THE FEDERAL UNIVERSITY OF TECHNOLOGY AKURE

SCHOOL OF ENGINEERING AND ENGINEERING TECHNOLOGY

DEPARTMENT OF INDUSTRIAL AND PRODUCTION ENGINEERING

A
FEASIBILITY REPORT ON LPG COOKING GAS PLANT BUSINESS

COMPILED BY:

ILUBANWO OLUKOREDE BABATUNDE

IPE/19/1432

SUBMITTED TO:

DR. ADAMOLEKUN

ENGR. RASHEED

(LECTURERS IN CHARGE)

COURSE:

INDUSTRIAL ENGINEERING ANALYSIS (IPE 308)

DECEMBER 2, 2023
TABLE OF CONTENT

1. Introduction

1.1 Industry overview

1.2 Executive Summary
1.3 Our Products and Services
1.4 Our mission and vision statement

2. Business Structure

2.1 Job ,Roles and Responsibility

3. SWOT ANALYSIS

3.1 Strength
3.2 Weaknesses
3.3 Opportunities
3.4 Threats
4. Market Analysis

4.1 Market Trends

4.2 Our target Market
4.3 Our Competitive Advantage

5. Sales and Marketing Strategy

5.1 Sources of Income

5.2 Sales Forecast
5.3 Publicity and Advertising Strategy

6. Startup Expenditure (Budget)

6.1 Generating Funding /Startup Capital for Blessed Cooking Gas Plant

7. Sustainability and Expansion Strategy

8. CONCLUSION

1. Executive Summary
At Blessed Cooking Gas Plant, we are passionate in the pursuit of excellence and financial
success with uncompromising services and integrity. We are in the industry to make a
positive mark.

We are quite optimistic that our values and quality of products and service offering will help
us drive our cooking gas plant business to enviable heights and also help us attract the
numbers of clients that will make the business highly profitable.

At Blessed Cooking Gas Plant, we are passionate in the pursuit of excellence and financial
success with uncompromising services and integrity. We are in the industry to make a
positive mark.

We are quite optimistic that our values and quality of products and service offering will help
us drive our cooking gas plant business to enviable heights and also help us attract the
numbers of clients that will make the business highly profitable.

1.1 Industry Overview

A cooking gas plant is a place where both individual and small businesses that also retail
cooking gas go to refill their cooking gas cylinder. It is usually more organized and bigger
than the average small scale gas shops that you can find around street corners.

In essence businesses in this industry retail cooking gas to individuals and small businesses.
The Cooking Gas Plants industry over the years has experienced a modest amount of
volatility. As a matter of fact, as more Nigerians switch from kerosene stoves to gas cookers,
the demand for cooking gas also increase.

The Cooking Gas Plants industry is indeed a very large industry and pretty much thriving in
all the parts of the world especially in countries in Africa. In Nigeria alone, there are loads of
cooking gas station scattered all around metropolitan cities such as Lagos, Abuja, Port
Harcourt, Ibadan, Kaduna and Calabar et al.

Although the cooking gas plants industry can be said to be a competitive industry, but it
does not in any way stop entrepreneurs who are creative and financially capable to still
make headway in the industry. It is indeed a profitable industry especially when the
business is well located.

No doubt residential estates and busy cities with growing population is highly suitable for
cooking gas plants. The catch is that if there are households that make use of gas cookers in
any city, then the city would have need for a cooking gas plant.

1.2 Executive Summary

Blessed Cooking Gas Plant will be a fully registered and licensed business venture that
operates a standard a cooking gas plant in Akure, Ondo State, Nigeria. We will be able to
secure all the required licensing from both Alagbaka and the Ondo state government.

Our basic services and products offering to our highly esteemed customers as a standard
cooking gas plant is to retail cooking gas to both individual and small businesses. We will
also run a related business that will be involved in retailing gas cookers, cooking gas
cylinders, gas cooker accessories and gas cooker repair and servicing workshop.

We are quite aware that in order to become the number one choice for gas cooker owners
who reside in the neighborhoods where our chains of cooking gas plants will be located, we
must continue to make our cooking gas plant welcoming, easy to locate and that is exactly
what we will do.

We are open to the use of latest technology in the cooking gas plants industry. No doubt our
excellent customer service and the range of additional complementary services we offer will
position us to become one of the most preferred cooking gas plants in the whole of Akure.

We will have a CRM software that will enable us manage a one on one relationship with our
customers no matter how large the numbers of our customer base may grow to. We will
ensure that we get our customers involved when making some business decisions that will
directly or indirectly affect them.

We are a company that will be dedicated to establishing and maintaining the best practices
as it relates to the cooking gas plants industry. Blessed Cooking Gas Plant will ensure that all
our customers are given first class treatment whenever they visit our cooking gas plant for
refill or to make enquiries.

