Read Opportunities in the Industrial Cassava Market in Nigeria text version

Opportunities in the Industrial Cassava Market in Nigeria

Henk Knipscheer, C. Ezedinma, P. Kormawa, G. Asumugha, K. Makinde, R. Okechukwu, and A. Dixon

International Institute for Tropical Agriculture 2007

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Contents

Contents...........................................................................................................................................2 Acknowledgements..........................................................................................................................4 Summary..........................................................................................................................................5 Recommendations............................................................................................................................5 Introduction......................................................................................................................................6 Background..................................................................................................................................7 Problems and issues relating to cassava...................................................................................7 The challenge and commodity development strategy..............................................................7 Methodology................................................................................................................................8 Market Structure..............................................................................................................................9 Traditional Market.......................................................................................................................9 Industrial Products.......................................................................................................................9 Flour.......................................................................................................................................10 Feed........................................................................................................................................10 Ethanol...................................................................................................................................11 Starch.....................................................................................................................................11 Market participants....................................................................................................................12 Processing......................................................................................................................................13 Processing methods....................................................................................................................13 Processing costs and profitability..............................................................................................16 Location of processing plants....................................................................................................18 Transportation Costs..................................................................................................................20 Market prices of cassava intermediate and final industrial products and those of competing products..........................................................................................................................................21 Domestic prices..........................................................................................................................21 Roots......................................................................................................................................21 Chips .....................................................................................................................................22 Flour ......................................................................................................................................23 Starch.....................................................................................................................................23 Ethanol...................................................................................................................................24 Seasonality.................................................................................................................................24 World market: competition from other cassava producers and substitute produts .......................25 Market Potential.............................................................................................................................27 Domestic market........................................................................................................................27 Present condition ...................................................................................................................27 Chips/pellets...........................................................................................................................27 Flour.......................................................................................................................................27 Starch.....................................................................................................................................28

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Ethanol...................................................................................................................................28 Potential.....................................................................................................................................29 Starch.....................................................................................................................................29 Cassava Flour.........................................................................................................................30 Cassava chips/flour for animal feed.......................................................................................30 Ethanol...................................................................................................................................31 Export Market............................................................................................................................31 Conclusion and Discussion............................................................................................................34 Focus on Domestic Market........................................................................................................34 Impact of domestic focus on employment.............................................................................35 Partnerships with the private sector...........................................................................................36 Nucleus Farm and Cluster Partnership Model.......................................................................36 References......................................................................................................................................38 Appendix A....................................................................................................................................41 Appendix B....................................................................................................................................43 Appendix C....................................................................................................................................47

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Acknowledgements

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Summary

The following survey provides comprehensive information that will guide investment decisions in the cassava sub-sector. Specific objectives of this survey are:

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Evaluate the marketing system and prices to identify technical, institutional, socioeconomic and policy opportunities and constraints to domestic industrial utilization of cassava and to exportation; Estimate the economics of cassava production and processing price structures (and profitability) of value adding enterprises; Assess the domestic and export market opportunities for cassava products (cassava chips, flour, starch, pellet, etc.) in Nigeria and suggest how this potential can be realized; Assess the comparative advantage and competitiveness of cassava for agro industrial use in Nigeria and for export market using profitability and domestic resource costs analysis; Determine optimal locations of processing plants based on identified markets for various cassava products with domestic or export market potential; Provide recommendations on how to make cassava and cassava products (chips, flour, starch, pellets) competitive on both the domestic and export markets.

This study is a component of an integrated project proposal that aims to develop the cassava commodity chain in Nigeria with emphasis on market or demand based interventions. Through this approach, the focus of the project will hinge on the identification of markets, through detailed market and sub-sector analysis for food, feed and industrial uses. Once markets have been identified, the project will link with appropriate technology developers to match the market demand with the required technology and quality. Thus, ensuring that an adaptive technology transfer based on market-demand approach is promoted. At the central point of this strategy are the private sector agro allied industries.

Recommendations

General: The future of cassava production and economic growth of the cassava sub-sector is dependent on the competitive position of Nigerian cassava on the global market place. Presently, Nigerian cassava products are not yet price competitive. However there are ample indications that technically Nigeria could be a cassava market leader as climate, market, high yielding planting materials and improved processing techniques are known and available. The question is whether the various industrial stakeholders can utilize these advantages in order to transform the cassava sector from a largely low input traditional sub-sector, geared for subsistence, to one that is market-driven and aims at income generation. In Thailand, the various stakeholders have been able to organize themselves and have formed industrial associations. These organizations (e.g. trade and industrial associations) are providing information, facilitating and providing selfregulatory services that have greatly benefited Thai cassava growers and processors. In Nigeria, there is a need for one or more non-governmental (or semi-governmental) agencies that can provide similar services to insure that cassava production becomes a vibrant sector of economy. Animal Feed: The livestock sector in Nigeria is expanding rapidly and a continuing rapid demand for animal feed is predictable. In view of the relatively high-income elasticity for meat 5

products, it is likely that this trend will continue during the reminder of this decennium. Processing cassava into cassava pellets has the advantage of both transport cost reduction and quality enhancement. The feasibility of a cassava pellet plant in Nassarawa, Benue and Kogi should seriously be further explored. Ezedinma et al (2003) conducted a preliminary analysis of the profitability of a cassava pellet enterprise in Nigeria and concluded that the benefit cost ration may be as high as 1.3 (i.e. revenues are expected to be higher than 30% of total costs (including the costs of capital items). Earlier other authors (e.g. Nweke et al (2002), and Camara et al (2001) emphasized the great need for mechanized cassava processing. Flour: The blending of cassava flour with wheat flour has occurred in the past, but due to the use of unreliable quality cassava flour, and the general negative reputation of cassava as a poor men's crop the blending is presently not being done. If it occurs, bakeries may not admit to using cassava flour. Managers in the confectionary industry are not familiar with the potential of cassava flour. They seem not familiar with some of the positive experiences in the past, and they do not know what specific recipes have worked and which have not. Thus, there is a need for a good information campaign for the confectionary industry. There is also need for continuing research and experimentation with new recipes that will allow the use of cheap domestically grown cassava, instead of the more expensive imported wheat flour that has to be paid for in foreign currency. Starch: Nigeria currently has two operational starch plants and the third one is scheduled to reopen next year. The key issue for these three plants is to reduce cost of raw materials. The launching of cassava technology transfer programs in the vicinity of these three plants requires urgent consideration. This is the highest present development priority for cassava production and processing in Nigeria as it offers the best opportunity for further processing into modified starch products as well as for potential exports. Ethanol: An ethanol plant is scheduled for construction in the Lagos area. Sourcing enough raw materials in the southern states where the urban demand for gari is high may prove a challenge. A feasibility study of sourcing raw materials from the central states, Kogi, Benue and Nassarawa deserves consideration. Ethanol production in the Lagos area may benefit from a pellet processing plant in the central cassava belt. This option should be part of a pellet cassava plant feasibility study.

