Tips on how to fund your exportation business

Funding your export business? Depending on the size of commodity you’re looking to export, there are several options for funding available to you. Let’s review some of the options out there, and then you can decide which suits your best.

Commercial banks

This option is best suitable for medium and large scale exporters are more likely to get loan from Commercial banks than small scale or even worse, beginners. These banks would most likely request bank statements showing how much you’ve invested in the business already and cash flow into your business. They’d also require you provide collateral and other necessary documents that show they can get their money back as agreed.

The government

With the government working hard in diversifying country’s revenue from oil, they have continued to roll out several incentives to support non oil-exporters over the years.

Unlike private organizations like the commercial banks, you can get Government support(which can be in form of credits, grants, waivers, subsidies, etc.), at little or very low cost, which would turn out be the springboard to propel exporters to greater profitability.

We will look at several bodies through which government provide these supports:

a. Bank of industry(BOI)

The bank of industry provide several grants and funding support programs for exportation yearly. Most times these funds are released through several other bodies as related to the industry, like NEPC(Nigerian export promotion council), MAN(Manufacturers Association of Nigeria), etc.

b. The Nigerian Export Import (NEXIM) Bank

The NEXIM’s main purpose to provide financing for importers and exporters.

They offer wide range of funding options, such as:

• Direct Lending Facility (DLF)

• Export Credit Insurance Facility

• Stocking Facility (for manufacturing exporters)

• ECOWAS Interstate Road Transit Scheme

• Foreign Input Facility (for manufacturing exporters)

• Local Input facility

You can check up their website to see explore more options available and how to get them.

c. The NEPC (Nigerian Export Promotion Council)

The NEPC provide export incentives for exporters. These can be monetary, tax or legal provisions put together to support exporters of certain goods and services in Nigeria. There are two financial support programs the NEPC provide to exporters: Export development funds, which is more suitable for beginners and small scale exporters, and Export expansion grant(EEG), for large scale and more experienced exporters. You can always head over to their website to check the processes to get started.

Your buyer

Yes, your buyer can help fund your exportation. You can ask for upfront payment. However this method is often possible on the sound foundation of trust. So few question, why should any business trust you? What are the things about your business that can make any buyer trust you? For a beginner and small scale exporter, can you leverage other several respectable brands to give you much credibility? How do you go about that? It’s all left to you.

Associations

You can also get funding from associations. However you’d most likely have to be a trusted member before you can have such access. The good thing about these associations is the trade and industry knowledge you’d gain as you relate with other like minded exporters. To be a member, most require membership fee plus other vital documents. Although recruitment criteria vary across several associations, they want to add as much quality to their group as possible. They’d want to know if you’d be trusted.

Cooperatives

There are several cooperatives you can join where you can get constant funding to facilitate your trade. The good thing about cooperatives is you can get loans at very low interest, so long as you’re diligent in your paying back of the loan. This method of getting fund is suitable for all exporters of different levels.

Personal savings

There’s no one in this world who can believe in your business as you do. One of your first steps in business would mostly come from you funding your business from your pocket. For small scale exporters, personal funding is a very viable option, because you’re operating on a small scale, it is easier to raise the capital from your savings. In the future should you decide to approach the banks, or any investor for funding your bigger trades, they can listen to you as they can see you’ve been investing in the business.

Friends and family

Friends and family will always be there to support you. Beautiful thing about this is most friends and family might not require interests, some can even give you enough time as you want to pay back- just ensure you refund.

Getting funding for your export endeavor is an essential part of your business, and you will need funds as business grow. You should always look to reduce the risk of funding your export by trying out some of the methods we shared on here.
For beginners and small scale exporters, try to be attentive to the several government incentives rolled out, and look for ways to benefit from them.

4 ways to be profitable in export business

When we go into business, it is to make profit. For exporters (particularly start up exporters), having an understanding what you should do to be profitable on a regular would help sustain your business.
Let’s delve right into it.

