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Export Opportunities in the Non-Oil Sector: A Spotlight on Shea Butter

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The Fidelity SME Forum is a weekly radio programme organized by Fidelity Bank Plc., to educate, inform, advise and inspire budding entrepreneurs in Nigeria with knowledge and expertise that will enable them build sustainable and successful businesses. The interactive radio programme features Subject Matter Experts and Model Entrepreneurs as guests on a weekly basis to share their insights and unique success stories. In this interview, Mrs. Mobola Sagoe, CEO, Shea Origin, shared her thoughts on the ‘Export Opportunities in the Non-Oil Sector with a Spotlight on Shea Butter’.

Q: How did you get into your Shea business and how has it progressed so far?

A: As an institution for 30 years now, though I’ve been into skin care products since 2004. Basically, we’ve been into all natural products. Most of the time, I keep thinking how I can bring this into Nigeria rather than leave my products abroad and then they import it into Nigeria. So I went into thinking of the natural resources that we have for cosmetics and I realized that we have Shea. Then I decided to form the company, Shea Origin. In forming the company, I had the opportunity to go to Ghana, because at the time, the shea industry wasn’t the best in the sense that quality wise they were not there yet. I went to Ghana and I was able to get more information on how I could source for my shea butter to produce my skin care products. So we started off from there. As time went on, I decided that I would sort out the Nigerian market so that the issues of exporting and importing would just be at a standstill; let me stop importing my products, take the opportunity we have in Nigeria and use it for my own good and the good of the rest of the Nigerians. So we went to Oyo to investigate the quality of their shea butter, taking along the Ghanaian shea butter. I visited some women and spoke to them about improving the quality because I wasn’t too pleased with their environment. We put together a training programme for them, showed them the butter that we had in hand from Ghana and they were able to at least match it to a certain level but it still wasn’t good enough. We started thinking of the different options of processing very good quality and also exposing it to the government. In Saki (Ibadan), we bumped into a center that was redundant and that was how Shea Origin sort of kicked up and we started training women and basically trying to put together a group of women that would be able to listen, because a lot of times, women in the villages take their time to actually catch on. In finding out that there is actually a mini processing center put together by the NEPC, World Trade Organisation (WTO) and ITC, I investigated further to see how we can actually help them to source butter in that particular center.

Q: Where do you export to and who are your customers?

A: So far we have exported to the US; one of our customers is Shea Radiance. We have exported to Canada and we are about to go to the UK, though the export to the UK is actually finished products.

Q: Do you actually produce and supply Shea Origin products here in Nigeria?

A: Yes. We supply major supermarkets such as Goodies; K-Mart in Ikoyi, Mega Plaza, and more. For hair care, we have only just started and we have supplied the All Natural Hair Salon in Abuja. We also have our products in some hotels at the moment and in my spa as well. We’re working it out because the opportunities are there. There are loads of things we can do with shea in the cosmetic industry, especially in the confectionaries industry. We haven’t gone into confectionary yet, but I can assure you that there are loads of companies in Nigeria working on producing refined butter. At the moment, we are only producing raw shea butter.

Q: To access the US market, how easy was it and what processes did you go through?

A: Well, we have gone through the Global Shea Alliance (GSA), because I am a sustainability partner of the GSA and I believe they are always very supportive. You need to talk to the right people and go through the right channel. Global Shea Alliance has given us quite a lot of contacts in the past and they are still doing so and they are always willing to share information of people who are looking to buy shea butter. The only concern for most of the international buyers is quality and in Nigeria we have improved on quality.

Q: Once you meet the quality standards, how do you handle the sales? Walk us through the first sale you made.

A: As for the first sale we made, the buyer asked for a sample; a kilo of shea butter which we sent over and she tested it. Before we sent it, by the way, I was very worried at the initial stage how we would send it to the US and whether they would reject it because of the quality. I was a bit nervous about it. So we tested it at SGS Ghana, even though SGS has an office here in Nigeria, but they don’t have a lab here. So it was tested in Ghana and then we sent the 1 kilo to Shea Radiance. She came back telling us that it was very good quality and so for that reason she put her order through and we signed an MOU with her. She prepaid in foreign currency.

Q: How did you send it? By ship or by air?

A: The initial challenge was whether we would send by air or by sea. It wasn’t enough quantity because she was obviously trying to see if she could do at least 2 tons or a ton and a half. She decided to do a ton and a half. Putting a ton and a half in a whole container wouldn’t be enough; the container would be more or less empty. So we started looking for other people who would help us with that. When we couldn’t find anyone, we more or less started sending through people who were going abroad. It’s a challenge in that industry when it comes to exporting small quantities.

Q: Have you built up to the level where you are exporting in containers now?