Introduction

Nigeria is the largest producer of cassava in the world. It is estimated that in 2001 its production was about 34 million metric tons (MT) a year (FAO 2002) and possibly even 37.9 million MT (CBN, 2002). Total area used for harvesting the crop in 2001 was 3.125 million hectares with an average yield of 10.83 MT per hectare (FAO, 2002). There has been a remarkable increase since the mid-sixties when cassava production was estimated at 8 million MT, and the area at .83 million ha (Horton, 1988). Presently, cassava is primarily produced for food especially in the form of gari, lafun and fufu with little or no use in the agribusiness sector as an industrial raw material. However, the crop can be processed into several secondary products of industrial market value. These products include chips, pellets, flour, adhesives, alcohol, and starch, which are vital raw materials in the livestock feed, alcohol/ethanol, textile, confectionery, wood, food and soft drinks industries. Moreover, these products are tradable in the international market.

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In 2002, the President of Nigeria announced an initiative to use cassava as an export commodity to generate five billion Naira annually in export revenues. To achieve this goal, there is a need to develop the domestic market, diversify the use of cassava, and create national policies that will leverage cassava development in the country. Unfortunately, no supply chain structures exist for the commercialization of secondary cassava products as a primary source of raw materials for agro industries (Ezedinma et al, 2002). At the farm level, production costs for cassava are high relative to those in other countries. Production is not oriented towards commercial use; instead, farmers produce and process cassava as a subsistence crop. The current and potential demand for cassava and its secondary products as industrial raw material in Nigeria is neither known nor documented. To guide the commercialization of cassava such documents are important. The lack of a commercial approach to cassava production and marketing in Nigeria justifies a synchronized approach involving several partners in the development of the sector. It is imperative to provide data that will inform investors on the actual potential of the industrial cassava sub-sector. The development of the sector will also require initial activities in capacity building, product development, fabrication and transfer of processing technologies to target beneficiaries and development of clusters to supply identified markets.

Background

Problems and issues relating to cassava

Cassava is a tuberous root that contains 60 to 70 percent moisture and has a shelf life of 2 to 3 days. Once harvested, it has to be either consumed immediately or processed into more stable product forms. Cassava farmers are often unable to process harvested roots and have to sell their crop at a very low price to middlemen who are willing and able to reach them. Moreover, supply of cassava greatly influences the market price; as a result, when cassava is scarce and the prices are high farmers increase production, the subsequent oversupply lowers the market price and farmers plant less cassava which results in fluctuating price cycles of approximately two to three years (Nweke et al, 1994). Transportation of fresh products from the farm to a processing site is costly and is a major contributor to the cost of the raw materials for the processor. If farmers could harvest these crops and process them into stable commodities that could be stored for several months without fear of spoilage, they would earn higher prices during the periods of scarcity. Acquiring even simple processing equipment is an investment, which is out of reach for the majority of small-scale cassava farmers. Accurate processing cost data for existing processing methods and machinery do not exist. This has an effect on pricing of processed products as well as investment decisions. Where there is a clear-cut market for primary processed products, borrowing to acquire such equipment would be economically profitable, and would bring real benefits to the farmers or processors. Poor credit facilities and high interest rates, however, make such investments risky and financially unattractive, and hinder the development of the economic potential of the crop.

The challenge and commodity development strategy

The challenge for cassava industrialization/commercialization is to integrate the production and transformation into easily storable products that possess desirable quality attributes, and to market it at prices consumers and other end-users are willing to pay. This involves the

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identification of market opportunities, the organization and training of clients, including farmers, processors and traders to respond to the demands of existing and potential market opportunities, and the development of market information systems to facilitate increased access to, and the use of improved agricultural inputs. Such steps will generate effective business linkages and agricultural trade.

Methodology

A cassava sub-sector analyses was carried out through a review of existing documents and surveys. A sub-sector is understood as a vertical chain in the commodity flow from input supply through to consumption showing all stages and agents. It shows the links between producers and consumers through the processes of buying, storing, transporting, processing and selling the commodity. Sub-sector analysis was carried out to identify initial technical, institutional, socioeconomic and policy opportunities and constraints and to enable the introduction of technologies, which will improve cassava production, processing and marketing. The study addressed the structure, conduct and performance of the cassava sub-sector. Data was collected in three stages: first, wherever available, published data was used to establish the structure, conduct and performance of the cassava sub-sector. Second, a rapid appraisal survey was conducted using focused group interviews and key informants to obtain information on trading patterns, transportation facilities, processing costs and marketing systems in rural and urban areas. Interviews covered major participants along the marketing channel and agro-business entrepreneurs. A list of enterprises and offices visited can be found in Appendix B. Third, the findings were presented and discussed with a group of stakeholders. During a half-day workshop their feedback was solicited. Appendix C contains the list of workshop participants. Industrial demand analysis was conducted in three stages. First, the present demand for industrial products in the four main industrial cassava sub-sectors was estimated. These subsectors are cassava starch, cassava flour, cassava for animal feed and the food grade ethanol market. Second, the additional demand derived from potential import substitution of competing products was estimated. Third, the potential export demand was estimated. Based on these findings recommendations on the optimal location for cassava processing plants are presented.

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Market Structure

It is possible to broadly distinguish two markets, i.e. the traditional food-oriented market and the new emerging market for industrially processed cassava. The vast majority of the cassava grown in Nigeria is processed and sold through traditional market channels, which are well known. Much less is known about the market structure for industrial cassava. The latter market is the focus of this study.

Traditional Market

Lemchi (1999) gives a very comprehensive description of the traditional cassava market in Nigeria. Cassava is usually traded in some processed form, generally gari. It is estimated that 70% of the cassava produced in Nigeria is processed into gari. As a result, gari is the most commonly traded cassava product. The gari prices, therefore, are a reliable indication of the demand and supply of cassava. The market channel for gari consists mainly of three alternative flow channels. First, there is the flow from village gari producers through the rural wholesale/assemblers and rural retailer to the rural consumer. The second movement is from gari producers to the rural assembler to the long distance trader who delivers to urban retailers or directly to urban consumers. A third flow is the traffic from gari producers directly to distance traders, thereby bypassing the local assembler. Other relevant processed cassava foods in the traditional (food) market include fufu, lafun and abacha (Onabalu, 2001). An important consideration during the processing of cassava is the breakdown of toxic cyanogenic glycosides. These cyanide levels are reduced by (a) the mechanic breaking of the cell walls during any process of grating, milling and/or pulverizing, and/or (b) by exposing the roots to temperatures above 26 degrees Celsius at which the hydrocyanic acid (HCN) volatilizes. Gari is fermented, dried and toasted and therefore does not contain any cyanide. Chips, however, may still contain cyanide, depending on the duration of drying of chips. Cassava products after milling (e.g. flour and starch) contain no cyanides whatsoever. Also chips milled into animal feed are void of cyanide. Nevertheless, it is common practice in villages to feed fresh cassava peels to goats and pigs, and there are no reported cases of death due toxic poisoning (Onabolu, personal communication). For further information on the traditional cassava practices an excellent reference material is the recently published book by Nweke, Spencer and Lynam, The Cassava Transformation (2002). The other work is the publication by Cock, Cassava, New Potential for a Neglected Crop (1985).

