Do you want to learn how to start a cassava processing business in Nigeria? Are you interested in venturing into cassava processing and exportation of cassava products from Nigeria? If yes; I will suggest you keep reading. This article is complete guide to cassava processing business including the machines and other factory equipment.
Nigeria is currently the world leading producer of cassava, producing about forty million (40,000,000) MT per annum and cassava alone contributes about 5% of agricultural GDP in Nigeria for food or domestic purposes but its industrial processing and utilization has been extremely small.
Cassava is one of the major common foods in Nigeria and its by-products serve as raw materials for the pharmaceutical, confectionery, ethanol, textile, beverage and packaging industries. Cassava flour is a good substitute for wheat flour when it is well processed.
Cassava processing business is a very lucrative business you can start in Nigeria. In fact, it is one of the most untapped business opportunities in Nigerians. Locally, this business is simply a gold mine for small, medium and large production industry.
What is the cost of starting a cassava processing business?
The business is capital intensive. See the rough estimated cost of starting cassava processing business
In recognition of the socio-economic importance of cassava, the formal president of Nigeria; Olusegun Mathew Okikiola Aremu Obasanjo, inaugurated Presidential Committee on Cassava Production and Export in August 2002, with the mandate to ensure that Nigeria earned $5.4 billion annually from the export of cassava value-added products, such as cassava chips, starch, etc. The blueprint for the programme was presented to the Federal Executive Council (FEC) which consequently approved a take-off grant of N5.4 million for the execution of the programme in 2003. The project actually took off in 2004.
In spite of the effort put up by Nigerian Government to boost income generation via cassava production, processing and exportation; the cassava processing business opportunities in Nigeria has remains untapped by both individuals and companies. So, if really you want to start cassava processing business; below is an in-depth guide to starting of the cassava processing business.
Before I begin to discuss how to start cassava processing business, let me first list all the products derived from cassava processing. The products that be derived from cassava processing include;
- High quality Cassava Flour – used in baking bread, cakes etc. some of Nigerian top flour brands include: Dangote flour Mills PLC, Flour Mills of Nigeria PLC, Honeywell flour Mills PLC etc. You too can join top flour brands if you start your own cassava processing business and be serious about it.
- Industrial Starch – used in production of custards, salad dressing, food additives, making noodles and pasta and also as food thickeners and stabilizers.
- Industrial Caramel – which can serve as colouring agent to drinks and used in flavouring popcorn among other edibles
- Ethanol and bio fuel – Cassava can be processed to produce ethanol and other bio fuels used in powering automobile machines and some industrial machines. Ethanol can also used in producing perfumes, methylated spirits, drugs, insecticides and varnishes
- Garri – is a popular staple food in Nigeria consumed by more than 80 million people on a daily basis
- Glucose syrup – cassava can also be processed into sweeteners like glucose syrup which is an alternative for sugar and saccharine. Large manufacturers like beverage and food processing companies need glucose as sweeteners and additives to their products
- Animal feeds – cassava can be processed into livestock feeds for pigs, goats and poultry animals. The local market for this product is over N900 billion as of 2017
- Canned Juice and Jams – cassava can be processed into juice and can be combined with other ingredients to make jam
- Arrowroot – starchy food product that’s similar to tapioca. It’s made from several different root plants, including cassava.
- Tapioca – Tapioca flour is actually the bleached and extracted starch from the cassava tuber. Tapioca flour is typically used as a thickener because of its high starch content, while cassava flour contains the fibre from the root that makes it ideal for preparing more structured dishes
The cassava crop can yield at least 15 different products when processed and each of these products has relatively large market values.
Brazil processes cassava into ethanol which can be used for powering automobile vehicle.
China purchases cassava pellets from Nigeria use in producing industrial Caramel, glucose and high quality cassava flour for their food processing industry.
How to Start Cassava Processing Business
To start cassava process business in Nigeria; here are steps you can follow;
- Carry out a market survey for cassava products: this is first step you should take if you’re ready to go cassava processing business in Nigeria. Market research is a very important step for all business start-ups. It will help you understand whether your cassava processed products is likely to generate high demand or not. Most Successful and savvy companies invest largely in market research surveys because it provides them with concrete data to analyze before making important product, services, or organizational decisions. So, it is necessary you carry out a market survey before you begin to set up your business.
2. Register a company name: since you’re going to operate as a standard company, you need to register your company name. Registering your company is very vital because you may wake up one day after brand have made a name to discover that other company have register your brand name.
3. Put down detailed plan of your cassava processing business: A business plan is a blueprint upon which the activities of your cassava processing business will rest upon. It will help you secure loan and attract potential investors. Most start-ups failed to put down a business plan before beginning their business venture and this had often hinder them from securing loan to support their business at the time of finance breakdown. The result of this is the timely collapse of the business start-ups. So, it is very important you have detailed plan of your cassava processing business before taking off. It said, ‘if you fail to plan, you plan to fail.
