Export of the ingredients for making soup, previewed in the foregoing profiles, cannot be complete without the inclusion of yam flour (poundo yam) or processed/ fried cassava (garri) in the commodity list because poundo yam and garri constitute the main food stuffs upon which soup is dependent. Both are processed food stuffs, among the few food items on the list of exportable items, permissible by the Nigerian Export Promotion Commission (NEPC). Our attention here will be focused on poundo yam which represents the core food-items group jointly demanded with soup ingredients by consumers. However, an exporter is still at liberty to include garri in his expanded list of exportable food items.
Poundo yam is usually the industrially processed powder from raw yam tubers which is served instantly. It is the ready-made alternative to pounded yam or yam fufu (fresh yam that is domestically peeled, boiled and pounded until sticky elastic dough is produced).
The traditionally processed yam at village level is commonly referred to as yam flour (amala/ alibo). Generally, the yam flour (black or grey in colour) is regarded as inferior to the freshly pounded yam because it is often made from damaged or dry and flaked tubers. The nutritional value of the cooked amala is the same as that of pounded yam despite the poor quality of the tubers utilized in making amala and its local handling methods largely considered unhygienic. Amala is therefore not accepted as an export commodity for the reason cited above. Although the raw yam tuber has come to be accepted as an export commodity, recent experience has shown that it is still not advisable to export the raw yam tuber despite its additional medicinal values; simply because it is bulky and gets easily spoilt in transit.
Industrial ventures utilize fresh tubers that had been stacked and stored in good condition to make poundo yam. The fresh tubers are gathered, peeled and then sliced to a thickness of about 10 mm, more or less, depending on the source of heat or dryness of the weather. In a traditional industrial set up, the slices are then parboiled and allowed to cool in the cooking water. The parboiled slices are peeled and dried in the sun to reduce the moisture content. The dried slices are then ground into flour in a wooden mortar and repeatedly sieved to produce a uniform texture. Today small hand-operated or engine-driven corn mills or flour mills are increasingly used.
Processed, packaged (instant/ ready-made) high quality poundo yam products with long shelf-lives have found wide acceptance among the working class in the cities, who live in enclosed modern houses; who do not always have the time to pound the yam with mortars. Those residing abroad don’t even have mortars to pound the yam; neither do they commonly see fresh yam tuber to buy off-the-shelf. Hence, the demand of poundo yam is very high. Stocks of the product are cleared as soon as they arrive on the sales racks while suppliers constantly smile to their banks to feed either their domestic or domiciliary accounts.
Anyone desiring to join the ranks of poundo yam producers on commercial basis should endeavour to procure an integrated processing machine. The recommendable internationally recognized machinery currently in use for pulverizing raw yam into granulated forms (flour) in a hygienic way is made from galvanized steel and adapted in Germany from prototypes originally fabricated in Nigeria. The cost price of small-scale combined equipment that could process up to 3 metric tonnes per day is around 7,500 US dollars. Low-profile fabricated buildings or leased apartments and other basic facilities needed for the factory will not exceed N10 million. Raw materials are abundant in Nigeria and can be procured bit by bit at start. (According to the United Nations Food and Agricultural Organization (FAO), Nigeria accounts for about 61 per cent of the world’s total yam output). Labour is also abundant and low-cost.
In order to ascertain how profitable the scale of the processing plant described above would be, it is necessary at this juncture to do some practical analysis. Consider a poundo yam factory that is utilizing this type of machinery to produce only 2 tonnes of the finished product in a day; which presupposes a 66% capacity utilization level.
The reciprocal input-output ratio is roughly 1:3 or 30%, given that 1000 kg (1 metric tonne) of large-sized yam tubers fed into the machinery would normally yield about 300-330 kg of the poundo yam stuff. In terms of raw materials (inputs), the local Nigerian producing areas (middle belt and southern states) can boast of constant supplies at relatively cheap prices. The 50kg bag of yam tubers averagely cost as low as N10, 000. Based on the reciprocal input-output ratio of 1:3, a 50kg bag of raw yam tubers will ultimately yield about 16kg of the finished poundo yam.
Based also on the fact that the finished, packaged poundo yam averagely sells at an ex-factory price of N1, 000 per kg, our poundo yam factory will generate a turnover of N16, 000 from every 50kg bag of processed raw yam tubers.
Consequently, the gross margin to be generated from every one bag (50kg) of processed tuber will therefore be N6, 000 per day. A total turnover of N240, 000 will accrue in a given day. The production (wages and raw material costs and utilities) plus other operating costs (packaging, marketing and miscellaneous charges), estimated at a maximum 80% of turnover will amount to N192, 000 daily. This leaves total net revenue of N48, 000 per day. Assuming that the factory operates for a realistic 200 days in a year, net profit would be around N9.6 million.
Against a total start-up capital estimated at N15 million, the return on this investment is quite impressive; it is possible to recoup all capital invested in the venture in 2 years. Apart from the huge returns, the enterprise will offer employment to more than 5 people.
By way of furthering the analysis, let’s look at the profitability profile of an export scenario. In African markets in the US, a bag of poundo yam is sold for an average price of $13.86/kg. That is to say, if the poundo yam produced by the factory delineated above were to be dedicated to exports the equivalent Naira revenue that would accrue from a kilogram pack of the product, based on the current exchange rate, would be in the neighbourhood of N4, 000.
Comparing this figure to the N1, 000 derivable in the domestic markets, notwithstanding the challenges, the export venture is obviously more rewarding. The cost of exportation is about double the cost of operating a local venture but the returns from exports are almost quadruple. Even though, a lot more difficulties are encountered in the export business, the challenges are also easily surmountable if a prospective exporter painstakingly carries out professional, wide-ranging investigations that would enable him tap into the secrets of the business.
Details of the secrets of the export business, encompassing regulatory requirements including official registration, export procedures and documentation, compliance with national and international food standards, specific types and sources of the recommendable machinery and raw materials, factory buildings/ space and staff arrangements, technical processes flow, appropriate packaging materials, market links and distribution channels in both Nigeria and overseas countries and other essential information, will be embodied in a comprehensive feasibility study that would be professionally conducted for interested prospective investors.
