This is a good list of possible businesses Nigerian entrepreneurs could delve into in the promising year of 2017 as the country moves for the self-sustainability of the local economy.
Nigerians enter 2017 today with high expectations, resolutions and top targets. No one contemplates repeating the mistakes and missteps of 2016, which was full of confusion and indecision.
The out-gone year was, perhaps, the most challenging period in the history of Nigerian businesses because it was characterised by policy flip-flops and poor market cohesion.
In spite of 2016 challenges, one word stands tall in 2017: Opportunity.
This year, like other years gone by, presents a number of opportunities as well as challenges. Some businesses are bound to struggle while others will thrive. Some might die while many would still be birthed. However, Nigerians are encouraged to tap into a number of opportunities that abound locally. Importation is highly discouraged this year owing to the persisting dollar crunch and the possibility that the present administration will put more policies in place to discourage dollar outflows and import.
Donald Todrin, CEO of Second Wind Consultants, a debt workout and turnaround consultant firm in the United States, said in a period of recession many people, especially business owners, are bound to panic.
“But there’s an alternative to panicking. We are confronting change, and change is an opportunity for advances. Now you have the choice to take advantage of change or allow yourself to be buried by it,” Todrin said. In its characteristic manner, therefore, BDSUNDAY has sought out profitable and sustainable businesses Nigerians can do this year.
First on the list of what Nigerians can do this year is yoghurt production. Yoghurt production is a neglected area, but statistics show that 98 percent of Nigeria’s dairy needs, including milk, are imported into Nigeria.
According to Aliko Dangote, president of Dangote Group, who is also a dairy maker, only 2 percent of the country’s dairy needs are met by local companies. Official data show that $1 million worth of milk is imported into the country every day. With dollar scarcity and roadblocks to importation in the country, yoghurt production is a sure bet.
Yoghurt is a healthy source of milk, and capacity to produce a low-sugar brand for the aged and diabetic as well as a moderately sugar type for other classes is an advantage.
Producing yoghurt could cost between N2 million and N10 million, depending on the type of equipment used and their sources. Yoghurt production requires major machinery such as motorised stainless steel mixer, incubator, pasteuriser, filling machine, UV Lamp, transfer pumps, PH Meter, shrink wrapper and weighing machine. Some of the machines are imported into the country, but many of them are fabricated locally by the Federal Institute of Industrial Research Oshodi in Lagos or Projects Development Institute Enugu (PRODA). Local fabricators can also help.
According to FIIRO, return on investment is 46.1 percent, while return on equity can go as high as 115 percent. Payback period is 34 months and 19 days, while break-even point is 51.8 percent.
Next on the list is cashew processing. If you do not have a cassava farm, get one. However, you can liaise with a cashew farmer who will supply you with raw cashew nuts for onward processing. Export of cashew is now one big business, as Vietnam, world largest cashew exporter, is currently experiencing its worst drought in a century.
Cashew sells like cakes in the United States, India, Spain and many parts of Europe. Apart from helping to maintain a healthy heart and bones, cashew also helps in weight loss.
Cashew nuts are used in producing chemicals, paints, varnishes, insecticides and fungicides, electrical conductress, and several types of oil.
Cashew exporters in Nigeria made $250 million in 2015 and $300 million in 2016, according to Tola Faseru, president, National Cashew Association of Nigeria (NCAN), who disclosed this to journalists at the Annual Cashew Logistics meeting held in Lagos recently.
If you wish to process for the local or international market, then be ready to procure machines such as boiler, sheller or cracker, dryer, and packaging machine. Two good things about cashew are that its return on investment is as high as 55 percent and its payback time is just 12 months, say experts.
Another business to watch in 2017 is piggery. Experts believe Nigerians are not tapping into the opportunity in this area because of ignorance and poor perception about pigs.
Apart from a breeding ground, which should be large enough, it is easy to start a piggery with N500,000 to N1 million. To start a piggery, you need healthy piglets, standard pens, quality feed and three to six workers, depending on the number of piglets available.
The biggest thing about pigs is that they reproduce in large numbers. Pigs can go between N15,000 and N40,000 depending on their size and weight, and one pig can easily reproduce up to 15 to 20 piglets. This is its biggest advantage. Secondly, pigs can survive in any environment.
Pigs are in high demand in China, Japan, India, Mexico, Canada and many parts of Asia. In 2015, United States exported pork (pig meat) worth $4 billion; Germany $4 billion; Spain $3 billion, among others.
Apart from pork, Nigeria is still waiting for someone that will produce adhesives used by leather shoe and bag manufacturers. Aba, located in Abia State, has between 50,000 and 100,000 shoe, bag and trunk makers. This does not include hundreds of thousands of shoe-makers in Lagos, Kano, Kaduna and Onitsha. Many of these shoe-makers run to China to buy adhesives because there is yet no known company that produces good adhesives to satisfy them right now.
Incidentally, research shows that adhesives can be produced from cassava (starch), which Nigeria happens to be the world’s biggest producer. Chinese adhesives are not good enough when compared with Dutch, Spanish or Italian, shoe-makers told BDSUNDAY. Currently, these shoe-makers cannot even find dollars to import these adhesives, showing that there is a huge potential for someone producing adhesives in the country.
Nigerian middle and the rich classes are looking for committed artisans and construction workers. Many of the local artisans are considered not serious enough and are accused of being unprofessional in their conduct. This pushes many Nigerian middle and rich class individuals, including construction companies, into Ghana, Togo, Cameroon, and other neighbours to get serious and committed staff when building their houses.
What this means is that serious-minded Nigerians can go into this business as consultants, who will now search out committed Nigerians in rural areas to take these jobs. This is money-spinning in many African countries and even Europe and is an opportunity here, given the attitude of Nigerian artisans.
On the other hand, artisans that are committed to their work are likely to have more people knocking on their doors this year, according to Ojere Imere, a construction expert.
“This is the reality of the situation. It’s not just in construction. It’s also found in the textile and fashion industry, in the electrical and electronics,” said Imere in a telephone interview.
Fruit juice production
The fruit juice production is a honey pot. Fruit juice is made from orange, pineapple, guava, mango, as well as additives such as sodium benzoate, sweeteners, and citric acid, among others.
The rule set by Nigerian authorities is that a fruit juice should contain 40 percent of natural fruit juice. This means that if you are producing pineapple juice, ensure it contains 40 percent of natural pineapple.
The Manufacturers Association of Nigeria (MAN) estimates that Nigeria imports N165 billion worth of fruit juice every year.
In a paper presented at a workshop organised by the Raw Materials Research and Development Council (RMRDC) in Owerri in April 2016, Frank Jacobs, president of MAN, said in spite of the high rate of fruit production and a thriving juice market, the country imported fruits concentrates.
Apart from production site and generating plant, someone with N3 million to N10 million can start a small-scale fruit juice company, depending on the litres that will be produced, according to feasibility studies.
Machinery needed to start includes juice extractor, homogeniser, pasteuriser, hydrolyser, filling machine and holding tank.
One big bang about fruit juice is that if you cannot set up a production plant, you can get involved in the value chain by supplying oranges, pineapples, guava and other fruit to companies like Chi Limited and Coca-Cola, among others.
Many fruit juice makers in Nigeria go to the extent of importing fruit to satisfy demand for their products. Planting oranges, guava and pineapples is the best bet in this case, say experts.