4. Rent a Factory Building: You need a factory building for your cassava processing The location of the factory matters a lot. It should be accessible and also has a good road network. The factory should be near enough to the cassava farm to avoid unnecessary transportation expenses. The best location for Cassava processing business should be in sub-urban region.
5. Acquires all necessary business permit and licence: To operate and run any business in Nigeria successfully, you need to acquire permits and licence for operating the business. If you don’t want to open an office for the local and state government parasitatals, you have to get all necessary business permit and license.
6. Purchase cassava processing machines and equipment. Many component of the work done in the factory is automated. So, the cassava processing machines and equipment should be purchase. The machines and equipment to be purchase include;
- Auto Fryer
- Hammer Cyclone
- Scales and Sealing machine
- Cabinet Dryer
- Manual Fryer
- Cassava Chipper
- 25 KVA generators
- Truck (optional) . After the purchase, the machine need to be installed, you may need the help of an expert for the installation.
7. Employ your factory workers and staff: Now that things are getting ready, you have to employ your factory workers and staff. Make sure you train them on how to operate the machines without damaging them. Most machines come with manufacturer’s guide.
- Organize your management team: If you must succeed in this business, you have to make sure your team are organised. Assign duties to them according to their experiences and skills.
- Start the cassava processing company: Get started! This is most important point. Most people after getting things ready still fail to start; may be out of fear of failure.
- Advertise and Promote your cassava processing company: Now that you have started the business, you need to advertise your business. There are many ways you can advertise and promote your cassava processing business. You can use the following;
- Personal contacts by your marketers
- Local newspaper
- Sharing of flyers
- Organise interactive forum with industries or companies that many need your product
- Social media
- Giving out freebies to those that purchase your product
- Building websites for your business
- Advertising your products with Google etc.
Is Cassava processing business lucrative?
Yes! From 40 million tons of cassava, 25 million tons can be process into various products such as 2 million tons of animal feeds which can yield over N160 billion, 3 million tons of industrial starch which can generate N150 billion and 4 million tons of ethanol which can yield over N320 billion; that’s over N620 billion per annum from 3 products only. Of the setback is that garri could become more expensive for the local market. From only exportation, Nigeria can generate over $400 per ton from 50,000 tons of cassava pellets exported to China which is over $20 million per annum.
Cassava processing industry can generate Nigeria a lot of income and wealth if properly harnessed. In addition, one large scale cassava processing mill can employ over 290 people and if Nigeria has at least 1,000 mills; we will be talking of creating at least over 290,000 jobs.
Where can I get Target Market for cassava products?
Locally, our cottage industries can purchase products derived from cassava. Manufacturers of perfumes and insecticides, pharmaceutical companies, breweries, Noodles and Pasta companies, poultry and livestock farms purchase cassava products need cassava products. International trading companies that supply overseas food processing companies would order for Cassava Pellets. So, there is vast market for cassava products.
Sale of cassava products on domestic market or international market, which is better?
Selling on domestic market is far more lucrative than the international market except if you want to specialize in processing cassava pellets then there is a good market for it in China. However, most products that can be derived from cassava processing are more profitable for the local market than international market. Garri alone has a huge local market that can guarantee all year sales and industrial starch also has a huge market too.
What is the faith of Cassava Processing in Nigeria?
- As long as the population of Nigeria continue to increase, the market for Garri, starch and other cassava products will also continue to rise.
- Bakery industry will continue to demand for HQCF as an alternative.
- The price of purchasing animal feeds is on the rise thus cassava processing can offer cheaper alternatives to existing animal feeds sources
What are the Challenges in cassava processing business?
- Cheaper Substitutes of cassava products are in high demand and are preferred. Example; Wheat flour is largely preferred to cassava flour and cassava starch is not the number one source of stabilizers and thickeners in food processing industry.
- Processing Challenges: The processing of cassava into its derivatives requires high technology and techniques and both are in very short supply as the locally fabricated machines are at best average and some of the processing techniques are labour intensive. An optimum processing facility that can produce quality cassava products is very expensive to buy.
- Target Marketing problem: getting buyers especially if you’re into exportation of the cassava products is not an easy task, many international buyers prefer to buy from Costa Rica and Brazil because of superior processing techniques and storage of cassava roots. Secondly, the price of cassava per ton is relatively low compared to other cash crops and doesn’t encourage large scale cultivation.
- Funding and Credit facilities: Cassava processing needs adequate financial backup to grow and only the bank of agriculture and bank of industry are disposed towards this industry and both have limited funds available.