with the best communication infrastructure including roads, communication networks et cetera. The networks serves very much to create market lingages and fast transportation of the materials and products to big cities including Arusha, Moshi, Dodoma and Dar es Salaam.
• The management and staff of the company have great knowledge and expertise in searching for markets locally and internationally and we always seek for new knowledge and training related to marketing. The company has enough manpower and is always ready to recruit more through a network of jobseekers available. The Manager is also well equipped with workforce development skills gained from the United States of America where he went to attend Career Guidance and workforce development skills therefore he will serve as a career guide for the rest of the staff to work more productively.
• The political system of the country is very stable therefore it promises better future for the business as it also advocates very much on expansion of the Agriculture and Manufacturing sectors.
• Website and Internet publicity: To reach international markets, TAN Sunflower products have engaged in procuring the state of the art website that will link international lovers of organic sunflower products from Tanzania or Africa at large. All products will soon be visible through the website.
WEAKNESSES
• Despite our huge vision of feeding the whole of East Africa with TAN Sunflower products the company is not yet endowed with a sounding capital base to up bring the project to a full potential. This is due to the newness of the project and the and a low financial position of the business owner. We hope that after a given time, more investors will be attracted to co invest their money with us.
OPPORTUNITIES
• Organic oils without cholesterol is becoming a city life fashion to avoid desease related to blood pressure. “Therefore our biggest marketing gimic is on organic oils without cholesterol”. With this feeling, we are sure more and more people will be attracted to consume our healthy products.
• Attending local and international trade shows will helps us to get more or new markets and business opportunities.
• East African community encourages business initiatives through fair travel, marketing, tax relief. The community will enable us to enter other countries markets where they don’t cultivate much sunflowers including Kenya Uganda Burundi and Rwanda.
• The business Manager is running radio, Television programmes and a newspaper articles every week therefore it’s a good opportunity to advertise and promote the TAN Sunflower products through the same programmes.
THREATS
• World Economic crisis have brought down the purchasing power of many people in the world who might be potential buyers of our services. We hope that as days are passing by, the situation will stabilize.
• Inflation: This is a threat to the company business as it will lead to instability in the financial position of the company due to frequent us of foreign currency including United States Dollar, Sterling Pound, Euro et cetera.
• Labour turnover: Some of our key trained workers in the area of production and distribution might shift to other company in search for greener pastures therefore will be a loss to our company. This may be stopped or slowed down by offering competitive wages and salaries to our employees.
• Competition: There exists a competition in the market especially the Chinese and Asian fake Sunflower products which are cheaper compared to ours therefore they drop our profit margin and financial stability. Although the competition is very high still we can compete using quality designs and products. We also hope that after penetrating the market, more manufacturers might be attracted to enter the same market therefore we need to be very much prepared to face the coming competition through quality customer service, the best distribution and marketing.


Partnership
Hi,we are interested in partnering with you in theproject. Please send us details of how we ca do this. My company is interested in sun-flower products in Kenya. We also need many sun-flower seeds, and processing machinery