How to start Charcoal Exportation Business in Nigeria
Some times ago, some clients asked us how to go about with Charcoal Exportation, so we have decided to share with you this essential guide. How to start charcoal exportation business in Nigeria.
If you are reading this right now, and you never knew that there are a lot of business opportunities in charcoal exportation than meeting your expectation, you don’t have to worry. I am about to show you what you need to do to become an exporter of charcoal from Nigeria to your customers in other parts of the world.
Although, as a beginner, starting a charcoal business can be challenging.
But remember, to succeed in business, you need to maintain resilience and gather information only from relevant sources while avoiding overload of information as well.
Table of Contents
1. Some few facts about Charcoal Export
2. What is involved in a Charcoal Business?
3. Why do these foreigners buy Charcoal?
4. How much it may cost to start Charcoal Exportation Business?
5. How to start Charcoal Exportation Business
6. Where to Source Charcoal locally in Nigeria
7. Sourcing for International Buyers of Exported Charcoal
1. Some few facts about Charcoal Export
The international selling price of charcoal is anywhere from $200 to $600 per ton.
Charcoal is used as a constituent of some toothpaste.
Charcoal is sometimes also used in cosmetics.
Charcoal is used for cooking food in various forms.
Charcoal is a great exportable product from Nigeria.
The profit margins on the sale of Charcoal to international buyers can be anywhere from 30% to over 100% depending on if you’re the producer, are buying from the direct source, and the final price agreed to with the buyer.
As a broker, you can venture into this business with $0.
Nigeria is estimated to have limitless access to charcoal because of its widespread forest areas.
There are large volumes of charcoal for purchase in Nasarawa, Kaduna, Jos, Minna, Egbe, Jebba, Oyo, and several other states in Nigeria.
Charcoal prices are calculated in metric tonnes.
Charcoal is made in a process called carbonization.
Facts collected from startuptipsdaily.
2. What is involved in a Charcoal Business?
Charcoal business involves transportation of charcoal from a region of rich coal production to regions with high demand for the product for different important reasons.
Statistically speaking, in 2019, total imported coal to some countries rolled in billions of dollars.
Record shows that over 15 countries have imported the highest dollar value worth of coal during 2019. For example, Japan (US23.3 billion, 17.6% total imported coal); India: $23 billion (17.5%); China: $18.9 billion (14.3%); South Korea: $14.1 billion (10.7%); Taiwan: $7 billion (5.3%); Germany: $4.5 billion (3.4%); Netherlands: $4.4 billion (3.4%); Turkey: $3.6 billion (2.7%). – (Facts collected from World Stop Export).
Nigerians export mostly to popular export countries like the United Kingdom as well as some Asian Countries. Seeing the above figures, you would agree with me that a lot of investors in this business are cupping in lots of money.
3. Why do these foreigners buy Charcoal?
You may wonder, exactly what do they buy these charcoals for?
If not for any other reasons, the fact that most Asian and European live in very cold and long winter seasons. The weather is freezing cold enough to require heating up the surrounding so as not to freeze to death.
Although there are some other sources of energy that keeps them warm like geothermal heat pumps, heating oil, pellet stoves, solar heating, under-floor heating etc (YGREEN)
This is why it makes perfect sense for them to require charcoal also as a cheap (cheaper than an incurred electric bill) means for keeping warm.
4. How much it may cost to start Charcoal Exportation Business?
While you can not venture into the business with $0, the cost of starting up a charcoal exportation business depends on what stage you may want to start from.
There are 3 options to pick from and these depends on your current financial capabilities.
1. If you already have trees, you need to burn them and begin the process of exportation. This stage actually involves very low capital to start.
2. Buying charcoal from different producers and reselling to exporters.
If you do not have the initial expected capital or probably have international charcoal importers, you want to focus on the second option which requires you to the front as a supplier of the charcoal to other exporters who have business contacts overseas.
There are many exporters who do not have time to search for producers. So you venture into this especially if you have several producers to alternate.
3. Exporters in this category have producers who make available the charcoal at a cheaper rate, while they export to their ready overseas customers.
Depending on what you are capable of handling at the moment, you want to fit into a staging base on your capability or available option easy for you. Although you can start with lower capital, you may also require between N400,000 to N1,500,000 to start at a reasonable level.
5. How to start Charcoal Exportation Business
In one of our post, we dealt with some things you should know as a first time exporter how to start exportation business in Nigeria
Register your business name with CAC & NEPC
In Nigeria, you may not be able to run a successful exportation business, generally, without first getting your business name registered with Corporate Affairs Commission (CAC) and also getting your exportation business registered with the Nigeria Export Promotion Council (NEPC).
6. Where to Source Charcoal locally in Nigeria
Charcoal exportation can be sourced in a few locations in Nigeria. As we continue to discover more places, we would continue to update our post.
However, if you have any idea about where charcoal could be sourced from other parts of the country not mentioned in this post right now, please feel free to drop it in the comment section.
Some places in Nigeria are known for the production of Charcoal for export. The few places we have actually gathered from reliable sources are as follows.
Iseyin Local Government Area, Saki Local Government Area, and Itesiwaju Local Government Area, all in Oyo State.
You want to make adequate enquiries as these areas are not quite far from Ibadan. You have at most between 2 – 3, 4 hours from Ibadan.
Other known charcoal depots are found in places like Igbo-Ora, Ogbomosho, all in the western part of Nigeria.
Other location includes Jebba, Omu Aran, Egbe, Kabba in the Central States and also in abundance in Minna, Jos and Kaduna.
While sourcing for charcoal in these places are certain, it is understandable that you may be put under several conditions that may pose delay and if not careful, total loss especially while trying to ascertain that you are genuinely in the business.
So, you may want to source for reliable suppliers of Charcoal by putting up a call through to us for details, as this will make it faster for you.
7. Sourcing for International Buyers of Exported Charcoal
Now, you have your business registered and have been able to source suppliers and have your products ready for supply. The next question that comes to mind is where and how to actually find buyers for your Charcoal.
There are some online platforms where you can actually source for international buyers of charcoal for exportation to their countries. You can find them on Social Media (in some Facebook groups or pages); exportersindia, Alibaba, LinkedIn, etc.
You may source for international buyers for your charcoal as you deem fine by you, close deal with your buyer and contact JSK INTERCONTINENTAL SERVICES LTD for a seamless exportation experience.
Let’s take you through a whole new perspective exporting your Charcoal to any location of your desire.
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Original Author: Bowa-Gate Global
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