Idea 7 of 52 - Cassava logistics from Farms to Market
1. The
Idea
In one of my trips from rural Oyo
state (Eruwa, Ibarapka) to Ibadan, I noticed heaps of harvested Cassava being
loaded to some pickup trucks, and there were some already ground, that were
spread on the floor by the side of the road to dry. Herein lies the 7th
Business startup idea in our series.
Logistics for Cassava from farm to
Processing locations.
I saw an article last year which
highlighted the anomaly for Nigeria the largest producer of Cassava in the
World to be importing Garri (West African staple food), produced from Cassava (Omotosho, 2016).
Read
more on that https://www.thecable.ng/oops-nigeria-worlds-largest-cassava-producer-imports-garri-from-togo
The Idea here is to join in the
supply chain from farming of cassava to the supplying the harvested Cassava to
the place where it would be processed.
- Look for a Cassava farmer or any very large Cassava farms.
- Search for companies that need cassava as a raw material (Google search)
- Get in touch with them, and find out the quantity they would need.
- Be sure to know the quantity you can supply.
- Rent/Buy a truck for the trip
- Agree on price with the farmers, and the Company.
- Charge your logistics, sufficient enough for running cost and a reasonable profit
- Collect from the Farmers, supply to the Factory or processing locations.
2. The
Market
The Market is vast as Cassava has
a wide variety of applications. One of the applications being Garri makes up a
part of the daily meal in some Nigerian households. The other uses of Cassava,
e.g, flour for Cassava bread, feeds for Agriculture, industrial starch, Ethanol
for Bio-fuel, etc. all makes the demand for Cassava so high that it seems
Nigeria cannot sufficiently supply enough to meet this both local and global
demand. Joining this supply chain would help in facilitating the ease of
getting the produce straight from the farms to where they can be stored,
preserved or processed. This would also ensure that all the harvested produces
are maximally used.
3. The
Business
- Value Proposition: Logistics for Cassava produce, ease of transportation of harvested produce to the processing locations.
- Customer Segment: All companies that use cassava in one way or another as a raw material for their production.
- Distribution Channels: Vans, or other vehicles that can transport the harvested products.
- Customer Relationship: Direct
- Key Activities: Selling, negotiating, food products logistics, customer service, delivery etc.
- Key Resources: Truck, Workforce (driver, drivers mate, etc.)
- Key Partners: Cassava processing businesses, Farmers, Government, regulatory agencies, Associations, etc.
- Cost Structure: Truck purchase or rental, Staff pay, work related accessories, licenses and registration, etc. Be sure to understand all the cost implications before going into this.
- Revenue Stream: Payments for Logistics
4. Competition
As I observed, there are already
some people in this line of Business so if you intend going into this, you
would need to have a competitive advantage over the others. You could also
identify a niche industry or location which you could serve.
5. Risks
There is the threat from other
African countries that currently have markets in Nigeria they are serving. Some
Nigerian marketers may be importing from them and also adds to competition. If
these businesses using Cassava for their operations go out of business, then
this logistics services business would suffer.
Summary
I guess it is safe to say that
Cassava would always be in demand. For as long as Garri consumption and other
uses of Cassava remain, this middleman-logistics business would remain.
So
until next week, Stay inspired…
ARTICLE
BY MR EBIS
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Mr. Ebis on twitter @mrebis
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