The exportation business is one of the most lucrative businesses with a profit margin on some select agricultural products and solid minerals being anywhere from 30% to sometimes over 100%. Especially earning in foreign currency is a great cash-cow.
But figuring out these questions: how to start exporting from Nigeria?, how to increase productions of agricultural products?,
how to access to loan facilities?,
what commodities to focus on?,
how to find international buyers?,
how to ensure the quality standards are high & met?,
how to manage logistics & transportation of the goods to the city?,
how to ensure security of the goods in transit?,
how to handle inspection at the port of loading?,
how to cover customs issues?,
how to ship the commodity?, and most importantly,
how to ensure payment every single time?,
is a serious hassle for a lot of farmers, traders and intending exporters.
To help new and existing agro traders to avoid these problems and execute successful trades every single time, Cokodeal as Africa’s largest export platform with over 6300 merchants on the platform trading from 8 countries in Africa and thousands of international buyers across the global markets is focused at helping finance agro business trades in Africa to ensure expansion that would cater to the consumption of agricultural products globally.
With the various investment opportunities in the Agricultural value chain in Nigeria, we observed that access to capital and loan facilities to grow, expand, export goods and improve business processes is a great challenge for farmers and traders alike.
In achieving increased production of agricultural produce to meet the demand of both the local and the global market, solving the above-mentioned challenge becomes a must.
The prospect of agriculture and trade in Nigeria is so high to ignore, contributing about 22.35% and 15.61% respectively to the economy and directly affecting over 60% of the populace. By the time Nigeria attains its full capacity in agriculture, it will become a great foreign currency earner than oil.
The implication is that Nigerian farmers will be able to earn in Naira and in Dollars as well as other foreign currencies. With various opportunities available to invest in the agricultural sector, financing the production of this agricultural produce is a step better in getting a tremendous return on investment.
Helping facilitate our capacity to solve the issues of expansion through quick access to loans, logistics, and improved business processes for farmers and traders in Africa will push for greater and wider coverage that will ensure access to bigger opportunities in agricultural exportation and increased supply to meet the global demand of these products, which would in turn result to a tremendous return on investment in the long run for potential investors.
Organizations such as AFDB and Afreximbank are some of the financial institutions to help unlock resources to help The Commodity Bank – cokodeal.com better serve the African traders to improve their wellbeing. Partner with us, invest in Cokodeal and watch us solve the problem of agriculture value network in Africa, thereby harnessing the potential it holds and giving you a great return on your investment.
Nigeria has an arable land area of 34 million hectares: 6.5 million hectares for permanent crops, and 30.3 million hectares on meadows and pastures. Agriculture accounts for over 20 percent of Nigeria’s GDP. The country is a leader in various types of agricultural production, such as palm oil, cocoa beans, pineapple, and sorghum. It is the largest producer of sorghum in the world just after the United States, and ranks fifth in the production of palm oil and cocoa beans. Nigeria is also a large global nuts exporter. In terms of value, it is the second leading exporter of cashew nuts worldwide. Indeed, oil, fruits, nuts, seeds are among the ten best performing export categories.
THE AGRICULTURAL OPPORTUNITY IN NIGERIA
There is no other African country where Farming is as viable as it is in Nigeria in terms of productivity and profitability. There is no other country where farmers are more advantaged as they are in Nigeria as regards demands for agricultural produce. Nigeria has a huge population of over 200 million people, twice more than the populations of Zimbabwe and South Africa combined. The entire population of Nigeria depends on staple foods produced from farms and other farm produces for their daily meals and sustenance. More than 80 percent of Nigerians buy their farm produce from the market.
Nigerian Government is seriously turning its attention to promoting farming in Nigeria to help boost food productions in the country and minimize food importation. The government is willing to assist any would be entrepreneur/investors with the necessary supports and logistics. Nigerians boasts the highest purchasing power in Africa, far more than any other indigenous Africans. The following includes staple foods with huge potential for investments in Nigeria according to agrobusinessngr. Rice Farming, Cassava Farming, Plantain Plantation, Poultry Farming, Pineapple Farming, Beans Farming, Catfish Farming, Goat Rearing, Snail Farming and Maize Farming. The above listed areas of agriculture have the potential to generate over 1.7trillion naira annually.