Industrial Products

Figure 1 represents the generalized market structure for the industrial use of cassava. There are four major potential markets for industrial processing, i.e. (1) the cassava flour market, (2) the chips or pellet market for animal feed, (3) the food grade ethanol market, and (4) the starch market. The starch market can be divided into two sub-markets, i.e. the native starch market and the modified starches. The production of dextrin is one example of a modified starch.

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Cassava (fresh)

Traditional food market (e.g. gari, lafun) Chips Flour

Consumers

Confectionary Industry Feed Industry

Crude Alcohol Starch

Ethanol

Distilleries

Processed Foods Textile Industry Pharmaceutical Industry Dextrin Paper/Wood Industry

Other Modified Starches Various Industries Figure 1. Market Chain for Industrial Cassava Products

Flour

Cassava flour can be used as partial replacement for many bakery and pasta products. Since 1996 the Natural Resources Institute in collaboration with the Ghanaian Food Research Institute and the University of Ghana have conducted a series of tests with bakeries in Accra. The research demonstrates that high quality cassava flour can be incorporated into common snack foods such as biscuits and cakes, and that such substitution is acceptable among a wide range of consumers. Bakeries limit the amount of substitution to a maximum of 50% in order to avoid brittleness. Brittleness is a problem with food items such as biscuits when more than 50% cassava flour is being used (Phillips et al, 1999). Several sources report that at least 10% of the wheat flour used for baking can be substituted by cassava flour without change of taste or other qualities (e.g. Phillips et al, 1999; Grace, 1977). The successful substitution of wheat flour by cassava flour has also been confirmed by the National Root Crops Research Institute in Nigeria where up to 15% of the wheat has been replaced by cassava meal. The substitution ration greatly depends on the quality of the cassava flour. Gensi et al (2001) report that a large number of bakeries in Uganda have tried cassava flour in their products but have subsequently stopped the use because of poor flour quality resulting in final food products with undesirable cassava flour color and odor. In a subsequent study, Ferris et al (2002) confirm these findings.

Feed

Cassava, like feed grains, consists nearly completely of starch and is easily digested. Therefore, it is commonly used for feeding pigs, ruminants and poultry. However, because of its deficiency

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in protein and vitamins, it must be supplemented by other feeds. The cassava-based feed industry in Thailand is often cited as the shining example of a tropical country that has been able to transform cassava from a traditional food crop into an industrial crop (Plucknett et al, 2000). In the late sixties and increasingly during the seventies, Thai cassava meal was exported to the European Union (EU) member countries where the prices of feed grains were kept high because of substantial import duties. The European feed industry responded to the high tariffs on feed grains by massive importation of both cassava meal and soybean meal since the combination of cassava meal and soybean meal at a ration of about 80:20 is equivalent in energy and protein to grain feeds such as maize and barley. In the late sixties, the Thai industry shifted from cassava meal export to processing of meal into pellets by changing its processing system. Presently, chipping and drying are done close to the farm. On the other hand, starch processing is done at large-scale factories. Middlemen collect chips from thousands of farmers and process these into pellets. The processing into pellets reduces the volume by about 20-25% and therefore reduces transportation cost. During the nineties, the EU withdrew its preferential treatment for cassava/tapioca pellets and the Thai export of pellets to the EU practically stopped. However, by that time the Thai industry was so well organized, efficient and competitive that it could diversify into starch and starch-based products. These are now exported to countries such as Australia, Taiwan, Japan, China and Malaysia.

Ethanol

Cassava is one of the richest fermentable substances for the production of crude alcohol/ethanol. Ethanol can be made from various carbohydrate materials including cassava roots, cassava starch, other starches or ingredients such as molasses. Dry chips may contain up to 80% of fermentable substances (starch and sugars). Grace (1977) reports that crude alcohol from cassava is used mostly for industrial purposes such as the cosmetic and pharmaceutical industries. To produce ethanol for human consumption roots must be void of hydrocyanic acid. In that case dried chips are used as raw material.

Starch

Starch makes up most of the nutrients of the cassava plant. During the growing season solar energy is converted into sugar that is again converted into starch in the form of very small granules. Cassava starch is a food grade product refined from cassava roots through a processing process that requires significant quantities of good quality water (from 3 cubic meters of water per MT fresh roots (Phillips et al, 1999) up to 15 m3 per MT fresh roots according to Grace (1977)). Starch has thickening and binding qualities. It is used as binder and thickener in convenience foods including bouillon cubes and baby foods. In the textile industry starch is used as yarn sizer and as a finishing agent. It enhances the weaving efficiency as it permits the loading of the fabric in such a way that the sizer is neither visible nor perceptible. In the textile industry, cassava starch is considered preferable to corn starch as the latter gives a dull finish and may change the color (Source: Spac, www.spacgroup.com) Starch makes good adhesives. One way of producing an adhesive is to process high quality starch into dextrins. Dextrin is a granular starch prepared through a roasting process (Ferris et al, 2002). Only the purest starch with a low acid factor can be used to produce dextrin. Dextrin is used as high quality adhesives in non-food industries such as corrugated cardboard, paper, furniture and plywood.

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Other examples of modified starches are dextrose and glucose. Dextrose and glucose are examples of sweetening agents. These are used in many candies such as jellybeans, toffee, gum and other kinds of sweets. Dextrose is also used in the fruit canning and jam industry (Grace, 1977).

Market participants

The fact that fresh cassava is both very perishable as well as very voluminous determines the role of each of the group of participants in the cassava market. Local processing and transport are key services that need to be performed efficiently. These are the key issues in the whole cassava value-chain process from the production of fresh roots until the use of a cassava ingredient by the final consumer. A main challenge is to decide on the trade off between the cost of transportation (for the collection of fresh roots) versus the economies of large scale processing. The market participants can be categorized as six major groups, i.e. producers, local processors, industrial processors, traders/transporters, retailers, and consumers. Each group must deal with the problem of rapid post-harvest deterioration of the fresh roots. Table 1 shows generic strategies each group may pursue in order to minimize post harvest losses. Table 1. Strategies to prevent rapid post-harvest deterioration of fresh roots

Producers: Delay harvest Process roots into intermediate product (chips) Process roots into final product, e.g. gari or lafun Locate plant close to production area Limit size of plant to small or medium scale Buy standing crops Diversify processing among products Develop contractual arrangements with buyers Trade in small quantities Trade at high margins in order to recover losses Process into storable product (chips) Secure sale contract before buying roots Sell in small packages Substitute fresh cassava by processed product Improve household storage (e.g. refrigeration)

Processors:

Traders:

Retailers: Consumers:

