Cassava Chips Export Business

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Minister of Agriculture and Rural Development, Akinwumi Adesina, said recently in Abuja that Nigeria had secured a contract to supply China with 3.2 million tonnes of dry cassava chips to China. This is not all about government talk but about you because when the time comes for the execution of this contract, it would not be ghosts that would supply the chips to China but stakeholders in the cassava industry in Nigeria.

 

Adesina specifically stated that Nigerian cassava farmers and processors stand to make as much as $800 million (N128 billion) from the contract. He added that arrangements were ongoing with the African Import/Export Bank to finance the processors of the product with a loan facility of $40 million (N632m) to meet the terms of the contract. “We are focusing on Cassava chips for export, production of chips for livestock industry, starch, sweeteners, and ethanol”, Mr Adesina said, just as he chipped in that a cassava revolution was on – this time for real.

Dr_Adesina_Agricultture_Minister.fw
Dr. Akinwunmi Ayo Adesina-Federal Minister of Agriculture.

Nigeria is the world’s second largest producer of cassava with a targeted production of 900,000 tonnes by 2015. This write-up shows you how you can be a part of the cassava revolution and become significantly wealthy this year by getting involved with this crop that has the potential to give you up to 150 percent return on investment.

 

About Cassava Chips
Mr. Tunji Afuwape is the Chief Executive Officer of 21st Strategies Nig. Ltd. He says, “Cassava Chips are non fermented cylindrically shaped products of about 3-5mm in diameter obtained from freshly harvested cassava roots. They are now gaining prominence in Nigeria and all over the world as a viable ingredient for compounding animal feeds for pigs, dairy cattle, poultry, fish, etc. They are accepted because cassava is just like feed grains which consist almost entirely of starch and are therefore easy to digest.

Mr. Tunji Afunwape
Mr. Tunji Afunwape

 

“Many feeding experiments have shown that cassava provides good quality carbohydrates which may be substituted for maize or barley. It cannot be used as sole feed stuff because of its deficiency in protein and vitamins; it must therefore be supplemented by other feeds that are rich in these elements. Cassava chips are also widely used for the production of ethanol which is gaining much acceptance as a bio-fuel because of its safer and more ecological friendly qualities. Cassava chips are also called Tapioca chips”.

 

A source at the Federal Institute of Industrial Research Oshodi {FIIRO} who spoke on the condition of anonymity says, “Cassava is one of the most efficient carbohydrates-producing crops but it is a highly perishable commodity, with a post-harvest life of less than 72 hours. This is because once cassava is harvested the roots undergo rapid physiological change resulting in quality deterioration, that is if you fail to process it within 24 hours. So if you dry fresh cassava or process it into chips and pellets you are minimizing quantitative and qualitative loss of this commodity, because due to storage problem after harvesting, about 20-30% of this commodity is lost”.

 

Types Of Cassava Chips
Afuwape says, “There are two types of cassava chips; food grade and animal grade. Food grade are the ones used in pharmaceutical companies for drugs and it is in high demand in countries like China, Japan, Israel and other Asian countries.  They are very expensive but Nigerians have not been able to export the food grade because of the high cost involved and the technicalities involved meeting up with the specifications of the international standard.

 

“The animal grade is what is dealt with basically in Nigeria. Once you remove the skin and cut in four or five slices or even more, you can sell like that or further grind into powder depending on the specification of the buyer. “When you grind and process about three tonnes of cassava it would give about 1.5 tonnes of dry cassava chips”.

 

The Demand For Chips
“The FIIRO source says, “Local feed producers are now placing orders for chips at an unprecedented rate because they have suddenly realized it’s efficacy in compounding feeds. About three ethanol plants are coming up soon in the country and that will further increase the demand for chips. China imports enormous quantities of chips and starch and they look up to Nigeria as the world’s largest producer of Cassava for their supplies.

