Economic Evaluation of Cookie made from blend of Brewers′ Spent Grain (BSG), Groundnut cake and Sorghum Flour

Abstract

Abstract Bakery and pastry products such as cookies are usually produced from wheat flour and as such contribute to high foreign exchange for tropical countries where such cereal is not cultivated. In view of this, we evaluated the engineering economics for the utilization of dried brewers′ spent grain, groundnut cake and sorghum flour in the industrial production of cookies. The production was based on the assumption that the cash flow was uniform over the plant life (i.e. 10 years) with no salvage value. The equipment required for the production process was identified and estimates obtained from equipment manufactures. The production of the cookies was based on constant mass flow rate of 90 packets/min. The effects of uncertainties on cookie production were evaluated by varying the operation days (330, 300 and 250 days) and also by varying the price of some key variables required for the production processes. The results indicate that the capital cost (fixed and working capital) and the annual production cost (APC) were US$1.39×106 and US$10.08×106/year, respectively. The after tax annual revenue was US$1.63×106/yr. The return on investment (ROI), single payback period (SPBP), discounted payback period, gross margin and internal rate of return (IRR) of the plant were 63%, 1.58 years, 2.08 years, 23% and 77.52%, respectively. The result also showed that the production plant is feasible and could be operated for 330, 300 and 250 days. The difference between operation times lies in the profitability, which decreases as the number of days reduces. Based on the result of this analysis, brewers’ spent grain, groundnut cake, and sorghum flour can be utilized in industrial production of cookies with guaranteed profitability.