Introduction to Cassava Chips and Cassava Chips Production Business

Cassava chips are dried, unfermented products made from sliced cassava tubers. They are commonly used as a carbohydrate base in industries like animal feed, food processing, and ethanol production. The versatility of cassava chips allows them to be milled into flour for use in starch, adhesives, and bakery products. Cassava chips also play a major role in industrial ethanol production and pharmaceutical applications.

Nigeria, the world’s largest producer of cassava, is well-positioned to capitalize on the growing demand for cassava chips locally and internationally. Starting a small-scale cassava chips production business is both viable and profitable, with opportunities to supply industries like livestock feed, food processing, and ethanol production across various markets.

Industry Analysis of Cassava Chips Production Business

Local Demand

Cassava chips are in high demand in Nigeria’s animal feed industry, especially as livestock farming grows. Additionally, they serve as raw materials for ethanol production, starch production, and other food-processing industries. The estimated annual demand for cassava chips in Nigeria exceeds 3.5 million metric tonnes (MT), highlighting the immense market opportunity for local producers.

Export Opportunities

Internationally, cassava chips are in demand in regions like Asia, Europe, and the Middle East. China is the largest importer of cassava chips, consuming over 20,000 MT annually. These chips are used in the production of ethanol, animal feed, and food-grade products. Nigeria’s position as a major cassava producer offers a competitive advantage in meeting the growing global demand for cassava-based products, particularly as many nations look to diversify sources of carbohydrates for their industries.

Step-by-Step Guide to Setting Up a Small-Scale Cassava Chips Production Business

1. Conduct Market Research

Before setting up your cassava chips production business, it’s essential to conduct thorough market research. Identify your target market—whether it’s local industries (such as animal feed manufacturers) or international buyers. Research the competition, pricing trends, and potential distributors. Understanding the market will help you refine your business model and position your product competitively.

2. Develop a Business Plan

A well-documented business plan will outline your goals, target market, production capacity, and financial projections. Your plan should cover:

• Target market: Local and export buyers.
• Capital requirements: Equipment, factory setup, raw materials, and operational costs.
• Revenue projections: Expected sales based on market demand.
• Marketing strategy: How you’ll reach potential customers and establish distribution networks.

This plan is essential for securing financing or investment for your business.

3. Choose a Suitable Location

Choose a location near cassava-producing regions such as Benue, Kogi, Cross River, Ogun, and Enugu​. Proximity to raw materials will reduce transportation costs and ensure a steady supply of cassava tubers. Additionally, the factory should have access to good infrastructure, including water, electricity, and transportation networks to distribute the finished product.

4. Procure Equipment and Raw Materials

The primary raw material for cassava chips production is cassava tubers. Other materials include water and packaging supplies. The essential machinery needed includes:

• Cassava Peeling and Washing Machine: For peeling and washing the cassava tubers.
• Cassava Chipping Machine: For slicing the cassava into smaller sizes for quicker drying.
• Drying Machine: For drying the sliced cassava.
• Weighing Scale: For weighing the final product.
• Sealing Machine: For packaging the dried cassava chips.

The total cost for setting up a small-scale cassava chips production facility is estimated at ₦13.1 million, which includes factory rent, machinery, and working capital​.

5. Establish the Production Process

The cassava chips production process follows these steps:

1. Peeling and Washing: The cassava tubers are washed and peeled using the peeling and washing machine.
2. Chipping: The peeled cassava is cut into smaller pieces using the cassava chipping machine to speed up the drying process.
3. Drying: The sliced cassava is transferred to the drying machine for dehydration. This process takes a few hours, depending on the moisture content of the cassava.
4. Packaging: The dried cassava chips are weighed and packaged into 50 kg bags for sale or storage​.

6. Implement Quality Control

Maintaining high-quality standards is crucial for producing cassava chips that meet industry requirements. Regularly inspect the cassava tubers for defects, ensure that the production facility is clean, and monitor the drying process to achieve the desired moisture content. Quality control ensures that your cassava chips are free from contamination and ready for both local and international markets.

7. Develop a Marketing Strategy

To succeed in the market, your marketing strategy should focus on both local and export customers. Key strategies include:

• Targeting Local Industries: Build relationships with livestock feed manufacturers, ethanol producers, and food processing companies that rely on cassava chips.
• Export Opportunities: Partner with export agencies or distributors to access international markets, particularly in China and other cassava-importing countries.
• Online Marketing: Use social media and online platforms to promote your cassava chips business and reach potential buyers.

8. Secure Funding

Starting a cassava chips production business requires substantial capital for equipment and working capital. If you don’t have sufficient personal funds, consider seeking bank loans, applying for government grants, or partnering with investors. Your business plan will play a key role in securing financing.

Profitability of the Business

The profitability of a cassava chips production business depends on the cost of cassava tubers and the efficiency of your production process. As of the time of writing, the average cost of cassava is ₦60,000 per ton​. To produce 1 ton of cassava chips, you need approximately 4 tons of raw cassava.

• Production Costs: It costs around ₦240,000 to produce 1 ton of cassava chips.
• Revenue: The average factory price for cassava chips is ₦300 per kilogram, meaning 1 ton generates ₦300,000 in revenue.
• Profit: After subtracting production costs, the gross profit per ton is ₦60,000. Once operating expenses (estimated at 20%) are deducted, the net profit is ₦48,000 per ton.

With a production capacity of 6 tons of cassava chips per day, you could generate a daily profit of ₦288,000, translating to a monthly profit of ₦3.6 million assuming 25 working days at 50% capacity​.

Key Profitability Factors:

• Raw Material Costs: The price of cassava fluctuates with the season, so purchasing during harvest times at lower prices can improve profitability.
• Market Expansion: Exporting cassava chips to high-demand markets can increase profit margins.
• Production Efficiency: Optimizing your production process to minimize waste and increase output will boost profitability.

Conclusion

Starting a small-scale cassava chips production business in Nigeria offers significant potential for profitability, driven by high local and international demand. By following the steps outlined in this article and ensuring high-quality production, entrepreneurs can build a successful business that serves multiple industries.

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