INVESTORS AND COMMODITY TRADERS ARE TAKING THE CHANCES AND ARE GOING INTO AGRICULTURE FOR ITS ROI
Agriculture in Nigeria is booming in recent times due to the increased awareness of the need for food security and sustainable food production in the country. Some agricultural companies in Nigeria have risen to this and made tremendous strides in the Nigerian agricultural industry.
These companies have exploited technology and innovations, an understanding of the people and the drive to meet a need and impact lives to build a booming industry in the most populous African nation. They have not just thrived for solving problems, they have also impacted a great number of people to a better livelihood directly and indirectly, examples of such companies include; Flour Mills of Nigeria, OLAM Nigeria, Babban Gona, Stallion Group, SeedCo Nigeria Limited, Dangote Group, BUA Group, Indorama Fertilizers, FarmCrowdy, AgroMall, among others.
NIGERIA AGRICULTURAL SECTOR IS OPENING UP TO THE WORLD
Nigeria exported agricultural products worth N321.5 billion in 2020, representing a 19.16% increase when compared to N269.8 billion recorded in 2019 and a 6.27% increase compared to N302.28 billion recorded in 2018.
However, despite the increase recorded in export, imported agricultural goods surged by 78.58% in 2020 compared to 2019. Nigeria imported agricultural goods worth N1.71 trillion in 2020 as against N959.5 billion in 2019.
This is according to data tracked by Nairametrics Research from the foreign trade quarterly reports, released by the National Bureau of Statistics (NBS).
In spite of crude oil, agriculture still remains the base of Nigeria’s economy, providing the main source of livelihood for most Nigerians. The sector remains the largest sector of the Nigerian economy and employs about two-thirds of the entire labour force in the country.
However, production hurdles have significantly impeded the expected growth. According to the Food and Agricultural Organisation of the United Nations, over the past 20 years, value-added per capita in agriculture has risen by less than 1% annually.
It is also estimated that Nigeria has lost about $10 billion in annual export opportunities from groundnut, palm oil, cocoa, and cotton alone as a result of the decline in the production of these commodities.
Agricultural products that fetched Nigeria significant cash in 2020 according to nairametric, include the following;
Sesame seeds – N98.27 billion
Sesame seed comes from a flowering plant mostly grown in Northern Nigeria due to the drought-resistant nature of the seed. It has many uses, but perhaps, its most important use is as a source of sesame oil which is the most demanded vegetable oil in the world because of its zero cholesterol content.
Nigeria has been one of the highest sesame seed-producing countries over the years, making the seed an important component of the country’s agricultural export.
In 2020, Nigeria exported sesame seed abroad to the tune of N98.27 billion. The highest quarterly export was recorded in Q1 2020 (N39.63 billion), before the heat of the pandemic, while the lowest was recorded in Q3 2020 (N15.59 billion).
Cocoa – N87.44 billion
Cocoa is a small perennial tree crop that primarily comes from the three tropical regions in the world; Southeast Asia, Latin America, and West Africa. Cote d’Ivoire is the single largest producer of cocoa beans, accounting for approximately 31% of the world’s supply.
The fruit is an egg-shaped red-to-brown pod that contains about 30 to 40 seeds, each of which is surrounded by a bitter-sweet white pulp. When the seeds are dried and fermented in the sun, they turn brownish red and are known as cocoa beans, which is the principal ingredient of chocolate.
In the year under review, Nigeria exported different variants of cocoa products to a sum of N87.44 billion. Good fermented Nigerian cocoa exported in 2020 was estimated at N45.36 billion, followed by superior quality raw cocoa beans at N36.53 billion, and natural cocoa butter at N3.52 billion.
Other variants of the cocoa product exported by Nigeria in 2020 include; other quality raw cocoa beans at N1.56 billion, other butter of cocoa and deodorized cocoa (N279 million) and roasted cocoa beans worth N190 million.
Cashew nuts – N45.88 billion
Cashew is a tree crop that has been cultivated for food and medicine for many years. The various parts of the cashew fruits are of economic value, which includes apple, nut, and kernel. The primary product of cashew nuts is the kernel, which is the edible portion of the nut.
In confectionery and bakery products, for example, kernels are used in the production of ice creams, chocolates, cakes, and sweets. Cashew nut shell liquid has also been used in making medicine used for treating various illnesses.