 

“The EU Animal Feeds Industry is the biggest consumer and importer of the product because of their large animal husbandry industry. They imported about 6.9million tones of Cassava products in 2000. The composition of feed compound varies according to the animal (cattle, pig, poultry) as well as to the kind of production (dairy, meat, or egg). The maximum content of Cassava products in compound feedstuff is officially set in many countries.

 

“For instance, in Germany feedstuff for pigs must contain between 10-40 percent Cassava while that of cattle is 20-25 and poultry 10-25 percent”.

 

Lucrativeness Of Cassava Chips Business
Afuwape says, “Cassava chips business is very lucrative but you need the technical knowhow. For example, in the area of drying, cassava is meant to be dried on a very clean surface. If otherwise, it would pollute the cassava and also change its colour. That is why for a state like Taraba, they dry their cassava chips on the mountain because of the mountains’ ability to absorb heat. “To make money from cassava, you can supply to animal feeds companies. A lot of animal feeds companies demand for dry cassava chips to add up to their feeds. And a lot of these companies issue LPOs to individuals to supply them with these dry cassava chips.

 

“You can make about N5,000 to N70,000 per tonne depending on how you negotiate. And most times, they request for a trailer load which is 30 tonnes. So, if you are making N10,000 per tonne, that is N300,000 per trailer.”

 

The FIIRO source estimates that if production goes on for 255 days per year at 8 hrs/day and 1 ton/hr, one would have 2,040 tons of raw chips. The source adds that if the project operates on two shifts, the profit will reach N9.62m on an investment of N2.8. “The return on assets employed is 170.8 percent which is very good. It is a lucrative venture and is highly recommended for SMEs”, the source says.
Processing Of Cassava Into Chips And Pellets

 

Afuwape says it involves harvesting, washing/peeling, chipping, drying, milling, pelletizing and packaging. “The production of chips is an intermediate stage in the production of pellets. There is very little difference in the technologies used at different scales of chip and pellet production. The main difference is in sun-drying and mechanical drying. Chips can be produced by very simple techniques in the household or village as well as on a large mechanized scale.

 

“The first step can be washing and peeling, depending on the quality of the harvested roots. The amount of soil that passes into the final product is largely determined by soil type and weather conditions during harvesting; wet clay soils tend to adhere to the roots. After washing, the roots are dipped in a three percent lime solution to neutralize the acid juice and prevent deterioration. The roots are usually cleaned manually in concrete tanks or mechanically in troughs with agitating paddles on a horizontal shaft.

 

“The next process is chipping. As is common in household processing, this is done by hand or by a simple machine which consists of a driven disc with radial chipping slots fitted with cutting blades. There are two common types, the Malaysian and the Thai models. The Malaysian type consists of a heavy rotating circular steel plate about 12 mm thick and 1m in diameter to which six blades are attached. The blade consists of a 1-1.5 mm steel plate that is corrugated at the cutting edge. The chipping wheels are usually mounted in wooden frames incorporating feed hoppers and driven by petrol, diesel, kerosene or electric motors. The Thai model consists of a thin circular plate made from the ends of a 200-litre oil drum into which cutting edges are chiseled. These crude cutting plates are usually mounted on a fairly standard machine, frequently equipped with small wheels for mobility and a short elevator that deposits the chipped roots into hand carts. In Nigeria, manually operated chippers have been designed and fabricated by the Rural Agro-industrial Development Services (RAIDS) and International Institute of Tropical Agriculture’s {IITA’s} Postharvest Unit. The length of the chips depend on the angle of contact of the roots with the blade. The sizes of the chips vary but generally they are 36 mm thick, 6-10 mm wide, 100-250 mm long.

 

“The next operation is drying. Drying methods can be classified according to the technological level and cost. Natural drying, one of the methods, is done on cement floors which are sometimes painted black for better absorption of radiant energy or on trays for artificial drying. The factors that affect cassava drying time are the geometry (shape and size) of the cassava chips, the chip loading per unit drying area, air speed, temperature, humidity, radiation, as well as dry matter content of the fresh chips. In artificial heat dryers, all these parameters can be optimized to minimize the drying time and guarantee a high quality product. In natural drying methods, in which the heat source is solar radiation, air speed, temperature, and humidity depend on the environmental conditions, and very little control can be exerted over them. In addition, chips dried on trays are better in appearance and more uniformly dried than those dried on concrete floors.”