  1. Understand how to use hedging to mitigate currency risk
    Currencies fluctuate. Every day events take place in the world, and these events have positive or negative effect on currencies. Every exporter has to deal with the risks associated with dealing in foreign currencies such that whatever happens you get your projected profit from your export. Imagine the value of GBP(Great Britain Pound) was N450, then two weeks later the value of GBP appreciates to N480. That’s N30 loss per unit on what you’re exporting.
    But what if you and your customer agreed on the exchange rate N450, and then you both worked out a way such that even if currency falls or rise, both party is assured of not being on the loosing side due to fluctuating currency price? That would be great, right?
    This is called hedging. Hedging helps both party bullet proof from whatever the price of any currency might be valued at in the future.
  2. Do thorough market research of your target market.
    Your market research should help you understand your market. It should help you gauge demand level, and how best to stay profitable with the market.
    Some tips to help your research is following industries relating to the commodity you’re exporting. For example, for a cocoa exporter, the chocolate industry is a good industry to follow. An increase in demand for chocolate is good indication of a booming cocoa exportation to that market.
  3. Secure low interest funding for your exportation.
    Because you don’t want to get loans that can put pressure on your margins, looking for some low interest loans or maybe government grants should be the way to go for you.
    Trying to get funds to facilitate your trade can be daunting. So exploring several options is crucial for you to remain profitable.
  4. Be creative with marketing and promotion
    After you’ve done thorough market research, it is time to start reaching out to your market.
    There are several way to promote your products to the international market, however, which ever way you choose to reach your customers must be able to give you edge in terms of long term profitability.
    Another important tip on this is once you’re able to find any customer who can trust you enough to want to do business, don’t disappoint! Your existing customers can bring more customers for you, this serves as a cost effective way to expand your business in your target market.
    Other ways to promote your business include run targeted adverts online or you can leverage on export agencies to access their network of buyers.

5 Products You Can Get From Nigerian Cocoa

Nigerian cocoa is gotten from the Cacao tree (Theobroma cacao). These trees are short and evergreen, shedding their leaves all year round. Although they are native to the Amazon basin, Cacoa trees are now commercially grown in parts of Asia and Africa including Nigeria.

Nigeria is the fourth-largest producer of cocoa in the world, churning out over 389,272 tonnes of the product per year. It is majorly grown in Ondo, Ogun, Cross River, Akwa Ibom, Delta, Osun, Ekiti, and Oyo states.


Nigerian cocoa is highly versatile. There are a lot of products that can be derived from it. These include:

Chocolate

Chocolate is the most popular product derived from cocoa. Its sweet taste, delightful flavour and the smooth mouthfeel has made it a favourite delicacy for many. It is eaten on its own as a snack or prepared into foods like cakes, pastries, sauces and so on.

Chocolate is made from cocoa beans which are seeds of the Cacao tree. The seeds undergo a fermentation process to get rid of its naturally bitter taste and build the desired flavour. They are kept in a warm and moist environment which promotes the growth of natural yeast and bacteria that causes fermentation.

After this is done, the beans are dried to prevent fungal contamination. They are then cleaned and allowed to roast evenly in a dry roast machine. After roasting, the shells (hulls) of the cocoa beans are removed to produce the nibs. These nibs are then ground to form a fine powder called cocoa mass. This is the purest form of chocolate.

The cocoa mass is liquefied by heating into cocoa liquor which has cocoa solids and cocoa butter in almost equal proportions. Cocoa liquor has a deep brown colour with a rich, bitter taste. The unique flavour, aroma and the addictive characteristic of chocolate are attributed to the cocoa liquor.

To make the various forms of chocolate eaten today, cocoa liquor is blended with varying amounts of cocoa butter, sugar added vegetable oils and milk. Chocolate, especially the dark variety is high in antioxidants such as polyphenols and flavenols. These antioxidants reverse the damage done by free radicals in the body. It may also reduce the risk of heart disease if consumed in moderation.

Cocoa Butter

Cocoa butter is one of the components of cocoa liquor. It is a pale-yellow solid with a melting point that is just below the temperature of the human body. Cocoa butter is extracted from cocoa liquor by cold pressing the liquor to separate its fatty content from the non-fatty cocoa solids.

This butter is edible and is used in the manufacture of chocolate. It can also be used in the preparation of dishes that call for any type of oil as it lends that distinctive cocoa flavour and aroma to foods.

Besides its culinary uses, cocoa butter is heavily used in cosmetic products. Its high-fat content makes it a good choice of moisturizer as it seals moisture into the skin It is also said to have healing and anti-ageing benefits on the skin.

Cocoa Powder

After cocoa butter has been extracted from cocoa liquor, the remnant is defatted cocoa called cocoa cake. A cocoa cake can be ground to form cocoa powder. This powder is used in making cocoa/chocolate-based products such as chocolate drinks and chocolate desserts like cakes and ice cream. It is also used in making brownies, chocolate sauces and smoothies. Cocoa powder has numerous health benefits. It has been shown to help reduce high blood sugar and cholesterol levels. Consumption of cocoa powder has been linked with improved functionality of the brain. It does this by stimulating an increase in blood flow to the organ.

