Cost and return structure in sawmill industry in Ijebu Ode, Ogun state, Nigeria

Abstract

The study focused on the cost and return structure in the timber industry in Ijebu Ode, Ogun State. The study made use of both the primary and secondary data. The instrument used for collecting the primary data was a set of structured questionnaire. A Multistage Sampling Technique was used in sample enumeration. Descriptive and inferential statistical methods were employed in analyzing the data in the study. The finding showed that 32.6% of the industries were retailers while 30.4% were wholesalers of timbers and both had regular supply of the products. The working capital among the timbers business was N3,641,905.6 and the average annual income was N1,682,064.2. The budgetary analysis revealed that the total annual profit for timber traders ranged between N1,273,103.63 and N2,394,341.77 for 2010 to 2014. . Government policy, high cost of transportation, inadequate credit facilities and high cost of energy and power were some of the constraints faced by timber industries in the study area. The use of modern equipment and machines are needed to replace the outdated equipment in order to increase the output and profit. The level of access to credit facilities should be improved upon by encouraging the respondent to form cooperative societies so that they can mobilize enough working capital for their business.

KEY WORDS: Cost and return, Timber, Industry, Structure, Constraint