1.3. Our Products and Services

Blessed Cooking Gas Plant will be a fully registered and licensed standard cooking gas plant
that is positioned in the cooking gas plants industry in the Nigeria to maximize profits.

Aside from the fact that we will be retailing cooking gas to households and small businesses,
we will also engage in other complimentary services that will help us maximize profits in the
industry. These are the products and services that will be made available to our customers;

 Cooking Gas
 Gas Cookers
 Cooking Gas Cylinders
 Gas Cooker Accessories
 Gas Cooker Repair and Servicing Workshop

. 1.4 Our Mission and Vision Statement

 Our Vision is to operate chains of cooking gas plants in strategic locations all round
Ondo State and in major cities in Nigeria.
 Our mission is to develop highly successful and profitable chains of cooking gas plants
with state of the art facility and latest technology; a business that will not only meet the
needs of her clients but also supersede their expectations.

2. Our Business Structure

Blessed Cooking Gas Plant is set to become one of the leading cooking gas plant business in
the whole of Ondo State and other cities where our chains of cooking gas plants will be
located hence the need for us to build a solid business foundation and business structure
that will enable us achieve our aims and objectives.

Excellent customer service and efficiency are top priority to us which is why we will ensure
that we look for applicants that match the picture of the business who want to build before
hiring them. Although we will provide trainings in areas such as excellent customers services
and safety as it relates to handling cooking gas et al, but we will ensure that we shortlist
applicants that are customer centric.

In essence, we want to build a team, a dedicated workforce that will work together to help
the organization achieve its set targets.

 Chief Executive Officer

 Gas Plant Manager
 Accountant / Cashier
 Human Resource and Admin Manager
 Pump Attendant
 Security Guard

2.1 Job Roles and Responsibilities

Chief Executive Officer – CEO (Owner):

 Increases management’s effectiveness by recruiting, selecting, orienting, training,
coaching, counseling, and disciplining managers; communicating values, strategies, and
objectives; assigning accountabilities; planning, monitoring, and appraising job results;
developing incentives; developing a climate for offering information and opinions;
providing educational opportunities.

Cooking Gas Plant Manager

 Responsible for overseeing the smooth running of the cooking gas plant
 Maps out strategy that will lead to efficiency amongst workers
 Responsible for training, evaluation and assessment of workers
 Ensures operation of equipment by completing preventive maintenance requirements;
calling for repairs.

Accountant/Cashier
 Responsible for preparing financial reports, budgets, and financial statements for the
organization
 Provides managements with financial analyses, development budgets, and accounting
reports; analyzes financial feasibility for the most complex proposed projects; conducts
market research to forecast trends and business conditions.
 Responsible for financial forecasting and risks analysis.

Pump Attendants

 Mans the various cooking gas pump machines

 Assists customers as required by them especially on how to handle their gas cylinder
when they are within our cooking gas plant
 Provides change for customers
 Handles any other duty as assigned by the cooking gas plant manager

Security Guards

 Ensures that the facility is secured at all time

 Controls traffic and organize parking
 Gives security tips to staff members from time to time
 Patrols around the building on a 24 hours basis
 Submits security reports weekly
3. SWOT Analysis

No doubt starting a cooking gas plant is indeed capital intensive especially for aspiring
entrepreneurs who may not have huge sum of money saved up in a bank.

I am aware that it will require loads of cash to set up a standard cooking gas plant in Akure,
Ondo state which is why we decided to do all that is required to build a profitable business;
we don’t intend to invest our hard earn money in a business that we know we are not truly
cut out for.

3.1 Strength:
Blessed Cooking Gas Plant will be centrally located along one of the busiest area in Akure,
Ondo State; our location is in fact one of our major strength. Aside from the basic service
that we offer, we also offer complimentary services that most of our competitors are not
offering.

3.2 Weakness:
Our perceived weakness could be the fact it is a new cooking gas plant business which is
owned by an individual , and we may not have the financial capacity to sustain the kind of
publicity that can give us leverage and start operating chains of gas plants in various cities
in the Nigeria as planned.

3.3 Opportunities:
We are centrally located in one of the busiest communities in Akure, Ondo State and we are
open to all the available opportunities that the city has to offer. Our business concept also
positioned us to attract people who like service and repair their gas cookers, purchase gas
cookers, gas cylinder and accessories. Akure is one of the densely populated communities in
Ondo State with a handful of students, and indeed populations translate to opportunities.

3.4 Threat:
One of the major threats that confront businesses all over the world is economic downturn;
when the economy is bad it affects consumers spending which in turn impacts businesses
negatively.

4. MARKET ANALYSIS

4.1 Market Trends

One of the trends in the cooking gas plants industry is that, in the bid to stay afloat in the
highly competitive cooking gas plants industry, owners of cooking gas plants now go the
extra mile to ensure that they make their facility welcoming and conducive for customers.
Cooking gas plants now have stores where they retail gas cookers, gas cylinders, and gas
cooker accessories and also a gas cooker repair and servicing workshop within their facility
so as to leverage on the opportunities around them to generate more income.

