Nigerian Business Opportunity: Pounded Yam Production and Processing for Exports to Africans Abroad
Pounded Yam
is one of Nigeria’s best loved staples and even Nigerians living abroad love to
enjoy this meal with a variety of local soups. Nigerians abroad are not left
out in fact they are the biggest fans of local Nigerian delicacies as they don’t
mind spending more to enjoy our local delicacies even while abroad. Nigerians
in the diaspora have a strong emotional attachment to their motherland and miss
their country and all the memories they have. The main ingredient for making
commercial pounded yam flour is yam which is abundant in Nigeria grown in most
of the southern and middle belt states of Nigeria. Pounded Yam can be eaten
with Egusi, Ogbonno, bitter leaf soup, vegetable soup, okra and many other
local soups.
The Opportunity (Local and
International demand)
According to
the International Institute for Tropical Agriculture (IITA, Ibadan) in a 2001
food consumption survey among Nigerian households, Yam is one of the most
widely consumed staple after maize, cassava and rice although one of the most
expensive. It is a major source of energy in diet of Nigerian families, doesn’t
spoil quickly and also occupies a very symbolic position socio-culturally among
diverse ethnic groups in Nigeria with the New Yam festival serving as a
standard for assessing farming seasons and crop yield. All this points to the
fact that there is high demand for it locally, however the international market
is where the opportunity seems even greater and there are various reasons for
this such as;
·
Low
competition (Only two companies as of 2014 are into this business and they
haven’t adequately captured the market).
·
High
demand (Over 17 million Nigerians live abroad in over 40 countries in Europe,
Asia, North America and Africa). The highest demand is from Nigerians in
Holland, China, India, US, UK, Spain and South Africa.
·
High
profit Margin (Up to 100% profit margin from sales)
Target Market Analysis
Total
Population of Nigerians in Main Market Regions 2014 estimates is put at 10,850,000.
Sources for these figures are; the deputy Nigerian Ambassador to the United
States at a conference for promoting investment in Nigeria mentioned that at
least 5 million Nigerians live in the US in 2013. The Guardian Newspaper on 16th
November 2014 reported the US, UK, South Africa, Europe and Asia as Nigeria’s
leading overseas destinations with the US accounting for 31% followed by Europe
at 21% and South Africa with 5%.
Market
Region
|
United
States
|
United
Kingdom
|
South
Africa
|
China
|
Dubai
|
West
Africa
|
Estimated
Population
|
5,000,000+
|
3,000,000+
|
900,000+
|
850,000+
|
800,000+
|
300,000+
|
Sources: Nigerian Embassy in New
York, Guardian Newspaper, Chinatravelguide.com, National Population Commission
·
With
these figures we estimate the potential market size to be NB: I estimate 1$ = N200
Market
|
10,850,000
|
Total
market Population
|
1,758,000
|
Monthly
Spending Pool
|
$2,500
|
Average
Household Monthly Income
|
$5,000
|
Disposable
Income on Edibles
|
$250
|
Households
|
875,000
|
Estimated
Potential Market Value
|
$32,200,000 (
|
Startup Requirements
This business isn’t easy to start up because of the capital required to set it
up which is N49,490,000 and would be
used to acquire such things as machinery, rent warehouse, working capital,
purchase delivery van and other expenses which are available in a detailed
business plan.
Conclusion
This
business is a cash cow and anyone looking to go into it should consider the
challenges and threats which may cause the business to fail. The business is
highly profitable but if you lack required marketing, operational and managerial
knowledge you won’t be able to exploit this opportunity fully.
Need a comprehensive business plan on
commercial pounded yam production or any other business plan for that matter?
Give me a call: 0803 206 4106 and I’ll hook you up with a reliable business
plan you can take to the bank.
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