Pectin

Pectin is a naturally occurring polysaccharide found in apples, berries and other fruits. It can also be derived from the sweatings of cocoa (cocoa pulp juice). The sweatings are precipitated with alcohol, then distilled to extract the pectin.

It is widely used as an emulsifier, thickener, and setting agent in pharmaceutical industries. A popular use of pectin is in the preparation of jam and marmalade. When heated with sugar and fruit such as strawberry, pectin causes the mixture to gel or set forming what we call Jam. Thus jam can be used as a spread for bread or eaten in its own.

Potash and Animal feed

The pod of the cocoa husk can be used to make both potash and feed for animals. To make potash, the husks are spread to dry in an open place for about a week or two.

The dried husks are then burnt into ashes in an ashing kiln to form the potash. This potash is used in making cosmetic soap bars. Cocoa pod husks are also used in making animal feed. In this case, the husks are sliced into small flakes, then minced and rolled into pellets. The pellets are allowed to dry before they are fed to animals.

    Ways of Identifying High-quality Cocoa Beans

    Cocoa beans are seeds of the Cacao tree. A member of the family Malvaceae, Cacao (Theobroma cacao) is a small tree that grows majorly in tropical regions. It is native to the Amazon basin although its cultivation has now spread to different parts of the world.

    The beans serve as a major contributor to the acquisition of foreign exchange for countries that export it. Cocoa beans are enclosed in cocoa pods that grow directly from the trunk of the trees. The pods are cut open to reveal the fresh beans that usually have a purplish hue. This hue disappears and the seeds turn brown during the fermentation process. Fermentation is necessary as cocoa beans naturally have a very bitter taste. The process reduces the bitterness and builds up the desired cocoa flavour in the beans.

    Due to its high versatility, cocoa beans are used in the preparation of many delicacies. Asides chocolate, which is its most popular derivative, several other products can be gotten from them. They are used in the manufacture of cocoa butter, cocoa powder, and other cocoa-based products such as chocolate cakes, icecream and so on. In addition to its versatility, cocoa beans carry numerous health benefits.

    They are rich in antioxidants such as polyphenols and flavenols which help in reversing damage caused by free radicals in the body. Research has also proven them to be effective in fighting against heart disease as well as lowering high blood pressure.

    To reap the full benefits of cocoa beans, it is very important to make use of high-quality ones. High-quality cocoa beans yield the best tasting cocoa-based goods while also preventing the health hazards that come with bad beans.

    So, if you’re looking to purchase these beans, following the tips listed below will help you identify the high-quality ones.

    The colour of the cocoa beans is a very good parameter in determining its quality

    Properly fermented and dried cocoa beans are brown with no trace of purple in sight. This is achieved by allowing the beans to ferment completely for about 7 days.

    If the fermentation process does not last for long enough, the beans will still retain its purple colour and bitter taste. This will have a nasty effect on the product the beans are eventually used to prepare.

    Mouldy and slaty cocoa beans should be avoided

    Mouldy beans have not been allowed to ferment nor dry properly. Hence, they look mouldy due to fungal growth and have a rough texture. The slaty ones have a colour combination of purple and grey and are results of incomplete fermentation.

    High-quality cocoa beans have the rich, intense cocoa flavour

    Under-fermentation and over-fermentation can cause flavour defects in cocoa beans leading to excessive bitterness and astringency. Cocoa beans also tend to absorb the flavour of anything they come in contact with such as smoke, chemicals and so on.

    This adds some off-flavour to the beans that are usually impossible to remove even after further processing. To ensure the beans only have desirable flavours, you should ask that a sample of the cocoa beans be made into cocoa liquor or dark chocolate. Then, they are tasted to check the strength of the flavour, presence of any residual acidity as well as extra positive flavours the beans may possess.

    Check the physical characteristics of the beans

    They should be fairly uniform in size with unbroken shells. They should also be reasonably free from debris, sticks, broken shells of the beans, living or dead insects, and pesticide residues. The beans should not be clumped together or flat as this could mean serious losses for whoever purchases them.

    The weight of a single cocoa bean should be verified before purchasing

    An average bean should weigh at least 1g. A smaller bean translates to a higher percentage of shell which means the fat percentage in it will be low. Smaller beans also require certain adjustments in factory settings that increase the costs of processing.

