Economic feasibility of maltose production in Ghana

Abstract

The present study is an activity under "New market for cassava" project which is being funded by DFID and implemented by NRI in collaboration with various institutions in Ghana. The study analyzes the economic feasibility of cassava based sugar syrup (Maltose) production and examines the effect of industrial use of cassava on its availability for food and on farmer livelihood as well as the long term and medium term sustainability of maltose markets in Ghana. The purpose of the study is to provide information that would serve as an investment decision tool for rural processors, potential investors and researchers interested in cassava based sugar syrup production in Ghana. Cash flow analysis of the alternative options of sugar syrup production revealed that cassava flour based sugar syrup production is financially and economically viable with estimated NPV of ¢3,023,264 and ¢85,755,097 at 30% discount rate; and IRR of 44% and 137% for small-scale and large scale production respectively. However, sugar syrup production from starch is not financially viable due to high cost of starch. Economically, sugar syrup cannot be substituted for sugar as a sweetener. The immediate market envisaged for centralized/commercial production option is industrial use of sugar syrup. Considering the effect of the proposed project on cassava availability, the study established a surplus-cassava supply case in Ghana that underscores the importance of developing "New market for Cassava" especially in narrow utilization based production areas. Other economic and social benefits derived from such a project include foreign exchange savings, improvement in income levels of target groups and employment creation opportunity for women to engage in mainstream income generating activities. It is recommended that work done on industrial market survey (sugar syrup) should be updated and coverage expanded in order to analyze the expected market growth for sugar syrup. In addition, product level competitive analysis (imported sugar syrup vis-a-vis domestic sugar syrup) in terms of quality, value and volume requirements need to be researched into and appropriate market linkages created for rural processors, as a key determining factor to adoption of such an innovative technology