In 2020, Nigeria exported cashew nuts valued at N45.88 billion, with the highest quantity recorded in Q2 2020. The breakdown of cashew nut export shows that cashew nuts, in shell that was exported in the review year was N38.36 billion, while that which is shelled was valued at N7.52 billion.
Frozen foods – N7.78 billion
Nigeria exported various frozen food items in the year 2020, valued at N7.78 billion. Among the frozen food items exported in the period as stated by the National Bureau of Statistics were, other frozen shrimps and prawns, valued at N5.43 billion.
Frozen rock lobster and other sea crawfish stood at N1.98 billion while Hake, and frozen meat exported was valued at N374 million.
Shea – N6.47 billion
Shea fruits and nuts are “non-timber forest products” that are gathered annually during the shea tree fruiting season that extends from May to September. Shea fruits have an encompassed kernel and nut.
Oil and associated by-products are obtained from crushing the nuts, and these oils are used in creating shea butter, which is further used in making cooking oil, skin and hair moisturizer, soap, waterproof sealant for home walls, lamp fuel, and many more.
It is worth noting that Nigeria exported Shea nuts valued at N6.14 billion in 2020, while shea cake export stood at N337 million in the year under review. Other agricultural produce that fetched Nigeria huge export income include; Ginger – N6.15 billion, Soya – N3.53 billion, Coconuts – N3.36 billion, and Flower – N1.58 billion.
BECOME PART OF THE AGRICULTURAL REVOLUTION
Nigeria is a country immensely blessed with rich soil texture idle for the practice of crop production; however, we are unable to produce as much for our domestic consumption not to mention receiving adequate export value for our agro products.
It is no news that there is an international demand for most of Nigeria’s agro products; however, Nigeria spends more importing agricultural products from other countries.
Some of the major bottlenecks impeding the expected growth in the agricultural sector, despite huge monetary interventions in the sector in recent years, include logistic problems, infrastructure, amongst others.
According to a PWC report on the current state of Nigeria’s agriculture and agribusiness sector, Nigeria has significantly poor transport infrastructure and services (road and rail), particularly in the rural areas.
It also identifies the lack of cold chain logistics as a factor contributing to the decrease in trade capacity through losses from spoilage and impinged time to market.
The limited capacity of Nigeria’s seaport has also affected the ease of cross-border trade.
Finally, there is a need for Nigeria to improve its agricultural production so as to tap into the large foreign exchange that could come into the country through the export of these items.
INVEST IN THE PAN AFRICA COMMODITY BANK
Cokodeal as a pan Africa Commodity Bank is aware of the need to proffer solution to these problems, and as well harness the potential of the country through the Agricultural sector. As Africa’s largest export platform with thousands of traders in Africa and international buyers across the global markets, we are mandated to help finance agricultural businesses in Africa to ensure expansion that would cater for the consumption of agricultural products globally. With the various investment opportunity in Agriculture in Nigeria, we observed that access to capital and loan facilities to grow, expand, export goods and improve business processes is a great challenge for farmers and traders alike. In achieving increased production of agricultural produce to meet the demand of both the local and the global market, solving the above mentioned challenge becomes a must. The prospect of agriculture in Nigeria is so high to ignore. By the time Nigeria attain its full capacity in agriculture, agriculture will become a great foreign currency earner than oil. The implication is that Nigerian farmers will be able to earn in Naira and in Dollars as well as other foreign currencies. With various opportunities available to invest in the agricultural sector, financing the production of this agricultural produce is a step better in getting tremendous return on investment. Any entrepreneur who goes into any of the various opportunities in agriculture and get it right, is destiny for huge financial success. Partner with us, invest in Cokodeal and watch us solve the problem of agriculture in Africa, thereby harnessing the potential its holds and giving you great return on your
Fill the product information, product, price, name, product, images
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Ensure to upload high quality pictures of your products and a well written description of the product on your deal and specification.
Post each product one after the other without merging two products under 1 post/ upload.
How to promote your products through cokodeal
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This is an awesome way to promote your business on cokodeal for free. Depending on if you’re a buyer or a seller, your deals would be posted under “buyers’ needs” or “sellers’ offers” pages accordingly. The more deals you promote, the more your business can gain more traction of buyers on the platform.
