How To Start A Lucrative Shea Butter Production Business In Nigeria: The Complete Guide
Every nation striving for economic growth and development must identify areas of its economic strength over its weaknesses, and seek to develop it by creating an enabling environment for further investment in those areas.
Nigeria has a strong comparative advantage in the cultivation, processing, and export of Shea butter in Africa, as She remains the largest producer of shea butter due to a large amount of arable land available for production and the conducive climatic conditions.
Presently Nigeria is the leading producer of Shea nuts, the nuts used in producing Shea butter, and is responsible for around 57% of the global production rate.
With a wide abundance of Shea nuts in Nigeria, the presence of skilled processing personnel in communities, and the vast global opportunities that Shea Butter production and export poses, this makes investing in shea butter production and export a profitable venture for any new and existing entrepreneur.
What Is Shea Butter?
Shea butter is a slightly yellow fatty extract from the seed of the African Shea tree. Shea butter is gotten when the nut of this tree is crushed and boiled. The tree is also called “The Karite tree”, which means ‘the tree of life’. It gets its name due to the numerous healing characteristics it possesses.
How Is Shea Butter Produced?
Shea butter is produced from shea nuts which are gotten from the shea tree. This tree produces its first fruit when it’s about 20 years old, and reaches its full production at about 45 years old.
The Shea tree can produce fruits for up to 200 years before reaching maturity, and the Shea fruit is edible and has a sweet taste.
After eating the Shea fruit, a shea nut in a shell is obtained.
Here’s how to produce Shea Butter In Nigeria:
The first step in Shea butter production is to gather the nuts
After gathering the nuts, the next stage is to crack the nuts open, then wash the nuts thoroughly and leave them to dry in other to reduce the moisture content.
After drying the Shea nuts, you then pound, roast, and turn then into a dark chocolate paste, before then adding water to the paste and mixing properly.
The next step is the heat the paste in high temperatures so that the fat can rise to the top and the oil settles under.
The last step in shea butter production in Nigeria or anywhere else in the world is to separate the fat from the oil. Afterwhich the oil is left to solidify to form the shea butter.
While the process of Shea Butter production in Nigeria is done manually in local village communities, the entire process can also be done mechanically by feeding the shea nuts into a machine that removes the fats. The fat is then collected and stored in containers to cake. The cakes are now collected in bags for sale or further preparation for exportation.
A Shea Butter production machine can produce as much as 10 tons per day running an average of 18 hours daily. And depending on the machine specification, it could produce more.
Facts About Shea Butter Production
- Nigeria is the leading exporter of Shea nuts and Shea butter in the world.
- Nigeria has a comparative advantage in the processing and export of Shea butter in Africa over her counterparts due to the large land available for production
- Nigeria currently produces over 500,000 tons of shea nuts annually.
- Nigeria accounts for almost 60 per cent of the world’s supply of Shea nuts and Shea butter
- Nigeria generates about $3.8 billion every year from shea butter exportation
- The Shea butter industry in Nigeria is dominated by small scale production capacity of fewer than 0.1 tons per day.
- The Chinese are the largest importers of Shea butter from Nigeria
Business Opportunities In Shea Butter Production
1). Production Facility:
By owning a Shea butter production facility, you can charge a fee to people to process their shea butter at your factory. When this is done, you’d be serving a very large market and have consistent revenues.
2). Cosmetic Market:
This accounts for the majority of the demand for shea butter both locally and internationally, as it is mainly used as a moisturizer for both hair and skin, therefore making the shea butter market a very lucrative one.
3). Multiple Uses:
The demand for shea butter internationally keeps rising, as more of its uses have been discovered. China is the highest importer of shea butter importing over 70,000 metric tons annually.
Challenges Of The Shea Butter Production In Nigeria
- It is a seasonal business as the nuts are only gathered during a season once a year. So production cannot happen all year round.
- Lack of highly efficient storage facilities for the unprocessed nuts
- Lack of capital for large scale production
- Indiscriminate cutting of Shea trees
- Lack of easy access to the international market by most producers
- Instability of the international market price of Shea butter
- Lack of technical input for large scale Shea butter production
- Lack of adequate government assistance
- Lack of knowledge on how to produce high-quality Shea butter
- Lack of funds to import international standard shea butter production machinery
- The profit margins on Shea butter is anywhere from 20% to over 100% because total production brings the cost price to between $900 to $1,200 per metric tonne, and it’s sold internationally for between $1,800 to up to $8,500 per metric tonne depending on the quality and where it is going to.
Shea butter production in Nigeria is a very lucrative business as the global demand keeps increasing. Depending on your production costs and where you’re selling to, the profit margins could be anywhere from 20% to over 100%, making it one of the largest and most profitable agro-business in Nigeria with and a very lucrative venture to for new and existing entrepreneurs to start.
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