A: We got an order for 15 tons and we are working on that at the moment. We also got another order recently for 40 tons and we are still working on those two. For the 40 tons, all of it didn’t come from our center. I have always looked at the shea industry as a collective contribution, so to speak. We all come together and say look “this is what I have at the moment, why don’t you produce this quantity for me?” This is the reason why the whole shea sector in Nigeria should really come together as one. We cannot afford to say we are doing our own thing, because there will be a time when one center might not be able to produce the quantity that is required by a particular customer. It’s a Nigerian thing. We should just be supportive of one another.

Q: Where is shea available in Nigeria and for those who want to enter the space, where can they find Shea?

A: They can find Shea in Niger, Kebbi, Adamawa, Kwara and Oyo states. There are 21 states actually and if you are able to contact us as NASPN, we will be able to help out by giving information on shea products and also where you can source shea nuts, not just the butter. You can source the shea nuts from a cooperative rather than a third party. A lot of people tend to do that and then the price of the nuts become really high. We are working together to get cooperatives for the nut pickers. If you get them into groups, then you are able to identify where the nuts are coming from. You are able to also have a sustainability chain where quality is being put together properly; we’re able to raise the standards for the sector and put up an organisation where at any point in time, the challenges will be resolved.

Q: For the people involved in the cosmetics and skin care industry who want to be part of this business, how can they get in touch with you?

A: They can email us on [email protected] NASPAN is the industry association for shea butter.

Q: On the last episode, we were talking about the industry crisis and how that is creating opportunities for Nigerian exporters because our products are more competitive in the global market, relative to other countries that produce shea. What has been your experience with that and are you seeing more interest in Nigeria now?

A: There’s a lot of interest in Nigeria at the moment, but people are still a bit more concerned about the quality and for that reason, we are trying very hard with ambassadors out there to let the international world especially, know that the quality of shea in Nigeria has changed and is still changing because everyday we are working on one certification or the other; making sure that the standard and everything else has been sorted out. Regarding the export value, at the moment, we’re supposed to be exporting about 400,000 tons of nuts. If we are able to put 50% of that into shea butter, we are able to get about 66,000 tons of butter. If Nigeria is able to export the 66,000 tons of butter, I believe it will work out to be about 1 to 3, looking at the ratio of nuts to shea. If we take that 200,000 tons of nuts, export it, it will be less money, but if we process the 200,000 tons of nuts into butter at 66,000 tons of butter, it will earn us a revenue of $99 Million. That is just scratching the surface. The only way to get around this is for us to build more centres and the government needs to get involved; the NEPC needs to support us a bit more. They need to be able to say they are going to go out there and look for buyers. We can’t only rely on Global Shea Alliance. Yes, they are global but they help everyone in the shea industry in Africa. Also, we need an organization that can put together good quality butter for us, knowing that everyone that is processing shea has been certified to do so, and the butter coming out of Nigeria must go through a particular process and we must all have that certificate. If the NEPC can do that for us; go out there and show the world what we have on the table, I believe the export value for Nigerian shea will go up.

Q: Apart from shea, what other export opportunities would you say exists for entrepreneurs?

A: If you are looking into only the shea industry, you can also look into producing your own products, because you can as well export your own finished products. You just need to work out the role you want to play; the part in the shea industry that you have interest in or what you can afford to do. There are different sections of the shea industry that you can go into.

Q: For somebody that doesn’t have any experience in the shea butter business, where does the person start from?

A: Lately, we have been talking about training people who are novices in the industry. You can send us a mail on [email protected] and someone will give you details on when the next training will be coming up and then you can join the group and we will give you knowledge on the shea business and how you can move on.

Q: You said earlier that there are so many states in Nigeria that have shea butter, yet many of us take it for granted. So if people from those areas want to go back and find where the shea butter is, how do they go about that? Is there a database or a cluster mapping?

A: We are actually working on a database. We are also going to start giving a lot of information online, especially on our website. We can say for a fact that in the very near future all of the questions being thrown out there on shea will be available for people to access easily.

Q: As you think about this industry five years from now, what are your hopes and what can the government do to promote export in Nigeria?

A: First of all, they need to help the SMEs. I believe the SMEs should be exempted, at least for a year or two, from all the tax rebates. From doing that for them, it will help them to grow a little and then after that they can start coming up with all the revenues that government is looking for. Warehousing is also key. In the shea industry, if you do not have a warehouse as a corporative, there is no traceability and the women will store their nuts anywhere. That alone can contaminate the nuts. The whole idea is to have something like a shea hub where there’s an aggregation center and we can store our nuts and the processors can actually come directly to the source, pick up their nuts and go. That way there won’t be issues of bad nuts. We also need NIFOR (Nigerian Institute for Oil Palm Research) to come on board, to help us get seedlings for shea trees.

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