When we talk about Nigeria, it’s vast amount of natural resources and the huge potential comes to mind.
At first glance, you can envisage the impressive potential ahead for the country, especially looking at the mining sector.
Nigeria has 44 different types of solid mineral resource spread across it’s 36 states according to reports by several government sources. But these resources are largely under-explored. For example, gold is found in some states in Nigeria, but you can’t compare the extent of its exploration in countries like Ghana, or South Africa with Nigeria. The difference is huge.
The government knows without a doubt mining in the country needs to go mainstream. A meager 7.12 percent contribution to GDP isn’t sufficient enough for what the country needs- not with the current financial situation in the country- and certainly not with the enormous potential the mining sector possesses.
Good thing government initiatives and policy reforms are being implemented now to support the growth of the sector, however in recent years, turn of events like the drop in oil price, the pandemic, and the fact that Nigeria just barely scraped through economic recession, things are expected to slow down, it is widely hoped that better things are ahead for the mining sector.
So on this post, we’d be providing you with information needed for investing in the solid mineral sector of Nigeria.
Mining Solid Minerals In Nigeria
Operations in the Nigerian mining sector is predominantly informal when compared to mainstream processing operations.
According to Nigerian bureau of Statistics, and KPMG, 80 percent of the miners in Nigeria are Artisanal and small-scale miners like those in the cement and limestone production companies, and activities like marketing and transportation are mostly done by the small scale companies or even individuals.
In terms of employment, mining and quarrying makes up 0.17 percent of employment in Nigeria according to several reports.
Key Players In The Nigerian Mining Industry
The Minister is saddled with the administrative role of the Ministry of Mines and Steel Development.
His job is to ensure a well coordinated and sustainable development of the mining sector, designing workable frameworks to support foreign and local investors, amongst other roles.
The Cadre Office is responsible for the administration of the mining titles, and the maintenance of registers ( register of Reconnaissance Permits; Exploration Licenses; Mining Leases; Small-Scale Mining Leases; Water Use Permits; and Quarry Leases) within which the Cadre Office administers.
The office also considers applications for mineral titles and permits, issue, suspend and upon the written approval of the Minister revoke mineral titles. And can grant property rights on scenarios there are competing applications for the same exclusive area.
Some Key challenges In The Nigerian Mining Sector
Illegal mining activities
Unstable political terrain
Solid Mineral Deposits And Their Locations In Nigeria
As of 2017, the three largest explored solid minerals were granite(17.5m tonnes), limestone(14m tonnes), and laterite(3.7m tonnes), with each of these minerals being produced in Ogun, Kogi, states and the FCT(Federal Capital Territory) respectively.
Location: Available in various regions in the country.
Laws and Regulations on Mining in Nigeria
Exploitation and exploration of solid minerals are governed by the Nigerian Minerals and Mining Act 2008 (the Act), and the Nigerian Minerals and Mining Regulation 2011.
The Act confers control of all properties and minerals to the federal government and forbids unauthorized exploitation or exploration of minerals.
According to the Act, in accordance with the Land Use Act, the federal government owns all lands found to contain minerals in commercial quantity.
As such, any person who lawfully acquires a right over the exploitation or mining of any mineral resource in the country is been passed onto by the government.
The Act also established the roles of the mining Cadre Office, and the Minister of the Federal Ministry of Mines and Steel, with the Cadre Office responsible for the administration of mining titles and the maintenance of the cadastral registers, and the Minister is vested the role of fostering the steady development of the mining sector by providing workable plans and templates in place for investors.
The Federal Ministry of Mines and Steel
The Ministry of Mines and Steel Development (MMSD), founded in 1985, was saddled with the task of galvanizing the development of the country’s solid mineral resources, in order to help boost wealth and job creation, and further rural economic development.
The ministry is responsible for the following Activities:
Identifying solid mineral deposits.
Setting up framework for prospecting investors.
Overseeing Quarry and extraction activities.
Issuing of permits
Licenses and leases for mineral sales and consumption,
Collecting rents, fees and royalties from mining companies.
Attracting foreign investments.
7 Parastatals Under the Supervision of the Federal Ministry of Mines and Steel
The Nigerian Geological Survey Agency (NGSA).
The Nigerian Institute of Mining and Geosciences.
