Grooming small enterprises for non-oil export

This is the concern of AFRICA Sustainable SME Export Trade Solutions (ASSETS), Bank of Industry, who along with others, put together a workshop Wednesday June 29, at Four Points by Sheraton, Victoria Island Lagos. The following is a preamble to the main report which will come your way in the coming week.

 Shade Bembatoum-Young, the Ceo of ASSETS has become synonymous with promotion of non-oil and non-traditional export and more. For 26 years to date, she has gained recognition as a strong advocate of non-oil and traditional export, intra-ECOWAS trade, and fighting poverty in Africa by creating sustainable livelihoods for African women and men through the development of Micro, Small and Medium Enterprise Exports. This time around, she is doing what she knows how to do best in partnership with Bellafricana, a company that is into promoting the beauty of Africa.

Folashade Aluko, representing Nigerian Export Import Bank (NEXIM), (money plays a very important part in business transaction, most especially since NEXIM – a development finance institution – comes with lower interest rate which the commercial banks cannot offer) told participants at the workshop that NEXIM complements the efforts of the Bank of Industry, “but the funding done by NEXIM must be for export.” The bank funds insurance too.

“We offer one, five years facilities and serve ECOWAS, Asia, and Africa… We fund manufacturing, agribusiness, solid minerals, services, transport, tourism and entertainment,” she said.

The bank also does direct lending, offer risk-bearing services and takes up to 80 per cent of project cost, Aluko said.

She said the Nigerian creative industry is a big employer of labour employing over two million hands and the Nigerian Nollywood is highly prolific, and that it is world number three.

And coming from Shade Bembatoun-Young is that “production development is more important than market development” –she asked SMEs present to note this and other important points she reeled out. Reeled out,  yes. What else do you expect from someone who has spent close to three decades advocating for the best for non-oil and non-traditional export. Hear her telling the small enterprises heads present: “Be competitive locally before going global; if you don’t, you will regret it; you must do SWOT test – how many of you have ever done this?; what’s your company’s greatest strength?; where do you want to place yourself –  in raw material supplies, semi-finished products, finished products in bulk, packaging, exporter, export marketer?; No rushing;  different markets requires different specifications.

“You can export expertise too”, she advised and the list she offered include expertise, IT, telecoms, transport, financial, legal, marketing, and advertising. And for creative industry she listed film, music, arts and crafts, textile and fashion designing.

And Shade explained:  “Our adire is dying out. This shouldn’t be. We should revive it. The finishing for our garments is poor – we don’t have a garment industry. Product development and adaptation for export is very vital. What adjustments do we need to make to be product export ready?  Which market do you have competitive advantage? Note the importance of identifying niche markets for SMEs. U.S. for instance is not one market.

“For luxury bags, we have them. We are making things happen. But ignorance can ruin business overnight – ignorance of standards required. We must be proactive – we must think out of the box, we must throw away the box. Join and create national networks – chambers of commerce, Interface, African Cotton Textiles Stakeholders.

Buki’s Bellafricana, whose company promotes African beauty, spiced up the Four Points By Sheraton event with her irresistible products.

Then she spoke about coopetition – a rare strategy that several in the hall were hearing of for the first time (me too, I won’t lie). Coopetition is the act of cooperation between competing companies; businesses that engage in both competition and cooperation are said to be in coopetition. Certain businesses gain an advantage by using a judicious mixture of cooperation with suppliers, customers and firms producing complementary or related products.  Shade advised this strategy. She advised SMES to focus on the bigger picture “whatever your common challenges”. Coming together, staying together and working solve many problems, she said.

Wealth-creation opportunity in

Palm oil processing (1)

Donald Abraham

Introduction:

Processing edible palm oil from harvested palm nuts is one of the most lucrative, shortest and easiest routes to creating long-enduring noble wealth. This is because it has many domestic and industrial uses the demand of which is daily and rising. Besides, both the technology and personnel needed to see the project through from the beginning to the end of the processes involved are locally available in abundance. This is a project whose time has come especially now that the monolithic oil economy has crashed and every emphasis on everybody’s lips is the diversification of the various sub-sectors of the economy in order not to get into recession. This write-up therefore briefly highlights the socio-economic benefits of establishing a plant to extract good quality palm oil from fresh fruit bunches (ffb) for both domestic and industrial uses.