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Processing

Presently the vast majority of cassava roots are processed at the village level by a variety of small-scale methods into many different products that cater to local customs and preferences. Smallholders who deal only in small surpluses (Oyebanji et al, 2003) produce over 80% of the cassava. Consequently, large-scale assembly that is able to process roots quickly is not feasible. Medium and large processing plants are forced to operate seasonally and at low capacity. The traditional market for cassava products is geared to low-income consumers. As the Nigerian economy further develops the question emerges if the quality of various processed products can be improved sufficiently in order to make these attractive to the growing market of higher income consumers ­ without significant increases in processing costs "which are already high" (Nweke, 1994). Although women typically do all of the small-scale processing, men generally own mechanized processing equipment (graters and grinders) (see www.globalcassavastrategy.net). Fresco (1993) confirms that cassava processing is very labor demanding and constitutes a heavy burden on women. She advocates an urgent need for laborsaving processing techniques. Nweke (1994) determines the positive production trend between the increase in cassava production and local availability of cassava grating and mash pressing machines e.g. production doubled in villages where mechanized grating had been adopted (see also: www.globalcassavastrategy.net). Therefore, he concludes that the likely enhancement in cassava production will occur only through "integrated and complementary" improvements in both cultivation methods and processing techniques.

Processing methods

Processing cassava for industrial purposes implies the transformation of fresh roots in substantial amounts of fairly uniform processed products. In case of flour, chips and ethanol, drying the roots immediately after the harvest is the first step in processing. Cutting the roots in smaller pieces accelerates the drying process. However, cutting in small pieces and laying these out on a clean surface for sun drying takes labor, a vast drying floor, and abundance of sunshine. The three major processing strategies are: (a) processing fresh roots into flour, (b) processing fresh roots into (small and large) chips, and (c) processing fresh roots directly into starch. Fresh roots into flour: Presently it is common to process cassava flour in the following manner: Peel roots >> Wash roots >> Chip or grate >> Press mash (e.g. by screw or hydraulic press) >> Pulverize >> Sun dry in thin layer >> Mill finely >> Package Table 2 summarizes the equipment needed to mechanize this process, and the associated costs

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Table 2. Equipment for Processing Cassava Roots into Flour:

Capacity Mini chipper - manual - mechanized Mechanical grater Cassava press board type - metal cage - double screw Wooden drying racks Hammer mill Total 30-60 kg roots/hr 500-1000 kg/hr 300-500 kg mash/hr 50-100 kg/hr $ 230 $ 250-300 $ 30 250-400 kg flour/hr 5-8 hp engine $ 800 Costs (1998) $ 150 $ 700 Body $320 Engine $550 $ 50 Costs 2003

Body $ 750 $ 1,780-$ 2,750

Source: Phillips et al, 1999, and Onabolu and Bokanga, 1998.

It is generally accepted that about 4 MT of fresh roots will yield about 1 MT of flour (e.g. Kormawa, 2003) Fresh roots into chips: Cassava chipping is a useful process when considering drying fresh roots. It enables the roots to dry faster thereby preventing deterioration from taking place during the process. The roots once harvested are peeled and chipped (sliced) into smaller bits or fragments to allow for rapid sun-drying of chips (machine drying is not yet common practice; large suppliers may need them). The production flow chart below describes key processes: Peel roots >> Wash roots >> Chip or grate >> Press mash >> Sun dry chips or mash Cassava chips can also be processed into other products such as flour or starch. However, the use of fresh roots for starch production is believed to result in superior quality starch. The majority of the cassava chips in Nigeria do not yet undergo the process of chipping or grating, or that of pressing. In order to minimize the use of labor, roots are cut in half and left in the sun for up to two months. The results are large dried cassava chips that more resemble "chunks" than "chips". Because of the great variety in quantity and quality (moisture content) of cassava chips, conversion rates between fresh roots and chips vary. Most common are conversion rates of 2.5 MT fresh roots for 1 MT of chips (e.g. Phillips et al, 1999). But other sources indicate that as much 3.3 to 4.5 MT of fresh roots are required to produce one MT of dried cassava chip. The amount of roots yielded is dependent on the age at which roots are harvested, on the variety cultivated, and on the crop growth environment. Older roots after 12 months of growth have higher dry matter content and need just 3.3-3.8 MT of roots to produce one MT of chip. For the annual cycle of 12 months, it is commonly assumed 4 MT of fresh roots to one MT of chip after discounting for peel losses (Kormawa, 2003). In summary, the actual conversion rate of fresh roots into dry chips depends on the cassava variety, its maturity, and the period of the year in which it is harvested, i.e. rainy or dry season. Cassava chips can also be processed into other products such as flour or starch. However, using fresh roots for starch production results in superior quality starch. The conversion of (very

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dry) chips to flour is a mechanical process that does not significantly affect the amount of flour except for dust in the machine operation that may reduce the overall weight of the product by only a modest amount. Kormawa (2003) assumes that the weight reduction is less that 5%, as only fully dry chips (moisture content of less than 13%) can be milled into flour. The chipping and drying of fresh cassava roots is an essential processing task to be performed near the location of production. The roots are transformed into a less voluminous and lighter intermediate product that can be stored for several months. An efficient chip processing method improves the potential use of cassava for flour, animal feed and ethanol, thereby increasing the overall market demand for cassava. An effective chipping machine manually operated or driven by petrol, diesel, or electric motor has been designed by the IITA Post-Harvest Engineering Unit, and passed on to various manufacturers in different parts of Africa including Nigeria. This model of chipper is available in Nigeria from ARCEDEM, NOVATECH and Addis Engineering. In order to reduce moisture content (cassava roots contain 70% water), pressing of the fresh chips is recommended where there is insufficient solar radiation and heat to dry the chips. Pressing: Pressing the cassava pulp is a useful operation, because during a short time span the pressure reduces the high moisture content of the roots, and therefore reduces the time needed for (sun) drying. This is especially relevant for humid regions in Nigeria where sunshine is limited. Various kinds of presses are available, e.g. screw, hydraulic or a combination of both. Sun-drying Cassava Chips: The frequency of processing chips (and flour) decreases from 80% in the savannah zone where ample rainfall is limited and sunshine is abundant, to only 25% in the humid zone where sunshine is a limiting factor (Nweke, 1994). Thus sun-drying is an important proceeding technology. One way to improve the sun-drying strategy is to work in farmer groups, which as associations may develop facilities that have three principal components: the concrete floor, a chipping machine and a chip storage area. Each group (or individually) owned facility can be built with local resources. Farmers are particularly important in constructing the drying installation to ensure group cohesiveness. The needed items include: a chipping machine that may be petrol or diesel-engine powered, plastic covers, cart, shovels, a deep well, rakes and a weight scale. As a cooperative, farmers can work in groups, where each group is responsible for the overall processing of a batch of fresh cassava roots. At the facility, the cassava roots are weighed, peeled, washed and chipped with machines, which have a combined capacity of 3­5 MT per hour. After chipping, the cassava is spread out on the drying floor at a loading rate of about 5 kg/m2 of fresh chips. The cassava chips are turned over every hour or two by using a wooden rake, and this provides faster and more uniform drying. Farmers (or rural processors) begin processing a batch of fresh cassava early in the morning (5 a.m.) and the chips remain exposed to the sun during all of the first day and on the second day until evening (5:00 p.m.). The total drying time for dewatered cassava mash (granulated) will be much lower than chips. Sun-drying cassava is labor-intensive. On average, one man-day is required to handle each MT of cassava roots that is produced. About 4 MT of fresh cassava are required to produce one MT of dry granules or chips depending on the cassava variety, its maturity, and the period of the year in which it is harvested, i.e. rainy or dry season.

