9 ways to profit from the shea butter Value Chain in Nigeria
9 Ways To Profit From The Shea Butter Value Chain in Nigeria Vitellaria Paradoxa or the Shea tree as it is commonly known is an oak like tree that is native to the Sahel savanna region of West Africa. A member of the Sapotaceae (soapberry) family, the tree is known to be planted for several uses. One of such is traditional agroforestry systems as regards erosion control. Another is for the benefits that its fruit produces the World famous shea butter oil which is used in many aspects of skin care, traditionally to treat ailments such as arthritis and also increasingly in the production of chocolate.
Shea butter is a very desirable cash crop as the above mentioned uses are just some of the many uses that are attributed to it.
The wood from the Shea tree is also used as charcoal and in some cases for traditional splints in traditional bone setting. The oil is also used in frying and the production of fried foods in the Sahel where other edible oils are not readily available.
In Nigeria, Shea is one cash crop that many people do not realize that has enormous value as a cash crop. Shea trading alone to foreign countries is one the increase due to the fact that there is an ever increasing demand of the crop. The following points below depict the various ways, means and methods through which one can profit from the Shea Value Chain in Nigeria.
Harvesting of the nuts: Due to the fact that the Shea nuts are usually harvested between June to august, this is a great time for anyone who does not have much capital but is willing and able to be able to harvest the nuts which are world famous for a whole number of reasons.
This may not bring the millions that many youths want to make in one day without working hard for it but it will indeed give you steady income and expose you to the rudiments of the business.
Transportation of the nuts: Transportation of the Shea nuts from the harvest site to their storage facilities is another unique way to profit from the Shea butter Value Chain. Transportation in these areas of Nigeria is known to be very hard to come by due to the distance between the villages and the areas where these Shea trees are known to grow. Transportation when adequately provided can even allow for a further exploitation of the harvest season thereby increasing the harvests for the Shea farmers.
Mechanization of the drying process: The drying of the Shea nuts are largely performed using the assistance of the sun. Sun drying has always been the way to get things dry in Africa. However in order to take advantage of the economies of scale which could be derived from the production of she butter, the use of mechanical dryers could also serve as a boost to the local value chain and spur those who gather and pick the fruits to do so in a much larger quantity due to the fact that mechanization of the drying has created a larger pool.
Local trading of the fruit: Local trading of the shea butter fruit is another way to profit from the Shea butter value chain in Nigeria. This is because the local traders would be able to meet up with local demand of the nuts. And most of the buyers of the Shea nuts are local producers of the butter who want to produce the shea butter on a small scale. And these cottage industries which produce the shea butter are many but exist independently on a largely subsistence basis. However the local trading to such provides a unique opportunity for those who may not have the capital to proceed into the business with huge amounts of money.
Local production on a subsistence basis: If you do not have the large amount of money that may be needed to start the production of the shea butter on a large scale, you can decide to start producing it on a small scale using labor intensive techniques. This method of the production of the shea butter however is very slow and involves a lot of energy. But one thing is sure. The business that you have envisioned for yourself has started! Local production of the Shea butter is an entry point for anybody who has the desire to profit from the shea butter value chain but does not have the resources for an enterprise investment.
Local production of the shea butter using solvents: This is an intermediate method of extracting the shea butter from the nuts. It can be used by those who have a partial scientific understanding on the effects of heated solvents on oils and other lipids. This of course may not fully automate the process of shea butter production but will actually allow for a faster rate of extraction than the traditional methods which are more rudimentary in nature. This will also allow for the creation of indigenous technologies which can make the entrepreneur to have some solid footing when it comes to the adaptation of technologies for profits.
Mechanical extraction of the shea butter from the nuts: At this level, extraction of the shea butter is done on an industrial basis. This is for those who indeed have the resources to be able to perform such extractions on a large scale. This provides a huge opportunity to make profits from the shea butter value chain here in Nigeria as the population is a very large one and domestic demand in a nation such as this is almost never met.
Transformation of the shea butter into products: The usage of the butter into products which can be domestically in use are a very unique way to profit from the shea butter value chain in Nigeria. The unique uses of shea butter cannot be ignored and would-be industrialists would do well if they can harness such an opportunity.
Exports of the shea butter to target global markets: With the right amount of capital, and a working knowledge of the global markets and how best they work, exports of the shea butter can be very lucrative and also profitable. Also, the exports of the dried nuts can prove to be more lucrative than the exports of the processed butter. This is because the nuts are in preprocessed form and many industries would also prefer to process the nuts according to their standards in their respective jurisdictions of operation. Exports require a huge investment of capital but the returns of such capital investments are always sure.
Most people may not realize this, but shea butter is a millionaire make anytime and every time. It just depends on the individual who is willing to take the bull by the horns and match the associated risks with the expected results so as to produce a profit at the end of the day. The higher the risk, the higher the reward. Do you have any other ways through which people can profit from the she butter value chain in Nigeria? Are you making money from the business? Please feel free to share! Let us know in the comments below!
Serial Entrepreneur - International Business Planning Consultant - Speaker - Trainer - Author - Blogger - Network Marketing professional.
- 2018 SME Business Trainer and Coaching Advisor at GIZ for SME Loop.
- 2018 YALI RLC Online Cohort 9
- 2017 Fellow, Inspire Africa Train-the-Trainer Entrepreneurship programme sponsored by US Consulate Lagos and the Dickey Center, U.S.A.
- 2016 Fellow, Tony Elumelu Foundation Entrepreneurship Programme
- 2015 Top 50 Innovative Entrepreneurs, BET5 by Diamond Bank and EDC, PAU.
He is an alumnus of Enterprise Development Centre (EDC) of the Lagos Business School (LBS), Pan-Atlantic University (PAU). Through his training, mentoring, speaking and coaching programmes, he has empowered many young people over the years to start and grow their own business, build wealth, create multiple streams of income and achieve financial independence.
- He is a Certified Trainer in Design Thinking by the U.S Consulate, Lagos and the inspire Africa Entrepreneurship Institute.
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