    High-quality cocoa beans have been properly dried

    The percentage of moisture falls between 7 and 8%. If the moisture content is more than 8%, edible material is lost and there is an increased risk of microbial infection. A moisture percentage of less than 6.5% translates to broken shells and a higher number of broken beans.

    How cocoa beans are stored plays an important role in determining its quality. If they are stored shabbily, they become dirty and infested resulting in a decrease in quality. The beans should be stored in clean bags. These bags should then be kept in dry storage houses that are free from rodents to prevent infestation.

      Common Mistakes Shrimp Buyers Make and How to Avoid Them

      Shrimp is one of the most consumed seafood in the world. These little crustaceans are the most widely served seafood in America. They have thin shells and live at the bottom of rivers, oceans, and lakes.

      Renowned as versatile culinary ingredients, shrimps can be made into many tasty dishes such as shrimp soups, sashimi, and shrimp creole. From being baked to boiled, grilled, and even barbecued, there is hardly any form of cooking shrimps can’t undergo.

      Shrimp are also highly nutritious as they are very low in calories but rich in protein. Not only are they abundant in magnesium, niacin, and vitamin B12, but they also contain antioxidants and omega-3 fatty acids. A particular type of antioxidant called Astaxanthin is found in shrimps.

      The reddish colour of shrimp cells is attributed to its presence in their bodies. Astaxanthin has anti-inflammatory effects in the body that could prevent brain damage and development of neurodegenerative diseases, such as Alzheimer’s.

      This antioxidant also improves the health of the heart by causing an increase in the level of ‘good’ HDL cholesterol. Also, shrimp are rich in Iodine. Iodine is needed for the synthesis of the thyroid hormone which is necessary for proper metabolism in the body. A deficiency in this mineral can lead to goitre.

      Due to its delicious taste and the health benefits it delivers, shrimp are highly sought after in the international market. This makes it a very good choice for an import business. However, buying shrimp for import comes with its challenges. There are certain avoidable mistakes shrimp buyers make that can be very costly.

      Here are three of these common mistakes and how they can be avoided.

      Not Doing Proper Research Before Investing

      It is not news that some shrimp buyers lack an in-depth understanding of the business and all that it entails. The shrimp business is a very volatile one and one that demands full knowledge from whoever chooses to go into it.

      There’s a lot to know about shrimps. The types that exist, the countries to source for them, whether they are farmed or wild grown, consumer quality expectations, among others. There are many species of commercially sold shrimp.

      The most popular one is the tiger shrimp which are easily identified by the brown markings on their bodies. They are the best source for in Thailand, Vietnam, Taiwan, and China.

      Another type of shrimp is the brown shrimp. These have a kind of mineral taste and are small with purple markings on their tails. They are mostly found in the Gulf of Mexico so it only makes sense to try to source for them there as it will be cheaper.

      Knowing all this information is very important as it will save a buyer from unnecessary stress and waste of money. To avoid this mistake of ignorance, shrimp buyers should take time to research on the on all the aspects of the business. They should also check the cost of importing the shrimp into their country and which producing country offers the best prices.

      Buying Shrimps at Inappropriate Times

      Every Shrimp-producing country has purchasing windows throughout the year. Usually, shrimp are harvested about 2 to 3 times each year but these harvest times are different for each country.

      Buyers sometimes make the mistake of assuming that anytime is the perfect time to buy shrimps as long as they are available. But this mentality can cause buyers to overpay for shrimp.

      For instance, black tiger shrimp are farmed in countries like Thailand, Vietnam, and China. Each country has a time when the shrimps will be freshly harvested and available at a price lower than usual due to high availability.

      These purchasing windows fluctuate as many factors keep them in flux. The factors include weather patterns, disease, exchange rate, feed price, and so on. It is in the best interest of buyers to do their research on this and also employ the services of professional suppliers and brokers. These experts understand the situations on the ground better than anyone and can tell when it’s the right time to make purchases.

      Giving Inadequate Specifications to Suppliers

      Specifications describe the important features in shrimp such as size, moisture content, colouration, and taste. One of the biggest mistakes shrimp buyers make is not being specific enough with these specifications.

      This gives room for suppliers to make annoying assumptions and interpretations that may lead to serious problems for buyers. The quality of the shrimp purchased may be compromised and the buyer will lose money and credibility.

      To prevent this, specifications should state explicitly the type of shrimp the buyer wants, the size, preferred freezing technique, quantity, moisture content, shipping terms, preferred packaging and so on.