Mining Cadastre Office
Nigerian Mining Corporation
Mines Inspectorate Department
Mineral Resources and Environmental Management Committees(established in each state of the Federation).
Mines Environmental and Compliance Department.
On the back of China’s trade partnership with Nigeria in recent years, Nigeria has seen boost in revenues for Zinc and lead ores and concentrates grow respectively, from $2.2m to $9.7m and from $175,000 to $4.2m. More partnerships like this are expected in the future as Nigeria looks to explore more resources.
Although one cannot overlook the rising issues of insecurity and insurgency in the country, prospects in the Nigerian mining sector is a huge lure and big opportunity for anyone ready to take the plunge.
Cocoa business is still considered under explored, and there’s enough room for more business people to make good money. While Africa dominates the world in cocoa production with over 70%, Africa is missing in the wealth in cocoa value addition, with just less than 5 percent market share.
As a country in desperate need to diversify its economy, this is one business you can venture into knowing the country need you eventually.
So are you ready to get started?
Let’s delve right in…
Introduction on cocoa
Cocoa, also called cacao tree, is an evergreen plant popularly cultivated to harvest its edible and rich cocoa seeds.
The cocoa seed is the major ingredient used in the production of chocolate liquor, chocolate solids, chocolate butter, and chocolate.
Cacao is a member of the family of malvaceae with its origin from the tropical rainforest area of central and southern America.
Cacao tree usually takes 3-5 years to grow it’s seeds. At maturation, cocoa pods are plucked off the tree and broken to extract the cocoa seeds. Each cocoa seed(also called cocoa beans) comprise of a seed coat, a kernel, and a germ.
Favourable Conditions for Cultivating Cocoa
In cultivating cocoa tree, you need the following conditions in your favour:
Temperature and weather conditions
Cacao trees are favorably grown in regions having about 27°C in average annual temperature, and an Annual rainfall of 150 to 350 cm.
Protection from Strong Winds
Strong winds often blow off unripe pods, and this can lead to waste and low yields for the farmers. Hence it is important to put measures in place to curtail such occurrence. As a typical example, Hurricanes can also cause huge damage to cocoa trees as seen in the West Indies and Central America.
Good covering from direct sunlight
It is encouraged as good practice to protect the cocoa tree from direct sunlight as it can cause pores on the cocoa pots. Planting of other crops to provide good covering from sunlight is a good practice.
Varieties of cocoa tree
They are mainly known as the common cocoa as they are 95% of world production. The pods are short, yellow, smooth without warts, with shallow furrows. Their quality is not as good as Criollo. They are grown mainly in west Africa and Brazil. It is grown a lot in Africa.
Criollos are typically protruded, yellow or red in color, with deep furrows and big warts when they are ripe. They are mainly known as the fine or aromatic cocoa because of their very good cocoa quality, and are less than 1% of world production. They are grown mainly in Latin America.
They are a hybrid of the Forastero and the Criollo and considered a fairly good, fine flavour cocoa. They are approximately 5% of world production, and grown mainly in Trinidad, Venezuela, Papua New Guinea, Sri Lanka, East Timor, Java and Madagascar.
Some interesting things to know about cocoa
Cocoa beans are rich in potassium, magnesium and iron.
Very rich in food value, cocoa beans contains up to 20% protein, 40% carbohydrate, and 40% fat.
Cocoa can prevent cancer and other heart , and blood related diseases as it contains theobromine, an alkaloid closely related to caffeine and phenols and flavenoids, antioxidants.
Cocoa in Nigeria
Agriculture was Nigeria’s main source of foreign exchange prior to independence. According to reports, 58.4% of the foreign exchange earnings from 1960 to 1970 was the export crop subsector of the agricultural sector.
Then came the discovery of oil in the 1970s which led to some drastic shift in the political and economic landscape of the country.
Oil became the main focus for foreign exchange, displacing agriculture, as evident in the sharp decline in output from 305,000, to 100,000MT, and Cocoa export contribution dropping to 5.3% from 1970-1985.
Although the 1986/87 cropping season saw output improved from previous lows to around 200,000MT due to Government intervention initiatives to revive the sector, the journey back to the top has been slow, maintaining an average of just 4% between 1980 and 2000. The country’s undying love story with oil has seen other sectors struggle over the years.