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A drying facility with a 1000m2 floor loaded at 5kg/m2 of chipped cassava can process 5 MT of cassava roots. Two days are needed to complete the drying of chips with a moisture content of 11-12% (wet basis). Under these conditions, the facility has the capacity to process three lots of roots per week for a total of 15 MT of cassava chips (sources: ARCEDEM, Ibadan; Kormawa, 2003) Cassava chips can be further compressed and reduced in volume by processing chips into pellets. Cassava pellets are the common form of cassava product that is traded internationally. By transforming chips into pellets, volume and weight can be reduced by 25-30%. (See Grace, 1977) Fresh roots into starch: This is basically a five-step process that can be summarized as follows: Peeling and washing>>Extraction>>Purification>>Removal of water>>Finishing Sometimes the operations of peeling, washing and extraction are viewed as a "preparation" step (e.g. Grace, 1977). During the extraction phase the roots are rasped, and the resulting pulp is strained with additional water. During the purification phase the water surrounding the starch granules is replaced by pure water and the starch sedimentation is "washed" and screened. Screening is the separation of the free starch milk from the fibrous portion of the pulp. The removal of water is usually done by centrifuging and drying. The finishing phase consists of grinding, bolting (pulverization), sifting (to assure uniform quality), and bagging. The whole process requires substantial amounts of water, an important factor when selecting a location for a plant. About 5 MT of fresh tubers produces 1 MT of starch (Grace, 1977; Phillips et al, 1999; Oyewole, 2002). Kormawa (2003) gives a detailed example of how high yielding starch varieties can result in a significantly higher conversion: "Fresh cassava roots contain 23-27% starch on wet basis for the selected four improved varieties. On a dry weight basis, where 1000 kg of fresh roots give 300 kg of chips, the dry chips would contain about 76-90% starch or an average of 85%. This will imply a content of 74% starch if the chip has 13% moisture. Consequently, one MT of chips with 13% moisture will contain 740 kg of starch." Therefore, in case of high starch varieties, a conversion rate of nearly 4MT fresh roots for 1 MT starch is a realistic possibility. A starch plant is a major investment for Nigeria since a medium sized starch plant with an annual capacity of about 40,000 MT per year may cost about US$ 5 million when procured in Europe and 25% less when sourced from Brazil. A recently contracted starch factory in Ondo State was procured in South Korea.

Processing costs and profitability

Table 3 provides some cost estimates for alternative processing methods at the farm level. The table indicates that for farms with high cassava production it is more economical to buy and operate their own processing equipment. Key assumption is an actual volume of fresh roots per day processed as this assumption determines the amount of depreciation cost per MT of fresh roots.

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Table 3. Cost (in Naira) of processing one MT of fresh root to chips at farm level

Manual Processing (Chipping) Unit Cost Value 4 200 800 23 3 690 4 200 800 1 200 200 2490 2490 Processing Center Own Machine (Grating & Pressing) (4 MT cassava/day) Unit Cost Value Unit Cost Value 4 200 800 12 200 2400 1 500 500 23 30 2700 23 20 460 2 200 400 2 1 200 200 1 200 200 4 33 132 8 25 200 4,560 3,432 4560 858

Items Peeling and washing Machine operator Chipping Grating Pressing Drying Bagging Depreciation Fuel Total cost Cost / MT of roots

30 basins = 1.2 MT pick-up at 30% chip = 23 basin of chips. Source: Kormawa, 2003

Similarly, the cost of small-mechanized milling can be estimated. Here the key issue is also the actual volume of processed cassava per year. Hammer mills that have the capacity to mill 0.75­ 1.5 MT per hour can be obtained from local manufacturers in Ibadan, Lagos, Enugu and Aba. In addition, the Agro-Industrial Development Unit (AIDU) of the Federal Ministry of Agriculture, Abuja, can assist with machine identification and the training of operators. Other sources of information include The Project Development Agency (PRODA) in Enugu, and the Federal Institute of Industrial Research Oshodi (FIIRO) in Lagos. The cost of a million machine is estimated at N150, 000 - 200,000 (ARCEDEM, Ibadan, March 2003)

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Table 4. Milling Machine costs estimate from ARCEDEM

US$ 1 No dry milling machine with cyclone. Cap 3 T/ dry (milled) 1 No dry milling machine with disc cap. 1.5 t/day (milled) 1 No 8 HP diesel engine, water cooled, with belts, accessories treating frame, to match 3 and 4 above Shed + washing pit for cassava 2400 x 1400 x 1300 foundation of machines, floor, outside drying area 10,000 x 10,000 m2 Transportation Installation + 2 days Training 1044 800 600 5,000 1,111 1,111 9,666 N 141,000 108,000 81,000 675,000 150,000 150,000 1,305,000

Total cost

Source: ARCEDEM, Ibadan. Cost effective March 2003

Location of processing plants

Cassava is both perishable and bulky. To avoid losses from root deterioration and to minimize transport costs, cassava processing should occur close to the production areas. Fresh roots should be processed on the day they arrive at the processing site. In Thailand the processing strategy is based on linking small-scale producers with small to medium-scale processors. Oyebanji et al. (2003) also warn against large processing plants because "medium to large processing outfits may be forced to operate seasonally and at low capacities". The factors determining location of processing plants are the following: · year-round availability of sufficient roots of the desired quality; · presence of abundant water of good quality (for starch production); · availability of abundant sunshine (for chip production); · reliable power supply; · transportation facilities for raw material (roots) and end products; · availability of capital and labor; · socially and politically enabling environment. Table 5 provides an analysis by Kormawa (2003) of cassava supply in Nigeria. During our survey, the informants confirmed the relative importance of the surplus states as shown in the Table 5. On the other hand, southern states such as Ondo, Ogun and Oyo have an abundant supply of water and are therefore attractive locations for starch processing plants.