4.2 Our Target Market

Before choosing a location for our cooking gas plant business, we conducted our feasibility
studies and market survey and we were able to identify the location that will benefit greatly
from our products and service offerings which is why we deiced to settle for Akure – Ondo
State.

4.3 Our Competitive Advantage

Before launching our cooking gas plant we have critically studied the market and we know
that we have some form of competitive edge. Our competitive advantage is that we have a
standard and well – secured cooking gas plant facility that offers additional complementary
services that will definitely help us attract and retain customers.

Another competitive advantage that we will have is the vast experience of our management
team, we will have people on board who are highly experienced and understands how to
grow business from the scratch to becoming a national phenomenon.

5. SALES AND MARKETING STRATEGY

5.1 Sources of Income
Blessed Cooking Gas Plant is established with the aim of maximizing profits in the cooking
gas plant and oil and gas industry in Nigeria and we are going to go all the way to ensure
that we do all it takes to generate enough incomes from both our basic product and services
offerings and our complimentary services. Blessed Cooking Gas Plant will generate income
by offering the following services and products;

 Cooking Gas
 Gas Cookers
 Cooking Gas Cylinders
 Gas Cooker Accessories
 Gas Cooker Repair and Servicing Workshop

5.2 Sales Forecast

Below are the sales projection for Blessed Cooking Gas Plant, it is based on the location of
our business and other factors as it relates to small scale and medium scale cooking gas
plant company start – ups in the united states;
 First Fiscal Year-: N500,000
 Second Fiscal Year-: N1.5 Million
 Third Fiscal Year-: N2Million

5.3 Publicity and Advertising Strategy

Despite the fact that our cooking gas plant is a standard one with a wide range of other
complimentary services and products that can favorably compete with other leading brands
in the cooking gas plants industry, we will still go ahead to intensify publicity for all our
products and brand. We are going to explore all available means to promote Blessed
Cooking Gas Plant.

6. Startup Expenditure (Budget)

In setting up any business, the amount or cost will depend on the approach and scale you
want to undertake. If you intend to go big by renting a place, then you would need a good
amount of capital as you would need to ensure that your employees are well taken care of,
and that your facility is conducive enough for workers to be creative and productive.

As for the detailed cost analysis for starting a cooking gas plant business; it might differ in
other countries due to the value of their money. We know that no matter where we intend
starting our cooking gas plant business, we would be required to fulfill most of the items
listed below;

 The Fee for registering the business (venture) in Ondo State – Nigeria –N15,000

 Legal expenses for obtaining licenses and permits as well as the accounting services
(software, P.O.S machines and other software) – N30,000

 Marketing promotion expenses for the grand opening of Blessed Cooking Gas Plant
– N15,000

 Insurance (general liability, workers’ compensation and property casualty) coverage

at a total premium – N20,000

 Cost for payment of rent for 12 month and renovation inclusive – N240,000

 Other start-up expenses including stationery and phone and utility deposits – N5,000
  Operational cost for the first 3 months (salaries of employees, payments of bills et al)
– N200,000

 The cost for Start-up inventory (cooking gas, gas cylinders, gas cookers and
accessories et al) – N500,000

 Cost for store equipment (cash register, security, ventilation, signage) – N10,000

 The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone,
Fax Machines, tables and chairs et al) – N15,000

 The cost of Launching a Website – N25,000

 The cost for our opening party– N30,000

 Miscellaneous – N50,000
We would need an estimate of N2 million to successfully set up a standard cooking gas
plant in Akure, Ondo state . Please note that this amount includes the salaries of all the staff
for the first 3 month of operation.

6.1 Generating Funding/Startup Capital for Blessed Cooking Gas Plant

No matter how fantastic your business idea might be, if you don’t have the required money
to finance the business, the business might not become a reality. Finance is a very
important factor when it comes to starting a business such as kerosene retailing business.

We do not intend to welcome any external business partners, which is why we have decided
to restrict the sourcing of the start – up capital to 3 major sources. These are the areas we
intend generating our start – up capital;

 Generate part of the start – up capital from personal savings and sell of stocks
 Source for soft loans from family members and friends
 Apply for loan from my Bank

7. Sustainability and Expansion Strategy

The future of a business lies in the numbers of loyal customers that they have, the capacity
and competence of the employees, their investment strategy and the business structure. If
all of these factors are missing from a business (company), then it won’t be too long before
the business close shop.

One of our major goals of starting Blessed Cooking Gas Plant is to build a business that will
survive off its own cash flow without the need for injecting finance from external sources
once the business is officially running.
 8. CONCLUSION

The project is technically feasible and commercially viable. It is therefore recommended for
funding. All the strategies that will be put in place and the extra effort and time that will be
put into Blessed Cooking Gas Plant will definitely make it a success.