Nigeria is the third largest exporter of cocoa in Africa behind only Ghana and Cote’d’ivoire and the fifth in the world behind Cote’d’ivoire, Ghana, Indonesia, and Brazil, according to recent figures.
To run your farm here are some tips to help you:
Make good arrangements with farmers who’d be on ground to monitor your farm on a regular basis. You can look for good incentives for them. The best is if your farm is closer to a village settlement.
When getting your farm land, you want to look for areas you know wouldn’t be commercialized in the next 20-30 years.
Weed 3-4 times a year.
Always ensure carrying out best farming practices to achieve healthy yields.
Take some time in educating yourself on the best practices, and always look to transfer those knowledge to the farmers working with you.
Cocoa harvest seasons in Nigeria
Harvest season for cocoa span from October to September.
October to February as the prevalent period for harvest, while from April/May to September, harvesting of smaller and mild crops are common.
Where to find cocoa in Nigeria
Ondo State produces 70% of cocoa in Nigeria, making it the highest producer in the country. Here is a list of cocoa producers in the country, in no particular order:
Cocoa export supply chain in Nigeria
Every party involved in the supply chain play a key role in the overall business outlook of cocoa export in Nigeria.
These parties are:
The cocoa supply chain would typically start from local farmers; Small scale farmers are spread across the several cocoa producing states in Nigeria.
Each farm is about 2-5 hectares, and would produce on the average 0.6MT per hectare.
The farmers need steady and ready buyers to guarantee in-flow of cash to reinvest in their business, pay up immediate outstandings, loans and expenses.
Meanwhile the middlemen stand in the gap between the farmers and the exporters. They’re the aggregators. They source directly from the farmers and supply to the exporters in bulk.
Challenges facing Cocoa smallholder farmers in Nigeria.
These are the major challenges facing Nigerian cocoa farmers:
Lack of sufficient access to incentives and government support
Difficult access to market; poor road channels leading to high cost of transporting farm produce from farm to market
Increasing running cost of production
Less favourable climatic conditions; Climatic conditions now are far less favourable to that in the 70s and 80s.
Seasonality of cocoa farming means farmers do not make money during off seasons, and these periods can be challenging times for the farmers.
Challenges facing Cocoa exportation business in Nigeria.
Volatility and unpredictability of foreign exchange.
Dwindling number of smallholder farmers due to uninterested budding youth, and interest in other endeavours they feel is much more profitable.
High interest rates, to get financial credits and loans
Unstable political will.
Difficult port and customs regulations
Governing bodies who are key players in the value chain have over the years failed in providing adaptation and workable systems and policies to ensure ease of doing export business.
Top cocoa exporting countries in Africa
Top importers of cocoa in the world
Top cocoa importers in Europe
Governing organizations to follow as a cocoa exporter in Nigeria
The Nigerian Cocoa Association
World Cocoa Producers’ Organization
Cocoa Research Institute of Nigeria (CRIN)
Cocoa Framers Association of Nigeria
Opportunities in Cocoa Export Business
Surging global demand cocoa and cocoa futures, In 2011, the trading volume of cocoa futures on the Intercontinental Exchange (ICE) was 4.95 million tons, exceeding production by 750,000 tons.
In November 2011, global sales of chocolate confectionery crossed US$100 billion for the first time, with consumer demand for chocolate anticipated to continue increasing and possibly outstripping supply.
Cocoa processing market is estimated at $200 billion.
Getting started with cocoa export business
Next we’ll look at the three steps to take to get started as a cocoa exporter
Set up your business plan
Promote your business
Fulfilling your orders.
Setup your business plan
A key component in planning your business is knowing your strengths and weaknesses.
You should look at what you’re capable of as against what you’re incapable in terms of capital, resources, reach etc. This would give you an idea on how to go about structuring your plan to meet your business goals.
In your business plan questions you want clear answers to are:
How do I get customers?
How am I going to maintain supply to my customers?
Am I owning my own farm or leasing or partnering smallholder farmers?
Who are my key partners to help me achieve my supplies and fulfill my orders?
Which technology can I leverage to achieve my goals?
How am I advertising my product? What methods would I be employing? If we’re talking about online advertising, should it be Paid ads vs free ads, or combination of both?
Bottom line? To stay profitable, what strategy would best work for you based on what you have vs what you don’t have?