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Table 5. Area and output of cassava roots by state in Nigeria, 2000-2001

State/ADP Annual ha planted (x1000) Annual MT produced (x1000) 2 3551 2605 2085 2052 1958 1835 1735 1267 1178 1019 915 893 811 651 627 545 535 459 435 425 345 300 265 248 111 Mean yield (MT/ha) 3 13.6 14.2 11.2 13.1 11 8.9 10.4 17.3 15.6 8.4 13.9 7.6 11.6 15.8 11.8 12.1 7.3 15.3 15 14.2 12.8 12 16.9 9.9 9.3 Indicative prices of fresh fruits (Naira / MT) 1998 4 3379 4360 6340 7800 6600 15800 3500 5890 2430 5100 6070 4350 3500 24250 3810 14880 30000 1070 10920 5650 8720 13910 1999 5 2987 7410 5980 8820 9230 11600 3120 3075 4910 4560 4300 5179 2000 4800 10390 70000 3350 2340 2320 5870 15230 Surplus cassava rating

Benue Kogi Enugu Imo Cross River Kaduna Rivers Ondo Ogun Oyo Osun Akwa-Ibom Delta Ekiti Anambra Edo Niger Bayelsa Ebonyi Kwara Plateau Lagos Abia Nasarawa Taraba

1 261.1 184 186.5 156.5 177.5 206 167.5 73.2 75.7 121 66 117.8 70 41.2 53 45 73.5 30 29 30 26.9 25.1 15.7 25 12

6 High High Low Medium Low Low Low High High High High Medium Low Medium Low Low Low Low Medium Medium Medium Low Medium Medium Low

Column 3 = column 2 / column 1. Sources: OGADEP data 2001; and PCU 2002.

Moreover, an additional price comparison for the year 2000 confirms that the central states of Nigeria (Benue and Kogi) are important surplus areas for cassava (see Table 6). Because of the large number of sunny days, these are the logical locations for investments in chipping processing facilities.

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Table 6. Average annual prices during 2000 for gari and maize in three states (Naira/kg)

State Ogun Benue Kogi Source: PCU, MOA Gari 19.46 10.79 9.15 Maize 20.74 14.76 12.93

Transportation Costs

The long distance transportation costs for chips from Benue to Kano, Jos or Lagos are estimated to be about Naira 5 per MT per km. As the distance from Makurdi to Lagos is 885 km, the transport cost from Makurdi to the Nigerian port can be assumed to be Naira 4,425 per MT chips. For local collection from farm gate to local collection or processing site (e.g. within a 40 km radius), Kormawa (2003) estimates the transport costs to be close to Naira 400 per MT chips. Given these two estimates, one can derive that the cost of transport from farm gates in Benue State to the main Nigerian harbor will be close to Naira 5,000 per MT chips.

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Market prices of cassava intermediate and final industrial products and those of competing products

One of the best ways to determine market potential for various products is through a comparative price analysis. During our survey, we collected prices of cassava products as well as those of competing products. On the domestic market, industrial cassava products compete with traditional cassava products, mainly gari. Furthermore, each of the products (cassava flour, chips for animal feed, chips for food grade ethanol, and cassava starch) face competition from (a) identical imported products, and (b) substitute products that are either being imported or locally grown. For cassava flour the main competitive product is wheat flour, for cassava chips/pellets it is feed grains, for ethanol it is ethanol from other sources, and for starch it is corn/ maize starch. Below the Nigerian domestic prices for these products are summarized, first the domestic prices and then the world market prices. The prices reported are partly derived from literature sources and partly collected during our survey.

Domestic prices

Roots

Tables 7 and 8 provide an overview of fresh roots and gari prices in South West Nigeria. This is a high cassava-producing region that is located close to the main export harbor and to two main centers for domestic demand (Lagos and Ibadan). The average fresh roots price during 2000 in Ogun State was Naira 3.25/kg while gari sold at Naira 19.46 per kilo. During 2002-2003 in neighboring Oyo State, the average fresh root price was Naira 5.64 while gari sold at Naira 25.86 per kg. Both Tables also illustrate that (a) cassava prices fluctuate greatly, (b) average gari prices is up to 5 times higher than the average price of fresh roots, and (c) average gari prices and average maize prices tend to be similar. Table 7. Ogun monthly prices during 2000 (Naira/kg)

Month January February March April May June August September October November December Average Source: PCU, MOA Roots 3.88 3.6 3.76 1.9 2.12 2.66 2.59 2.6 3.53 4.53 4.57 3.25 Gari 12.68 13.05 14.47 15.16 16.84 19.12 21.96 27.4 22.08 25.56 25.81 19.46 Maize 18.81 19.46 22 23.01 21.54 23.73 19.78 20.34 20.04 19.63 19.82 20.74 Roots/Gari 0.31 0.28 0.26 0.13 0.13 0.14 0.12 0.10 0.16 0.18 0.18 0.19 Maize/Gari 1.48 1.49 1.52 1.52 1.28 1.24 0.9 0.74 0.91 0.77 0.77 1.07

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Table 8. Oyo monthly prices during 2002-2003 (Naira/kg)

May-02 June July August September October November December Jan-03 February March April May June July August Average Roots 5.7 9.31 9.65 7.93 7.33 6.78 6.54 5 4.71 5.39 5.46 4.79 4.08 2.75 2.59 2.29 5.64 Gari 44.75 44.16 35.54 28.99 24.36 24.05 22.72 22.2 20.13 20.56 20.17 19.41 17.03 17.22 22.1 30.43 25.86 Maize 35.17 40.82 36.06 29.97 30.18 28.83 28.68 29 19.92 18.93 20.13 18.17 18.64 19.25 22.99 27.78 26.53 Roots/Gari 0.13 0.21 0.27 0.27 0.3 0.28 0.29 0.23 0.23 0.26 0.27 0.25 0.24 0.16 0.12 0.09 0.22 Maize/Gari 0.79 0.92 1.01 1.03 1.24 1.2 1.26 1.32 0.99 0.92 1 0.94 1.09 1.12 1.04 0.91 1.03

Source: RUSEP (average of four markets)

For example, Table 7 and 8 show that within a one year period gari and root prices may nearly triple from their lowest price to their highest. Such fluctuations were confirmed during our survey as sources indicated that during the last year the Ibadan based starch plant had bought tubers for prices as high as Naira 10/kg and as low as Naira 4/kg (at the plant gate).

Chips

Table 9 illustrates how chip prices can be derived from fresh root prices. In our survey we found that chip prices amounted to about 4 - 4.5 times the average price of fresh roots, i.e. somewhat cheaper than the price of gari. This is understandable as the processing from fresh roots into gari is more labor demanding than the processing from roots into chips. The demand for chips by the livestock industry depends partly on the relative price of chips vis-à-vis the price of maize, and partly on the price of soybean meal as soybean meal needs to be added to the chips in order to compensate for the lack of protein content in cassava (as compared with maize). Various sources in the livestock feed industry reported that their general experience was that chips become economically attractive as substitute for maize when the price of chips is about half of the price of maize. Tables 6 and 7 illustrates that such price differential presently does not exist in S.W. Nigeria. However, Table 6 (above) shows that in Kogi state and Benue state the maize/processed cassava price differential is more attractive for cassava producers. Indeed, in this area cassava chips are periodically competitive with maize.

