Sorit bread production in Nigeria: A cost analysis

Abstract

This paper analyses the cost-effectiveness of the commercialization of SORIT bread in Nigeria. The high cost of wheat flour ends up increasing the cost of production and thus reducing the profitability of bread production, hence, this study was carried out to find a suitable partial replacement of wheat flour from local raw material to help boost bread production profitability and reduce demand shortages for wheat flour. SORIT bread is bread made from the composite of wheat flour, local rice flour, and soybean flour. Thus, the paper sought to determine if SORIT bread production is a commercially profitable venture. The Study employed a cost analysis technique in determining the profitability of commercializing SORIT bread. Analysis of the production and sale of 1000 units of SORIT bread weekly gives a profit margin of N5,015,000.00 in a year which indicates that the commercialization of SORIT bread is a very profitable venture. The cost-benefit ratio indicates that for every N1 spent on the production of SORIT bread, the investor receives a benefit of N1.16. Also, the cost efficiency shows that the cost of producing one unit of SORIT bread is N603.56 thus indicating a 14% profit margin which falls within the industry standard of 10 - 15%. Thus, this paper concludes that the commercialization of SORIT bread is a very profitable venture as it has proven to be a very cost-efficient enterprise. It is recommended that SORIT bread production be encouraged since it is a profitable business in Nigeria.