 

Artificial Dryers
“Three types of artificial dryers are commonly used for cassava drying: Static bed dryer, moving bed dryers and rotary dryers. They can be gotten at RAIDS or at IITA. These two agencies can also direct someone to good local fabricators of all the machines used in cassava chips production.

 

“After drying, the cassava chips are packed in either jute or polyethylene bags, or processed further into pellets. The commercial purpose of pelletizing cassava products is to decrease the volume by 25-40 percent to produce a uniform product, to facilitate bulk handling during transportation, loading and reloading and to eliminate the dustiness of the product. Pelletizing contributes significantly to the density, durability, and quality of the product.

 

Factors affecting the quality of pellets are the composition of the material, protein, starch, fiber, and fat content. Protein-rich materials plasticize when heated and act as a binder to produce strong pellets. Starches gelatinize when heated in the presence of water and also act as binder to produce strong pellets. Fibers are difficult to compress but when they are present in sufficiently fine strands in the pellet, they give toughness to the product. Fats act as lubricants, resulting in easy pressing and therefore high capacity and lower power consumption”.

 

Anjorin says, “Processing of cassava into chips can be done manually or mechanically, which is making use of machines. But take note: the best quality can be gotten through manual production – starting from harvesting to peeling to washing and to slicing (chipping). But as you know, manual production simply means quantity will be lesser.
“The best packaging is usually through the use of polythene bags. In some cases, buyers may ask for “Nude Packaging” which means after processing, you just pour directly into container without putting in sacks or anything and this type of packaging will show us that the products are going to be used for animal feed”.

 

The FIIRO source says, “To successfully process the cassava chips you will have to be in the farm. What that means is that you will have to have your factory for processing close to the farm because it a highly perishable crop. Now the processes for cassava chips production is as follow: Raw cassava tubers-washing-peeling-washing again- chipping-drying-pre packaging-treatment-bagging then finally you will have bagged cassava chips. This happens in a chain and all these processes must be done within 72 hours.

 

“Still on processing, sorting and weighing, separating the good cassava from the bad once, hand picking the deteriorated ones, removing the woody stems and cutting into two the excessively large tubers. In peeling the cassava you have to take extra care to ensure that the peeled cassava is free from any dirt; then you wash thoroughly in an aluminum bath so that mud and extraneous materials are totally removed.

 

“Chipping is done with machines, and then the drying is done according to technological level and cost. Natural drying involves drying your chips on cemented floors that are painted black for better absorption of radiated solar energy or you go for the artificial drying using the cabinet dryer. Then the packaging is finally done in polythene bags.”

 

Specifications
Afuwape says, “Most buyers request you grind into powder form. As a supplier, you need to get the specification of your buyer. Majorly, each buyer has their own specification”.

 

Anjorin says, “Well, it depends on the user – every user has something in mind, like using it for animal feed or conversion into some other items like starch or flour. But in general, the slicing always comes in units – like one centimeter thick, five centimeter wide. It always comes in thickness and diameter. So, the buyer or user may place such request. At the same time, they also talk about the moisture content – that is how dry and if properly extracted, what amount of water can we still get after you have done your total dry; and majorly, people don’t want anything less than, maybe two percent moisture – that is 98 percent dryness.

 

“Another challenge in that area is, if we don’t have machine to dry, do we have weather, climate or atmospheric condition to support to give us that accurate dryness of 98 percent? So, that is why we cannot overemphasize the use of machine.

 

“We have species of cassava, majorly two, of which I may not be able to give their botanical names now; but they are based on their tastes. One is a bit bitter, while the other is sweet – both of them are in use and acceptable in the international market. It just depends on the country. Like in China, they accept both, while other countries may specify”.