Palm oil uses

Palm oil is used domestically for cooking and frying and industrially as raw materials in the manufacture of margarine, ice cream, drugs, soaps, detergents, body creams, confectionery, refining deodorised vegetable oil, etc. Its main by-product, palm kernels, is used to produce palm kernel oil which is a major raw material input in the production of soaps, cosmetics and many others. The palm kernel cake is used in compounding animal feeds. Virtually everything from the palm oil (red gold) extraction process has one important food or industrial use.

Raw Materials

The raw material is the harvested fresh fruit bunches (ffb) sourced from palm groves and estates. Plastic jerry cans and 200-litre drums are used to store and sell the milled oil. Accessories include wheel barrows, machetes, axes, etc. All these are obtained locally and in abundance. Any one venturing into red gold processing is assured of steady supply of ffb especially now that there is a resurgence of interest in developing hundreds of thousands of hectares of palm plantations of ‘tenera’ palm seedlings by individuals, state governments and corporate organisations. Everywhere in the palm belt ripe palm fruits are awaiting harvesting and milling.

The Market Potentials

Nigeria used to be the world’s largest producer of palm oil in the fifties and sixties. Proceeds from the export of palm produce and other agricultural products in heir value chain were used to fund the various development projects that were embarked upon during the period in the southern parts of the country. However following the advent of petroleum oil palm plantation development and processing (as well as other sub-sectors of the economy) were neglected to the extent that Nigeria became a net importer in 1997 of palm oil products and has remained so ever since. . It was widely reported in December 2003 that one of the then

big local manufacturers relocated its soap and margarine plant to a neighbouring country because it was unable to source its palm oil needs locally.

There is tremendous demand today as it was yesteryears for processed good quality palm oil as is shown above by its various uses. The national domestic and industrial consumption far exceeds supply and the shortfall in supply is met through importation. Presently (July 2016) a 25-litre keg of good quality palm oil sells for between N6,750 and N7,000 depending on the source.

For further information and assistance, only serious investors should please contact Mr.

Donald Abraham through emails: letustalkwealth@yahoo.com. talk2dco@gmail.com,

Telephones :   (234-1-802-036-7924; 803-725-1974)

Brexit’s looming contagion: What do we do? (2)

The Ghanaian cedi too has seen a sharp selloff while Kenya’s central bank governor has already reassured the market that the country has sufficient buffers in its forex reserves to protect against any balance of payments shocks that may emanate in the aftermath of the “leave” vote,” he said…Whilst there may not be significant direct trade relations with Britain for African countries (only around 4 per cent of Sub-Saharan Africa exports are to the UK), the slowdown in the UK will have a an indirect effect by impacting the growth outlook for other key European trading partners – thereby reducing demand for African imports.”

He said Nigeria, for example, could be adversely affected by declining export volumes to Spain and the Netherlands, its third and fourth largest export destinations respectively…

Commenting on the issue of economic diplomacy, a very strong and sensitive issue in international relations, Ronak Gopaldas argued, “ The question of economic diplomacy is another that will feature prominently in the wake of Brexit, as it is unclear whether this decision will see Britain pivot towards a more insular approach, retreating from globalisation, or a more expansionary approach which broadens its trading partners…”

Britain, he said, has long been a critic of Europe’s distortionary agricultural subsidies which disadvantage Africa, and some commentators are of the view that African countries could stand to gain from  in the longer term. African countries could also get some respite from looking east for new export markets…”

In summation he said with the wave of anti-establishment and nationalism sweeping across the developed world, the political landscape in many African countries, still wrestling with the aftershock of the Arab Spring, may also undergo significant change.

What do we do then? His advice is that we should “Keep calm and carry on,” which he thinks “may well be the only option African countries have at the moment…”.

This no doubt is a strong message and reminder for us on the importance of diversification of our economy.

Siaka Momoh, a media consultant, is Publisher/CEO ‘The Real Sector’ monthly digital magazine and ‘Realsectornow.com’. Contact: siakamomoh@yahoo.com; 08061396410