How to start a charcoal export business in Nigeria
I’ve met a lot of people who want to venture into exportation. When asked about what they want to export, most talk about shoes, bags, etc. Those things are not bad. Very few talk about exporting items like charcoal which could actually be a good source of generating revenue.
The fact is, many people don’t know charcoal is being exported from Nigeria. Even the few that know and want to start exporting don’t know how to start or go about it.
So, today, you’ll know how to start a charcoal export business in Nigeria.
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First off, what is charcoal?
Charcoal is the remains of firewood after it has been exposed to fire in its solid state.
The remains of firewood after being exposed to fire can be in ashes.
Ashes are not charcoal.
However, some variations like charcoal briquettes are made from coconut shells…
Still talking about Charcoal, there are four types of charcoal you can export. They are…
Charcoal Briquettes
Hardwood Charcoal
BBQ Charcoal
Shisha Charcoal
You might be asking, “what is charcoal used for in Europe?”
Many Asian and European countries need charcoal to heat their homes. Remember, they live in cold and long winter seasons.
They have other sources like pellet stoves, geothermal heat pumps, etc, but Charcoal is cheaper.
Charcoal is also used as an additive for toothpaste production.
Why Nigerian Charcoal?
Well, Nigerian Charcoal is so much in demand in foreign countries because it is made from hardwood.
Charcoal from hardwood last longer and also produce more heat than charcoal made from other types of wood.
Okay! Now, to the nitty gritty.
How do you start your charcoal export business in Nigeria?
1. REGISTER YOUR BUSINESS: Let’s assume you have the capital, the first step to take in becoming a charcoal exporter is to register the business with Corporate Affairs Commission. You have to do this as a Limited Liability Company.
If your business is not a Limited Liability Company, you may not be allowed to register with the (Nigerian Export Promotion Council) NEPC, and so, you can only function as an exporter with a registered Limited Liability Company.
Registering your business with CAC makes you more credible than an unregistered member company.
Why Register with NEPC?
Well, NEPC supervises all export businesses in Nigeria. You must register with them.
2. PRODUCT SOURCE: If you don’t have access to trees or forests where carbonization can be done, it’s important to know places in Nigeria where you can get charcoal.
These places are Jebba, Kaduna, Jos, Minna, Egbe, Oyo, Nasarawa, and several others. Charcoal is produced in high quantity in these places.
When you’re sourcing for charcoal, make sure the ones you buy meet International standards. Some buyers check the moisture level, ash level, and other requirements.
3. KNOW YOUR EXPORT COUNTRY: This is mostly neglected by many. It’s important you research information about charcoal in the country you intend to export to.
Do they have laws or policies on Charcoal?
Do you know the policy of export in Nigeria?
These are what you should know to avoid breaking laws and going into trouble. Be well informed.
4. SOURCE FOR BUYERS: There’s no export without foreign buyers. So when you are looking for buyers, focus more on countries that have a high demand for charcoal. Most are in Europe and Asia and they demand more than other countries.
You can get International buyers on websites like:
www.exportersindia.com
www.alibaba.com
Note that you have to register on these websites.
There are other websites too. Social media platforms are also good if you’re in the right group. Source for them.
5. EXPORT YOUR PRODUCT: The final step is for you to start the exportation of the charcoal.
What this means is sending it to the countries where they are needed.
You can do these in two ways:
Free on Board (FOB) basis: When you export using the Free On Board (FOB) basis, you will bear the cost of every expense up to the shipping point.
Cost, Insurance, and Freight (CIF) basis: On the Cost, Insurance, and Freight (CIF) basis, you will bear the transportation and insurance costs up till the final destination.
Note that immediately after you receive an order, you’ll need a shipping company to work with to help you transport your product to your buyers.
Sometimes your buyer will tell you how to package the product.
Some may ask that you ship them in bulk while some others may decide that you package them in small units for them to handle easily. For instance, charcoal is being packaged in 25kg bags which is the standard in international export. But some buyers may demand you package them in 10 kg and 5 kg sacks
Finally, you might be asking, how profitable is Charcoal business?
Let’s do the Math…easy Math
A 40ft container of charcoal contains about 21 tons of charcoal.
If packaged in 25 kg bags, a ton of charcoal contains 40 bags. A 40ft container carries 840 bags i.e 40kg bags multiply by 21 tons.
Locally, the price of charcoal depends on your location and strength in negotiations. A bag of unprocessed charcoal costs between N4,000 – N5,000 while a sack of processed charcoal costs N7,000 – N8,000.
In the International market, the prices range between $200 – $600.