 

Quoting from cassava chips specification by the Standard Organization of Nigeria, the FIIRO source gave the following list:
Moisture % 10.0
Ash content % 3.0
Crude fiber % 3.0
Starch content % 75 min
Total acidity % 1.0
Hydrocyanic % 10
Iron % 22.0
Lead % 1.0
Copper % 20.0
Zinc % 50.0
Arsenic % 0.1
Mercury % 0.1

 

Process Involved In Exportation Of Cassava Chips
Afuwape says, “When the Chinese order for dry cassava chips, they issue Letters of Credit. A Letter of Credit is just like money in a show glass. They have paid the money into your account but until you supply, you can’t claim the money. So, you can make money as a local supplier and you can make money as an exporter”.

 

Local Supply
Mr. Sunday Anjorin is the Managing Director and CEO of Anjorin & Atanda Investment Ltd. He says, “The local supply depends on the areas, what is required and on the individual interest. Some may prefer the use of machine dry or air dry, as this determines the types of market you are targeting – usually, local suppliers accept air dry. With this, it means the colour will be changed, but whatever comes out of that will be accepted by the buyer. But when it is going to the international market, you use machine dry – that means the white colour will still be retained”.

 

Sourcing For Cassava
Afuwape says, “Cassava can be found in every state of the country but the major producers are the western states such as Oyo and Ogun States. Then in the North, we have Kwara, Kano and Taraba States”.
Anjorin says, “You can source for cassava anywhere – it should not be a problem at all, here in Nigeria. You can plant it or go for it from where they are planted – mostly the major stakeholders in the industry have plantations; even if you don’t have plantation, you can get the quantity you want from the local farmers”.

 

How Nigerian Exporters Can Get Buyers
Afuwape says, “They can get buyers through consultants who are already in the trade. They can get buyers through trade websites. There are several trade sites online; they can register either as a paid member or as a field member.  They can also get buyers through The Trade and Commerce Department of the Chinese Embassy.

 

“But if I must say, getting buyer is not the most important thing but getting the right specifications”.
The FIIRO source says, “The major Cassava importing countries are: China, Japan, South Korea, Indonesia, and United States. Other countries that also import very significant quantities include EU countries like the Netherlands, Spain, Belgium and Luxembourg. American companies are now making very spirited enquiries for Nigerian chips and starch for their ethanol projects.”

 

Maturity Period For Cassava From Planting To Harvesting
Afuwape says, “Cassava has several varieties. We have those that can be harvested in 7-8 months, there is 1 year, also 1 year 2 months and there are some that are 2 years. But the thing is, when cassava reaches about 1 year 8 months, it starts to lose its nutrients.”

 

Some Crops To Plant With Cassava To Help Rejuvenate The Soil
Afuwape says, “Because cassava is known to absorb a lot of nutrients, one can plant cassava with yam or maize.”

 

Equipment Required In Cassava Chips Processing
Afuwape lists some of them as follows:

  • Industrial weighing scale {0Kg – 1000KG}
  • Chipping machine with five Horse Power Motor and output of one tone per hour
  • Cabinet dryer with 20 stainless steel trays, heating element and thermostat to regulate the heat flow
  • A small production hall of one room size

 

“All these machines can be imported and they also can be locally fabricated. RAIDS and IITA Post Harvest Unit can be of help in this regard”.

 

Anjorin says, “Yes, I made a research about a year ago; there are some people in Oyo State, precisely in Ibadan who can fabricate these machines, but usually it is better imported because we can get cheaper machines from China”.

 

Costs Of Needed Machines
The FIIRO source says, “An estimate for the cost of 3 tons of dried chips per day, the chipping machine that will chip 1000 kg of cassava per hour costs N250, 000; a rotary dryer that will dry 1 ton of cassava per day costs N1, 000, 000; and a cabinet dryer that will dry 1 ton of cassava per day will cost N3, 000, 000. All these are locally fabricated machines.”

