Profitability of Granite Quarry Operation in Akure South Local Government Area of Ondo State, Nigeria

Abstract

The study assesses the economic profitability of granite aggregates production using Akure South Local Government Area of Ondo State, Nigeria as a case study. Three quarries were selected within the northern, southern and central part of Akure South Local Government Area and they were subjected to economic analysis based on their present operational status. Data was collected on performance characteristics of each of the quarries taking into consideration the cost implication of the basic cycles of operation. The data collected were then subjected to a pro-forma cash flow analyses for both short-run and long-run term investment. The result obtained shows that two quarries (Francisca Muinat Company (FMC) and Ebenezer Mining and Ceramic Company (EMCC)) out of the three quarries achieved returns on investment before the end of the first year of operation while the third company (Fountain Construction Company (FCC)) achieved return after the end of first year. The FMC recorded a profit of ₦570,380,000 while EMCC recorded a profit ₦563,210,000 and FCC recorded a profit of ₦369,539,100 within the first 8 years of operations. The study thereby concluded that as much as granite business is a capital intensive yet is a profitable business if is properly managed.