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During the survey maize prices were quoted at Naira 20,000 ­ 25,000 per MT. Assuming a price of Naira 25,000 for maize, livestock feed enterprises would be willing to offer Naira 12,500 per MT chips. Assuming 3 kg fresh roots per kg of chips, this would imply a price of Naira 4 per kg fresh roots. Such low roots prices are not common in the southern part of Nigeria, but are common in the central belt (Kogi, Benue and Nassarawa). However, these states are farther removed and transport costs have to be considered in comparative market analysis. Table 9. Calculated chip prices by processing method (Kormawa, 2003)

Root Price (N/MT) Manual 4210 5035 5520 26,800 30,100 32,040 Chip prices by processing method (1 MT of dried chip) Grate and Press 22,450 23,275 40,320 Own plant 20,272 23,572 25,512

Flour

By 1997 the price of premium quality cassava flour was Naira 30/kg (US $1.37/kg) for a production cost of 20-30 Naira/kg depending on fluctuations in the price of cassava roots. During our survey we bought cassava flour in Makurdi for Naira 20/kg. Allowing for transport cost of Naira 5/kg, this would imply a Lagos price of Naira 25/kg. During our survey we could determine that wheat flour sold at Naira at Naira 50,000/MT (Naira 50/kg). This confirms and earlier reported finding that "good quality cassava meal in Ibadan sells for half the price of wheat flour" (source: www.globalcassavastrategy.net). Maize flour prices in Lagos were reported to be Naira 30,000/MT.

Starch

Cassava starch prices are determined by the prices for maize starch and are generally expected to be slightly below the maize (corn) starch prices. During the time of our survey, corn starch prices were consistently reported to be in the range of Naira 50,000 - 65,000/ MT with most informers indicating a price level of Naira 58,000 60,000 per MT. Typically cassava starch has being offered at Naira 50,000 - 55,000/MT starch. During our survey we visited five starch plants. Two of these five plants were in operation. One reported a cost of production at Niara 55,000/MT starch and was (reportedly) just at a break-even point. The other plant indicated that the full cost price for cassava starch was Naira 80,000/MT starch, and therefore it was selling below production cost. A third plant was temporary out of production. The latter facility is only operational when the starch price reaches Naira 70,000 (presumably their cost of production). A fourth starch factory expects to open next year and aims at a selling price of Naira 55,000. The fifth plant (Tygon Chemicals) had completely folded it operations and will not reopen. Traditionally made starch varies in quality. In Bendel state, village producers sell their starch for Naira 30-35 per kg. A dextrin plant in Benin City uses this locally produced starch as raw material. This plant sells the dextrin for Naira 150-160 per kg.

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Ethanol

Ethanol is sold in drums of 200 liters. Prices range from Naira 17,000- 19,500 per drum. The average price for ethanol is Naira 87 per liter. Crude alcohol prices range from Naira 60 ­ 65 per liter.

Seasonality

As illustrated in Tables 7 and 8 agricultural prices fluctuate from one month to another as demand and supply for various commodities (cassava products as well as competing products) fluctuate. Cassava products also face a two-year price fluctuation, as farmers tend to respond to high prices by increasing the area for the cassava cultivation. They respond reversibly (deceasing the area under cassava cultivation) when cassava prices are low. Within Nigeria the term of cassava "glut" is used. Observers feel that a cassava glut occurs when the quantity on the market is so large (and the associated prices of fresh roots are so low) that farmers do not even bother to harvest the roots they have on the field.

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World market: competition from other cassava producers and substitute produts

Thailand is the largest exporter of industrial cassava products. Therefore, Thai farmers largely determine the prices of industrial cassava products on the world market. Thailand started exporting cassava pellets to the European feed industry during the seventies and the eighties. When this export market declined during the nineties, Thailand diversified its products into cassava starch and chips. In order to assess the export potential for Nigerian cassava, one needs to determine how competitive Nigerian chips and Nigerian cassava starch are vis-à-vis Thai cassava products. Table 10 shows the average world market prices of cassava products (pellets and starch) and the world market prices of the main competing products (corn and wheat). One will note that during the last four years cassava pellet prices are hover around 64% of the world maize prices, while cassava (tapioca) starch prices tend to be 83% above the average world market prices for maize (corn). Table 10. World market prices for cassava product, maize and wheat

Year 2000 2001 2002 2003* Average Maize (1) 88.33 89.57 99.19 104.31 95.35 Price (US$/MT) Cassava Wheat Pellets (2) 117.57 119.45 132.3 148.61 129.48 (3) 55.04 59.01 66.03 65.38 61.37 Tapioca Starch (4) 157.42 173.83 184.63 181.63 174.38 w/ma ratio 1.33 1.33 1.33 1.42 1.36 c/ma ratio 0.62 0.66 0.67 0.63 0.64 ts/ma ratio 1.78 1.94 1.86 1.74 1.83

U.S. Maize no 2 Yellow f.o.b U.S. Gulf ports Wheat, Argentina, f.o.b Up River Tapioca pellets, f.o.b Bangkok Tapioca Starch, f.o.b Bangkok * January-August

World market prices for industrial cassava products decreased dramatically over the last ten years as the Thai cassava industry had to cope with the loss of the European market. The decrease in world market prices is illustrated in Figure 2. Figure 2 shows the export price development of hard cassava pellet based on data from Bangkok. The price of cassava pellet f.o.b Bangkok fell by about 49% between 1990 and 1999 from US$141 to US$72 per MT. The slump in price has remained dramatic during the last decade. In 2000, cassava pellet prices declined to as low as US$52 and raising slightly to about US$62 per MT in 2003. Thus from 1990 to 2003, prices have fallen from a high of US$141 to US$62 per MT, equivalent to an annual price decline of approximatelyUS$8 over the past 14 years.

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160 140 120 100 80 60 40 20 0

90 91 92 93 94 95 96 97 98 99 00 01 02 19 19 19 19 20 20 20 19 19 19 19 19 19 20 03

US$/M.T.

Source: The Tapioca Trade Association (ITTA)

Figure 2: Cassava Hard pellet (F.O.B. Bangkok, Thailand (Annual averages) One would expect that the decline in prices would also have provided the incentive to Thai cassava farmers to decrease their production and to diversify into other agricultural commodities. However, such decline in production did not happen. As a result, on the world market the Thai cassava industry is now more competitive than ever before.

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Market Potential

Domestic market

Present condition

According to the website www.globalcassavastrategy.net the industrial demand is less than 5% of total cassava production. During the survey, we found no indication that this very low estimation is incorrect. This is mainly due to the fact that chips are not used in the animal feed industry. In addition, the use of cassava flour for the confectionary industry is very small if not negligible. Moreover, only five cassava starch factories were identified during the survey and only two of them where in operation, but only recently.