Remember, you’re dealing with international buyers, they’d be most likely be sophisticated and your business has to be well planned and presented, backed with the right principles of course.
If everything is well planned, you can achieve success even without spending too much capital. Also remember, cocoa business is evergreen, one cocoa tree can last for 30 years, producing constantly once it’s matured. So the initial cost might feel or look too much, it gets better over time with good rewards to follow.
Now that your well-thought-through business plan is ready, the next step is to
Register your business with appropriate governing bodies.
Register your business
Exportation business is a serious endeavor. A lot of risks are involved, so anything to help reduce the risk from the side of your buyers should be encouraged to win them over.
That’s why it is necessary to register your business with all necessary bodies.
Registering with these organizations is necessary. Some of them would give you necessary support like low interest loans, trade information and support to help your business grow.
The good part of this is most of these bodies are online, so you can start from there.
Start your business registration online by clicking on the following links:
CAC (Corporate Affairs Commission) – Start the registration of your business online. Give your business credibility and visibility by registering your business as a legitimate business in Nigeria because international buyers would mostly do business with verified businesses. Start here: https://pre.cac.gov.ng/register/new
Nigerian Export Promotion Council (NEPC)
The NEPC rules over all other apex institutions involved in the promotion, development, and diversification of exports in Nigeria.
Their activities involve:
Co-ordinating and facilitating export development in the country
Facilitating export promotion activities
Working with international trade agencies on cooperation and capacity building.
Organization of Women in International Trade (OWIT) Nigeria
Awesome for woman into international trade, you can join them and benefit a lot from partnering with international and local businesses, to getting low cost loans, and other wonderful benefits. You can read more on them and become a member here: https://owitnigeria.org/join-us/
Before we move ahead, let’s try to do a rough sketch of what it’d cost you to setup your cocoa export business.
Land(1 hectare) – N4M
Warehouse & drying facility- N2M
Laptop/desktop computer- N200,000
Cocoa seedlings – N210,000
Farm clearing and preparation- N30,000
Planting and workmanship- N100,000
Website building – N100,000
Promotion cost – N200,000
Registrations – N50,000
Packaging – N500,000
Transportation – N3M
Total = N9.34M
Monthly running cost estimation
Internet subscription – N10,000
Webpage maintenance – N30,000
Promotion costs – N200,000
Calls and communications-N5000
Office space- N10,000
Miscellaneous – N10,000
Other costs to consider is for custom brokerage and freight forwarding. Their costs arent fixed as it depends on several factors. But ensure to include them as variable costs.
If you’ve already set the ground running; you have your farm, business plan, registrations, and everything we’ve talked about so far up until now, I’m sure all you want is to be bombarded with calls from buyers, placing orders, and business booming.
Promote your cocoa business Online
How do you get international buyers for your cocoa beans?
There are several ways. But we just cut to the chase and focus on our preferred way- the internet.
The internet is your fastest and most cost effective way to reach foreign buyers. It presents a mouth-watering prospect such that if gotten right, you can build an awesome, and well fulfilling business for yourself.
Some Facts about the internet
More than 60% of the world’s population use the internet, that amounts to about 4.72billion people around the world [datareportal].
According to Netcraft, there are over 1 billion active sites on the web today and it’s number keeps changing every second.[Netcraft]
According to MOZ, Everyday, 77 percent of people use google at least three times to search for things online.
54 percent of social users research products using social media [globalwebindex].
You can get your buyers online because people are using the internet to search for things to buy. The internet is one huge community, get plugged in.
What’s so beautiful is you don’t need to be a software guru to own and manage a website. You can outsource it.
Outsourcing is a fantastic way to leverage other people’s skills especially on something you’re not so good at, while you focus on other things.
To get buyers on the internet, you’d need an online presence. Your online presence just asks the question how easy and often are you found online? So to get started, here’s what you must do:
Build a website/online store
Manage the website
Promote your website
What you need to build and run a website
Website vs online store
Think of your website like a well prepared business card, only that it has much more details in it, and your online store is a brochure that contains your products and price listing.
If for you, the internet is a vital avenue to getting buyers then you might be doing yourself a disservice by choosing to use one over the other.
It’s all about online presence. Let your business be out there as possible, given it’s within your budget.
You own the website
You’re renting a website within another person’s/company’s website
It can take lots of time and effort for buyers to see your products on google search.
