Agro Processing in Nigeria

Agro Processing in Nigeria, Adding Value to Agricultural Products

Agro processing in Nigeria involves adding value to Nigeria agricultural produce. Value-added agriculture generates several billions in economic impact of a country. In fact, adding value to agricultural products beyond the farm gate usually has several times the economic impact of the agricultural production alone.

Agricultural producers receive a much smaller portion of the consumer’s naira than do food processors, especially processors who produce brand name items. Capturing those additional naira by adding value to farm or ranch products is a goal of many producers.

Agro processing in Nigeria today can act as a catalyst towards starting or commencing your own value added business. You can join our training and food processing and packaging for local and international markets.

Value Addition, a Veritable Future for Agro Processing in Nigeria

What is “Value Added?”

“Value added” means adding value to a raw product by taking it to at least the next stage of production.

adding value may be as elaborate as going all the way to the consumer with a “case-ready” food product.

If you are considering a value-added enterprise, there are two key questions to answer:

1) What is customer value? and 2) What creates a value-added product?

What is Customer Value?

“Customer value” reflects the relationship between the benefits customers receive from and the price they pay for a product. The more benefits relative to the price, the higher the customer value. This does not necessarily mean that greater value results from a low price. The price of a particular product may be high, but if the associated benefits are high as well, the customers perceive the product as valuable.

This interaction creates customer value and, thus, the opportunity to add value to your product.

Creating customer value is critical in building a profitable and substantial business. However, one must bear in mind that it is the customers’ perception of value, not the producers’, that is critical.

It is also important to recognize that different customers have different perceptions of added value. These perceptions correspond to their expectations of quality, service, convenience and selection.

What Creates Added Value?

“Value” is usually created by focusing on the benefits associated with the agribusiness product or service that arise from:

Quality — Does the product or service meet or exceed customer expectations?

Functionality — Does the product or service provide the function needed of it?

Form — Is the product in a useful form?

Place — Is the product in the right place?

Time — Is the product in the right place at the right time?

Ease of possession — Is the product easy for the customer to obtain?

A product must have one or more of these qualities to generate additional value. Remember that a product is simply a bundle of benefits, and that the more benefits there are the more customers will perceive the product as having value.

What’s Driving “Value Added”?

Agro processing in Nigeria, particularly the food sector, is rapidly consolidating and increasingly responding to the changing tastes and preferences of consumers.

Consumers have higher incomes than ever before.

They are focusing more on convenience, quality, variety, service, health and social consciousness.

They are also faced with the increasing value of (and demands on) their time.

In a nutshell, consumers are more value conscious than ever.

Consumers’ rising disposable incomes and the market fragmentation caused by retail consolidation exacerbate competition, but at the same time leave many niche markets to be exploited.

This creates opportunities for producers to add value to their products.

How to Benefit from Agro processing in Nigeria (Creating a Value-Added Product)

To take advantage of opportunities in this area, one must know and understand customers. What consumer segments might want your product? What are the benefits desired by these potential customers? What criteria are they looking for when purchasing?

Writing these down as part of a business plan is an important first step in beginning a value-added business.

Any business enterprise can be thought of as a value chain. Each activity that is performed should add value to the product. To do this, one must meticulously control the activities at each step in the value chain: procurement of inputs; converting inputs into products; marketing and sales; supply chain logistics; and customer service activities. A new value-added business should focus on the product’s uniqueness. The uniqueness of your product or service (the value you add) is what ultimately attracts customers.

Obviously, this value-added strategy is very different from the commodity-oriented strategy with which most farmers and ranchers are familiar.

In a commodity strategy, a producer focuses on the costs of production with the goal of being a low-cost producer.

This is, in essence, a “supply-side” focus.

The value-added strategy, in contrast, involves a “demand-side” focus—determining who the customers are and what they want. Then, after assessing your resources and source of uniqueness, you provide a product or service that efficiently curbs production costs while meeting the needs of the potential market.

Unlike a commodity-driven business, a value-added business cannot erode benefits or lower input specifications just to lower costs.

Steps to Success in a Value-Added Business

Building a new business is difficult and takes hard work. But, for all the uncertainty, there are ways to craft a successful value-added business strategy.

The key factors in a detailed business plan are:

Operations plan — flow of the business, quality and cost control

Personnel plan — needs, skills and training

Sales plan — including challenging but realistic goals

Management plan —strengths, weaknesses and resources

Investment and financial plan — cash flow planning

Examples of Agro Processing in Nigeria

Cassava bread making

Corn starch processing

Cowpea processing

Cashewnut processing into edible cashew kernel

Full fat soya processing

Kunu production and preservation

Soy-dawadawa processing

Soy-ogi production

Vegetable oil extraction

Fruit juice processing

Plantain chips processing

Tomato paste processing

Cassava based adhesives processing

Cassava starch processing

Odorless fufu processing

Cassava flour processing

Yam flour processing

Potato flour processing

Cocoyam flour processing

Instant pounded yam flour processing

Palm wine bottling and preservation

Adequate training is needed to start a successful agro processing in Nigeria, I suggest you should consider attending a practical oriented agro processing training to set you on the right path.

You can always contact us if you need assistance on commencing agro processing in Nigeria.