Ms Brenda's Blog: HOW TO START YOUR OWN PROFITABLE AGRICULTURAL EXPORT BUSINESS

This is a step-by-step guide on how to start your own profitable agricultural export business in Nigeria. I will show you why agricultural exportation is the new oil. I will also tell you what items to export, how to start your own exportation business, how to get the necessary license plus how to find buyers and source contracts. Get your pen and paper; we will cover a lot of ground, or simply bookmark this page so you can always revisit for future reference. Also, if this article helps you, kindly share it with your friends on social media. Let’s get started…

AGRICULTURAL EXPORT BUSINESS – THE NEW OIL

According to this Punch Newspaper report, Nigeria earned a total of $730m (N143bn) from its non-oil exports in the fourth quarter of 2015. On the 28th January, 2016, the Executive Director/Chief Executive Officer of Nigerian Export Promotion Council (NEPC) Mr. Olusegun Awolowo stated that the NEPC has put in place some plans to increase the country’s non-oil export revenue to $18billion by 2019. A lot of money change hands in non-oil export. How would you like to get your own fair share of $18billion? Keep reading.

Nigeria’s export industry remains largely underutilized because we are still waking up from our oil-induced slumber and government is making every effort to promote economic diversification through non-oil exports. This is a golden opportunity for the smart entrepreneur to key in and prosper. Yes, export business is very profitable and the earning potentials will only increase in the coming years.

HERE ARE SOME OF THE BENEFITS OF AGRICULTURAL EXPORT BUSINESS TO THE COUNTRY’S ECONOMY AND THE INDIVIDUAL:

Economic diversification: No nation can grow effectively without export. Export is trade between countries. It is one of the ways countries grow wealth and one of the cheapest means of FOREX.
Exportation is very profitable: While importers lament bitterly due to the embarrassing forex quagmire, exporters are the ones who smile – no, laugh – to the bank. More people are realizing this and the business is booming.
Creates employment: Export creates employment for not just the exporter, but for everyone in the chain. From the people who produce the exportable commodities, to the product sourcing agent, the haulage company, shipping line workers, the list is endless but you get the idea.
Reduce post-harvest losses: to make this point clearer, the Food and Agriculture Organization (FAO) of the United Nations estimates that Cassava produced in Nigeria goes mainly to feed and food (on average 45.6 percent and 45.7 percent respectively, while the rest of it goes to waste. Exportation reduces this loss/waste through processing and exporting the products in the value chain to other countries.

LIST OF AGRO-ITEMS YOU CAN EXPORT FROM NIGERIA

One of the first questions to ask when starting your agricultural export business is: what should I export? The short answer is, it depends on your interest as the exporter, available startup capital, and availability of the items. To give you an idea, some of the agro-produce to export include, but not limited, to the following:

Cashew nuts Ginger, Cocoa (seeds and processed)

Fruits Kola/bitter kola Ginger

Garlic Groundnuts Cow bones/cow horns

Gum Arabic, Rubber Sesame seeds Shea nuts/Shea butter

Mangoes, sugarcane Vegetables/spices Plantain flour

Ground melon Ground maize beans

Shrimps Prawns, etc.

You can export any of these items in their raw state and make money. However you can maximize profit by adding value before you export. For example, you can export Shea nuts and make money. But you make much more money if you add value by exporting processed Shea butter. The same goes for cocoa, palm fruits, cashew and other agro-produce you can export.

WHAT NOT TO EXPORT

Here are some items on the export prohibition list:

Maize Antiquities Scrap metal

Artifacts Timber (in any form) Raw hides and skin

All unfinished leather Unprocessed Rubber Latex and Rubber Lumps

Animals classified as endangered species, e.g. Monkey, Lizard, Elephants, Crocodiles, etc.

HOW TO EXPORT

Here is a step by step guide on how to start your own agricultural export business in Nigeria

1. DO YOUR RESEARCH AND DRAW UP AN EXPORT BUSINESS PLAN

No endeavor succeeds without adequate planning. A business plan is critical not only as a road map to your business success, but as a basic requirement to secure export loan from banks, financial institutions and government bodies. Your business plan should include details like:

What do you want to export?
Where is it found?
Who wants to buy it? How well do you know your market? Do you know who your buyer is and what they want?
How much do you need to start?
How much do you have?
How profitable is the venture? What is your Return on Investment (ROI)? ROI could be as low as 10% or as high as 100%
How do you plan to maximize profit?
How will you get paid? What is the exchange rate? How long should it take to get your money?
For how long is the produce available? Some agro-produce/crops are seasonal. Is there enough in the market to sustain delivery? Some newbies accept export contracts for products that are either not available or not sustainable. This results in customer disappointment and creates a negative reputation for other well-meaning exporters.
What is your mode of transportation/shipping?

