At the peak of Nigeria’s recent economic recession, which lasted for five consecutive quarters, many manufacturing companies had to implement diverse in-house strategies to remain in business and adequately reward shareholders, especially with the unfavourable foreign exchange situation. Nigeria’s economic recession was a blessing in disguise to the nation and her citizens. It opened many business opportunities to Nigerians because companies where sourcing their raw materials locally as a result of high exchange rate. The model that saved the situation was backward integration model, which became an option for manufacturers in Nigeria and has made agribusiness fast becoming the toast of many Nigerians who want to play in the entrepreneurial space.
However, local raw material supplies business is the business of sourcing materials or substances used in the primary production or manufacturing of goods, locally. Raw materials are often referred to as commodities (Agric produce commodities). According to analysts, agriculture has the potential to sustain a more equitable income growth compared to the oil and gas sector as well as saving valuable foreign exchange for the nation. The opportunities for agricultural transformation in Nigeria are immense and could boost domestic production, lower imports and act as an engine for job creation.
Locally sourced raw materials have been proven to be of high quality and the availability is assured leading to improved farming and storage system, this, as a result, has made local raw material supplies business a good agribusiness to venture into in Nigeria today.
Criteria For Being A Local Raw Material Supplier
To venture into this kind of business is not difficult but there are criteria you must possess to become a raw material supplier in a manufacturing company in Nigeria, especially those into processing of consumable goods such as:-
· Company registration name (business name or limited liability): You must have a registered company name with a traceable address because companies deal with cooperate entities not individuals.
· Financial capacity: you must have financial capacity because most companies into processing usually pay after 30-36 days of supply. Having the ability to supply on weekly or monthly basis depending on your capacity or agreement is key to this type of agribusiness.
· Warehouse: It is not compulsory but very important because sometimes you can improve the standard and quality of your raw materials before supplying.
· Consistency in supply: being able to be consistent in supply of products.
· Registration with the processing company: you must be registered with the prospecting processing company. Organisations have different requirements that are needed for registration. After your registration, your information will be in their database as a supplier.
Processing Companies In Nigeria
There are many processing companies in Nigeria that are in need of locally sourced raw materials today. Some are into feed production, consumable products, raw material production etc, all over Nigeria such as Olam, Flour mills, Sunseed, Hybrid Feed, Noodles Company, Dangote etc. All you need to do is to identify one in your area and what they need. You must be very knowledgeable about what you are going to be supplying such as, the season, availability, locations etc.
Local Raw Materials To Supply
Soya beans, cassava and maize, palm oil, cereal and grains, sugar cane, fruits, oil seeds, ginger, onions, tomatoes, beans, pepper etc.
There are consultants whose jobs are to get you registered and secure a place for you to be a raw material supplier if you don’t want to undergo the stress associated with the registration process. The good thing working with consultants is that they will give you all the information you need about the company and raw materials such as availability, transportation and locations. Attending workshops or seminars on agricbusiness with focus on raw material sourcing and supply is key if you want to venture into this type of business.