It takes little time to get customers to see your products on google search as your store is within a bigger website that’s well ranked on google search engine.
It would cost you lots of time and effort to build your brand
It can help you build your brand faster online
If done expertly, you might spend little and get free buyers and customers
It can be capital intensive, however if done properly, is worth every penny spent.
Table to compare having a stand-alone website vs running online marketplace store
In promoting your website and business online, there are two methods:
You can get buyers without having to spend any money, this method can take time but is really worth the while if done properly. The best approach to this is giving something of value, and getting traffic as reward. You’d be focusing on ranking for relevant keywords that lead people to clicking your link to your website or web store. You then sell your products to the visitors of your website.
But it’s not so easy, because there are billions of websites out there competing for your prospects’ attention, hence the need to tilt the odds in your favour by ranking at least on the first page of searches relevant to your business.
Remember, the aim is to make the first page of google search.
According to this survey conducted by MOZ, 75 percent respondents preferred to click one of the top two results. They’d prefer to scan through the first search page to find relevant answers to their queries, or link to other results from page one.
Another interesting findings from the survey was respondents largely preferred to click on organic search results than click on advertisement.
This is another route to making first page on relevant keywords on search engines. Advertisers bid on keywords and they pay per click once browsers get to your website through your link from the search page.
This requires you to have a good budget, and expertise to get good results. Results can be instant if done expertly.
you can advertise on:
Search engines like Google, and Yahoo have Google ads, and Yahoo ads. Advertisers bid for keywords, they pay per click once there’s a click on your link to your website or online store.
Other people’s website
You, or advertisers like Google and Yahoo can pay owners of particular websites to advertise on their platform. Owners of websites are then paid each time there’s a view on your ads displayed on that website. This is called pay per impression or pay per view.
Social media helps you connect with people on a personal level. You can really make a good impression of your business by having a good social media presence that connects with the people.
Take clean pictures, engage in quality conversations on relevant topics, showcase your expertise as a thought leader in your business.
Facts about social media
There’s been a staggering number of social media users in the world. Reports show there are over 3.5 billion active users.[emarsys, 2019]
Statistics show that one person spends 3 hours on average on social media everyday.
Your task is to maintain steady flow of buyers while also building a brand people can trust through good farming practices and quality online presence.
Make sure you understand the nitty-gritty of running an online ads campaign, if you don’t, hire someone or outsource professionals to run for you.
In the case of advertising with a particular website, make sure you do your findings on the website to ensure their kind of visitors are the kind who can buy your product.
Your website should contain the following:
Vision and mission statements and a little bit about you. Eg when it was founded, your partners, your present customers, etc.
Description of your business values
Your products and production capacity
Email and contact information
Order fulfillment and getting paid
To export your goods, most exporters make use of freight forwarders, and custom brokers as they make lives easy for them. These are specialists in moving goods to different places in the world, and also handling of custom related issues.
Ensure your cocoa is exported in well ventilated cool, and dry conditions to ensure the beans can arrive at buyer’s destination without blemish.
Never agree on any agreements until you’ve agreed on payment method
Depending on your negotiation skills, your buyer can bear part of the shipping cost. Of course this would only work if there’s the element of trust in the equation.
If the relationship is not strong enough, buyers would most likely prefer a POD (payment on delivery) arrangement. If that be the case, it’s not a bad idea to request the buyer make down payment to show they’re serious about doing business with you.
In finding a freight forwarder, you should look out for those with good experience in shipping cocoa to your buyer’s location.
In your agreement with your buyer, ensure pricing is factored in. In Nigeria, the futures commodity exchange is still a concept the government is looking to support exportation in the country. Futures contracts can help buyers and sellers mitigate risk that occurs due to currency fluctuation. So you can agree with your buyer to peg your commodity price based on current global price such that if it changes in the future, you don’t incur loss.
Know your rights as an exporter to any country. It’s possible some of these foreign buyers can take you for a ride if you don’t know what’s within your rights as an exporter to their country, issues like what happens if your buyer decides to cancel their order last minute? Surely you shouldn’t bear the loss for that.
Now that we’ve come to the end of this guide, we know not everything on this post can be assimilate once, so you can bookmark this and come back to it in the future. Feel free to drop your questions and comments on this topic.