NOTE: To increase your chances of success in agricultural export business, you need some hands-on training. Information like this article gives you a starting point in your learning process and answers some basic questions without spending your money. However, learning from someone who is already in the business gives you a firsthand experience of what to expect and what mistakes to avoid. There are many export consulting firms in Lagos and across the country who provide training to aspiring exporters. It will cost you but it will be worth it.

Alternatively, you can buy some training materials (ebooks, audio, etc) from people who market them. Contact Emmanuel (call +234 803 385 5240) and get some at a reasonable cost.

2. REGISTER A BUSINESS NAME

Without a registered business name, your export business is dead on arrival. Having a business name gives you more credibility and is a requirement for getting your NEPC export license. Your business must be registered as either a Limited Liability Company, cooperative society or Government/Non-government organization.

3. GET THE NEPC EXPORT LICENSE

To do this, you need to visit the NEPC office in your state. You will:

Buy Exporters Registration Form at the cost of N1,000
Pay a N10,000 registration/processing fee and
Submit your completed registration form to the NEPC, attaching the following documents:

Photocopy of Company’s Certificate of Incorporation;
Certified True Copy of Memorandum and Articles of Association
Certified True Copy of Form CO7, in case of Limited Liability Company or a copy of the Law establishing the agency in case of Government Organization.

Alternatively, you can register on the NEPC website. Download the requirements and procedure for online registration here

EXPORT CONTRACT SOURCING – WHERE TO FIND BUYERS

This is where people have the most headache; you don’t export if there is nobody to buy from you. So how do you source buyers?

Friends and relatives: The best way to export your products is through friends and relatives abroad. I know a lot of people who export this way. Of all the problems people encounter in export business, a greater percentage has to do with trust. You are going into business with someone you don’t know and anything can happen. But if you have someone on the other side you can trust, everything becomes easier. So the person can tell you what is what, help you sell your products and make sure you get your money. You can export food stuff to relatives in Europe and around the world where they enjoy Nigerian dishes. This is a cool way to make money.
International trade websites: You can source buyers on international trade websites like tradekey.com, fita.org and importexportplatform.com. Be careful, though. Not everyone on the internet is genuine and they probably feel the same way about you. So do your due diligence. This is one of the times having a mentor becomes critical because your mentor should tell you how to avoid scammers and not present yourself as one.
You can get buyer recommendations from other exporters and export consulting firms. These are people who are already in the business and can show you the ropes plus get you a lead or two. This is where your ability to network comes into play.

Other ways to get buyers include trade brokers, Chamber of Commerce and export agents.

HOW TO GET CAPITAL FOR YOUR EXPORT BUSINESS

If you are taking your first baby steps in exportation, taking a bank loan is not the best way to go. For a bank to grant you loan access, you must prove that you are already in the business and you can get back their money.

For first time exporters, there are other options available for you to source capital, like personal savings, family and friends, partnership and joint venture, etc.

OTHER WAYS TO MAKE MONEY IN EXPORTATION

You don’t have to be an exporter to make money in export business. There are other ways you can tap into this wealth. You can become a:

Port/logistics agent: A port/logistics agent handles the port/shipping side of the business. This includes dealing with Customs, getting proper export documentation, handling, and making sure the items ship out with the best shipping line. Port agents make life easier for newbie exporters and exporters who don’t have the time to deal with port authorities.
Commodity sourcing agent: When someone gets an export contract for a commodity, the commodity sourcing agent finds that particular commodity and delivers to the exporter. They also sort the commodity to make sure the exporter does not get duped.
Contract sourcing agent: The contract sourcing agent knows where to find buyers for the exporter who has a particular commodity but cannot find a buyer.

Each of these sections require some training and they command some reasonable fee, plus they don’t have to bear the profit/loss risk with the exporter.