THE NATION WEDNESDAY, FEBRUARY 27, 2013
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SMALL BUSINESS AND ENTREPRENUERSHIP ‘Foreign trade key to SMEs’success’
Ice cream making is viable N IGERIANS love ice cream. This explains why the market is awash with different ice cream brands. With the concept of frozen yoghurt becoming popular, many national and international brands are springing up to satisfy the cravings of ice cream fans. With the myriad of flavours and a variety of ice creams, these parlours have become the most suitable low cost business concept. The high growth of ice cream and frozen novelty segments have created business opportunities for people who want to venture into the sector. Managing Director, Okey General Agencies, Mr Bernard Ajiroghene, said starting an ice business is a good investment. He said there are opportunities in retailing and ice cream vending businesses. He is looking for businessmen and women who are enthusiastic and goal-oriented to become part of the ice cream business. The business has grown with the development of new opportunities. Trends indicate that there is an upward trend in the consumption of ice-creams. What is more noticeable is that icecreams are slowly becoming an all-season product and not merely a dry treat. Factors, such as rapid urbanisation, rising incomes and changing lifestyles have encouraged the growth of the industry. Ajiroghene said one can start with N10,000 and run the business on part-time. He said producers can get returns on their investment in few months. Good operating locations for an ice cream stand include mall food courts, beach areas, or small storefronts on main streets. In addition, an ice cream stand can also be operated on a mobile basis by converting an enclosed trailer or delivery van into an ice cream stand. A mobile ice cream stand has many benefits as opposed to a fixed location because one can transport the business to areas where demand is greatest for the product. The profit potential is outstanding, and it’s not uncommon for an established ice cream stand to generate profits in
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Stories by Daniel Essiet
excess of N5,000 daily, according to him. Some customers are willing to pay a little more for quality ice cream, and this has helped operators maintain their margins. New product development plays a huge role in the continued success of the ice cream business. New flavours profiles and ingredients, betterfor-you products and new packaging concepts are important. One does not really need to have special equipment to turn out a little homemade ice cream. A metal ice tray or container and a freezer will suffice. To create new ice cream entrepreneurs, Ajiroghene said he is partnering with the Association of Micro Entrepreneurs of Nigeria (AMEN) to train Nigerians on how to make money from ice cream and yoghurt business. During the training, prospective entrepreneurs will see how fresh and delicious ice cream is made and enjoy a good product. Customers want ice cream offered fresh daily. More than two-thirds of the ingredients used in making the products are locally sourced. These days, there are customers who want natural ice creams. Such products contain no artificial flavours, preservatives or stabilisers, only fresh fruit pulp or dry fruits. With the hot temperature, the weather has played its part in keeping customers coming back for more. Right now, there are all kinds of gadgets for making ice cream at home. They are fun to use and one can come up with some creative combinations. Ajiroghene said opening an ice cream business is lucrative. The strategy is having a devoted cliental and winning taste test. The target is scoop shops, restaurants, food service and wholesale accounts. A lot of small operators are eyeing growth opportunities, thanks to funds to purchase new freezer units and point of sale materials for outlets. Small operators are increasing their retail outlets. Each new outlet requires an investment in freezers
•Ice cream
and point of sale materials. Ice Cream is an example of a viable business with strong potential for growth both nationally and internationally. From push carts to parlours, many Nigerians have built their ice cream empire. He said there is a market for Nigeria to manually produce litres of ice cream daily. Like most success stories that are laced with phases of initial struggle, his story was full hardship at the beginning. Another issue that bothers producers is the prevalence of a bad players who offer very low quality products at cheaper rates. Other factors that pose challenges
to the growth of the industry, include lack of cold storage chains, irregular supply of electricity and poor infrastructure for storage and transportation. It is a matter of concern for the industry that the storage problem chain is poor. This obstacle hits the industry hard since an ice-cream is a perishable product. Erratic and poor electricity supply is also another problem. The massive consumer market and the anticipated strong economic growth over the next few years augur well for the ice cream industry. It is becoming more apparent that the future of the ice cream industry will be shaped by the organised retail sectors.