 

Prices Of Cassava Products
The FIIRO source says, “World trade in Cassava is steadily increasing. It increased by 36 percent in 1995-2004, that is from 6.17 million tonnes to 8.4 million tonnes. Despite this, the international prices remain low because the importers from EU countries control the world price. The prices are influenced by the prices of grains, especially barley. It is envisaged that the production of ethanol will drastically increase the demand for cassava products, thereby increasing the prices. “Nigerian chips are selling for $400-$450 per tonne. The price of Cassava root can be as low as N5, 000 or as high as N8, 000 per tonne depending on the area and the season. Prices are highest during the dry season and lowest during the rainy season”.
Anjorin says, “The price range is actually between $180 to $250 per tonne as at April 2013”.

 

How Local Farmers Can Go About Selling Their Cassava
Afuwape says, “Firstly, every farmer in the rural area should belong to an association or cooperative. It is very important because that is where they’ll get necessary information from. It is easier for them to sell their cassava that way because the association helps to look for buyers. Those who have local governments can also align with the agric department in their local government”.

 

More On The Nigeria\China Contract
Anjorin says, “You know we hear so many things, but don’t know which is true. Though, I have not seen the MOU, but I heard … to sell to either the FG or directly. I think the FG will have to come out and transfer the bid to a private body. I definitely know that there is no way FG will supply China any product all by itself; they will for sure transfer it to a private individual. Moreso, we need to understand the contents of the MOU; if government can sign a MOU to supply a product on behalf of the private sector, it will actually include, for instance, my company or the Nigerian Cassava Forum Association.”

 

Challenges To Brace Up For
Anjorin says, “Yes, there are lots of challenges namely, transportation; warehousing – we don’t have good warehousing systems in Nigeria and our transportation is so bad. You can transport goods from the North and they will not get to Lagos, not until one month. Also, other basic amenities like electricity – if you have a machine to dry the chips in Nigeria and it’s being run on Diesel, you might run a huge loss.
“The challenge with the export is our production incapability – we lack the tools, technical knowhow and systematic knowledge. Taking it one after the other, the machine should be available in each local government, at least having access to ten machines, but I tell you, in the whole of Nigeria, I am not sure we have up to five machines – it means instead of having 774 machines, we are having less than five. With that, hardly can we have production. Even with the few machines we have, how knowledgeable in terms of management and uses are we? For instance in the process of drying, how can we calculate the drying point, exceeding point, minimum dryness, below dryness where you measure the moisture content and the challenges we have. Also, the kind of system of government we run in Nigeria doesn’t give room for continuous and persistent training.”

 

Some Advice
Afuwape says, “I would say, before anyone should go into cassava business, ask questions and learn from those who are already in the business. Know where to do your lab analysis. Each cassava variety has its own content and specification. Any cassava that you harvest from an acre of land should undergo a lab analysis”
“For those who want to go into export, you need to know how exporting works. Learn how letters of credit work and know about things like performance bonds. If you fail to deliver within the stipulated days, you would lose your money.

 

“Sometimes, buyers can request for as much as 5,000 tonnes. But I would advice that if you get such a contract to supply dry Nigerian cassava chips, please, don’t jump into the offer. Before you sign the contract, they would tell you to pay some money called performance bond. Performance bond can be two to five percent of the total value of the contract. Now, if you fail to deliver within 30 days, the money you paid as performance bond will go to them. So, what you can do is to tell them to first allow you to supply 100 or 200 tonnes. Then you increase gradually. “I will also advice anyone who wants to export to start exporting animal grade and not food grade cassava chips. For food grade, you need borehole, treated water, clean non residential environment, gloves, etc.”

 

Anjorin says, “My advice to Nigerians or prospective cassava chip exporters: They need to have a flexible agreement with their buyers, whereby they offer them what is possible not what is in demand. So, with that, if they accept what is available, it will not be very difficult. It also means – with our weather conditions – that if the cassava chips change colour, the buyer is still going to buy.”

 

 Source: Success Digest

 

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