Making palm kernel cracking plant T
HE oil palm tree grows in the coastal belt of Nigeria. It varies in depth from 100 to 150 miles and a riverine belt, which follows the valleys of the Niger and Benue rivers for a distance of about 450 miles from the sea. Naturally, production of palm kernel oil usually occurs along these locations. The main palm oil producing states in Nigeria includes Ogun, Ondo, Oyo, Edo, Cross River, Anambra, Enugu, Imo, Abia, Ekiti, Akwa Ibom, Delta and Rivers. The market for palm and palm kernel oil is national. With a population of over one 160 million and an estimated national population growth rate of 5.7 per cent per year, an average economic growth rate of 3.5 per cent per year in the past five years, Nigeria has a large market for edible oil. It is believed that no part of the oil palm tree is useless. It is the only tree from which can be sourced a variety of products that include palm oil, kernel oil, kernel meal, shells, planks, fronds, palm leaves and sweep-
By Edwin Agbaike
ing broom, etc. The investor can choose to have a cracking machine or source the raw material from other cracking centres around. The other machinery required include the expeller and storage tanks with heaters. During production, the shells can be used as fuels and for road construction. Though the market is not well developed in the country, the palm kernel nut obtained is crushed and processed to yield palm kernel oil and cake. Produce buyers as well as direct end users go to rural areas to buy this products from peasant producers, who use the old method (stone versus stone) to crack, hence their inability to meet demand. Demand for palm kernels is on the increase and is by far higher than supply. Products of this industry could be sold either directly to the palm oil millers or in the open market where produce buyers abound. The process involved in palm
NTERNATIONAL trade and cooperation have become a key driver of small and medium enterprises (SMEs) success, according to an in-depth and wide-ranging DHL Express study by IHS, the leading global source of information and analytics. The macro-economic analysis and survey of 410 SME directors in G7 and BRICM economies reveals that SMEs engaged in international markets are twice as likely to be successful as those that only operate domestically. Of the SMEs surveyed, 26 per cent of the firms that were trading internationally significantly outperformed their market, in contrast to only 13 per cent of those with operations only in their home country. SMEs cited the key benefits of this international approach as the access to new markets that it provides them with, as well as access to know-how and technology and diversification of their products or services. The results are true for SMEs Africa, which are being recognised as drivers of economic growth in these countries. While no verified data is available around the number of SMEs operating on the continent, they make up over 90 per cent of business in countries, such as Ghana and South Africa, and are an important area of development in Nigeria. “The results of this study are, reflected in the outlook for SMEs in Africa,” the Managing Director for DHL Express Nigeria, Randy Buday, said. “The possibilities opened up by new technologies, the Internet, and modern transportation means that there are many foreign trade opportunities out there for Nigeria businesses. With thorough research and a well-defined strategy, local SMEs can successfully expand into new markets, compete with larger companies, and use their size and nimbleness to their own advantage,”
kernel production is so simplified that any investor could master them within a few hours. These include loading of uncracked kernel into the hopper where they are automatically cracked (98 per cent efficiency levels) and discharge for evacuation to the sieving section for separation, blowing, bagging and ready for the sale. The required machine is cracking and automatic separator. A locally fabricated one line machinery cost about N750,000. The plant being considered is on cracking 12 bags of palm nuts (made of 50 kg bags) working on a one shift of eight hours/day. Thus, the plant is capable of producing 3,000 bags cracked palm nuts per year of 250 days. This gives about 180 tons of cracked kernels. A ton of cracked kernels is selling at N126,000. Revenue per year is about N22.68 million. It is estimated that 60 per cent of total revenue is cost of procuring the uncracked nuts; this gives a gross profit of N9.07 million. An investor that is able to acquire two plants will automatically double
the above estimated revenues. The viability of this project is not in doubt considering its high turnover and envisaged profit margin. This project can attract finance from the banks, where individuals or corporate bodies are assisted with funds ranging from N500,000 to over N50 million. A well-packaged feasibility report is a pre-requisite to securing finance for the project. This can be provided on request. For details on how to implement this project or any other, please contact Kris-Ed Brilliant Limited. 395, Borno Way, Harbert Macualy Road, Sabo-Yaba, Lagos State. Tel. Nos. 08098525122; 08023381900. E-mail: krisedbrilliant@yahoo.com
Start up quote “Nothing works better than improving your product” Joel Spolsky Co-founder,Stack Exchange
NDE trains 50
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HE National Directorate of Employment (NDE) has trained 50 vulnerable persons on skills acquisition in Jagawa State, its state Director , Mallam Muhammad Sambo, has said. He said in Dutse, the state capital that the group would be trained under NDE’s Vocational Skills Development Scheme (VSDS). He said the training was designed to assist youths, women and the vulnerable persons to engage in activities that would improve their lives. During the three-month programme, participants would be exposed to tailoring, knitting, shoe, pomade, soap and beads-making and curry processing. Sambo said the trainees would get N2,000 each as a monthly allowance, adding that N1.5 million would be disbursed to them as resettlement packages after the programme. A participant, Mallam Bilyaminu Umar, who is physically challenged, said he enrolled in the programme as a trader cobbler. He said the training would help him in seeking a means of livelihood rather than begging on the streets. He commended the Federal Government for the initiative and called on other wellmeaning Nigerians to help the vulnerable. A widow, Mrs Rabi Ismail, who enrolled as a trainee in knitting, said the programme would assist her in sending her six children to school. Sambo praised Governor Sule Lamido for allocating 30 hectares of land to the directorate. He said public works and houses would be constructed on the land.