Chips/pellets

During the eighties, an increasing quantity of cassava was incorporated into feed and feedstuff for livestock and fish. For a number of years, the FAO has estimated that 10% of cassava production was used for animal feed. This may be true in the traditional market where cassava waste is fed to pigs and goats. However, the industrial use of cassava in feedstuff has declined. In Nigeria, the use of cassava chips processed into animal feed was still common through the early nineties and some animal feed millers continued the practice until the late nineties when the price of cassava became too expensive vis-à-vis the price of maize. Presently no major livestock feed mill is using cassava as a raw material. Smaller mills and large farms that blend their own feed may use cassava chips\meal during periods where these are locally available at low prices. Current estimates put the industrial use for such materials in Nigeria at 5 percent (e.g. Tewe, 2002). During our survey, we learned about the following negative aspects of the use of cassava chips in animal feed: · Unreliable supply; · Fluctuations in quality; · Uncompetitive price.

Flour

In general, cassava flour is not well regarded in the food industry. It is therefore not surprising that during the survey we did not find any indication of the present use of cassava flour by bakeries. In addition, the larger food processing industries do not yet utilize cassava flour in any significant quantities. Some bakeries, however, have had experience with the use of cassava flour from the period when wheat imports were banned. As the locally produced wheat was not sufficient, bakeries experimented with cassava meal substitution. During our survey we encountered some reservations against the use of cassava flour. Complaints included the following: · Impurities such as sand; · Odor; · (Unfounded) concerns regarding the possible presence of cyanogenic glucosides; · Shortening of shelf life of the product (e.g. biscuit); · Gradual change of color (biscuits turning pale); · Fluctuating prices; 27

Unreliable supply. Additionally, the field survey confirmed the problem of brittleness.

·

Starch

The starch industry is presently in a transformation phase. Historically the cassava starch factories have sold most of their products to the textile industry where it is preferred over other starches such as corn (maize) starch. However, lately the Nigerian textile industry is under severe pressure from cheap textile imports from Asian countries such as India and China. Although these imports are banned, it is estimated that 70% of textiles sold are foreign made. The challenge for the starch industry is to start producing for the food industry where the demand is high, but where the quality standards are higher than for the use of starch in the textile industry. In response to demand for high-quality starch, new plants were open in Ibadan and Akure recently. Moreover, next year the starch mill owned and operated by the Nigerian Starch Mill Ltd. (NSM) will reopen in Ihiala, Anambra state. A promising new market for Nigerian cassava is the production of dextrin. Presently in Nigeria a small amount of dextrin is produced domestically. The profit margin is reported to be high (Ehigiamusoe, 2003), and there is interest by investors to enter this market as well. During our survey, we visited one dextrin plant in Bendel state. The plant acquires starch from the surrounding villages and processes it into dextrin. Since the domestic demand for dextrin is strong and increasing, the dextrin plant is considering expansion. Ferris et al (2002) also reported that Ugandan textile factories use a substantial amount of cassava flour as an inexpensive substitute for cassava starch. The survey indicated that in Nigeria this was not the case. The main concerns among starch producers in Nigeria are: · year round availability of low cost fresh roots; · sufficient water supply; · reliable energy source; · reasonable infrastructure (mainly roads).

Ethanol

During the period 1995 ­ 2000 the Nigerian enterprise NIYAMCO was able to produce ethanol from cassava achieving a yield of 380-410 liters of ethanol per one MT of cassava starch. However, the planted folded its operation because of mismanagement and lack of financial support (Bamikole, 2003). Presently no food grade ethanol is produced in Nigeria. All ethanol is imported. During 2001, these imports amounted to 20,900 MT (FOS, 2002). Moreover, while surveying we learned that an annual consumption is about 25,000 MT. Other estimates for the food grade ethanol market are substantially higher. For example, Nweke et al (2002), Makinde et al (2002) and Bamikole (2003) all report a national annual ethanol consumption of 88 million liters (88,000 MT). The difference between the two estimates may be explained by the substantial amount of liquor produced by a large number of small companies and by traditional processors. In the traditional market cassava is processed into local brews and spirits. As in the case of the other cassava sub-sectors, prospective ethanol producers are most concerned about the sourcing of raw material (chips).

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Potential

Table 11 below summarizes the estimated demand for the industrial use of cassava in Nigeria. This estimate tends to be lower than amounts earlier reported, and can be considered conservative estimates. This is our best estimate of domestic market potential that is immediately available ­ provided that the essential requirements for the cassava raw materials are met. These are: (a) good quality roots or chips that are void of foreign matter, (b) regular supply throughout the year, and (c) low prices throughout the year. Table 11. Potential domestic demand for industrial cassava in Nigeria

Sector Domestic Demand (MT/year) Substitution (%) 20 100 20 100 Equivalent in fresh cassava roots (MT) 1.0 million 0.35 million 1.0 million 2.0 million 4.5 million

Animal feed 1.2 million (cereals) Starch 67,100 (corn starch) Flour 1,18 million (wheat) Ethanol 20,900 (imports) Total Source: Survey results and literature Maize starch imports, FOS, 2001 Wheat and wheat flour imports, FOS 2001 Ethanol imports, FOS, 2001

Starch

Corn (or maize) starch has no preferable characteristics over cassava starch, and can therefore be easily replaced. Replacing imported starch with locally produced cassava starch will immediately increase the domestic demand by 350,000 MT fresh roots (5 MT fresh roots yields 1 MT starch). The potential of the starch sector would improve significantly by an accelerated introduction of high starch varieties. Table 12 provides a selection of immediately available varieties that are superior to the present common varieties. Most varieties presently being used by farmers contain only 20% of starch or even less.

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Table 12. Starch yields of high starch varieties of cassava (Kormawa, 2003)

Cassava Variety TMS 90257 TMS 84537 TMS 82/00058 TMS 82/00661 Average Root yield 43 35 35 39 % starch (t/ha) 23 27 26 26 Starch in root (t/ha) 9.89 9.45 9.1 10.14 9.42

The varieties in Table 12 are both high yielding and have higher starch content. Present yields from well-managed farms with high levels of input is about 25 t/ha. Higher input root yields range from 35 to 43 t/ha, while starch yields range from 9.10 to 10.14 t/ha with an average of 9.4 t/ha.

Cassava Flour

Earlier Abass et al (1997) provided practical guidelines for maximum level of substitution of wheat flour with cassava flour for Nigerian bakeries: Snack foods Biscuits Bread Noodles 12.5 ­ 100% depending on product and users 5-25% normal; 60% maximum depending on type of biscuit 20% maximum 10% maximum

All bakeries professed a willingness to explore substitution of wheat flour by cassava flour. However, they requested some guidance, specifically in regards to recipes that had been tried and proven satisfactory. Undoubtedly, there is a need for an information campaign that will provide the food industry with the technical information they need in order to use cassava flour, including information about the absence of cyanide in cassava flour. Based on the apparent willingness of food processors to substitute, and the large body of literature that provides examples of successful substitution, we estimate substitution rate of 20% of the wheat imports. However, this is a low estimate since locally produced wheat is not included in the assessment.

Cassava chips/flour for animal feed

More than 80% of the industrial animal feed industry caters to the poultry sector. According to a recent study by SOFRECO on behalf of the European Commission (see: www.agro-ind.com). The industrial poultry sector (i.e. large-scale intensive poultry farms) grew to 8.8 million laying hens and an annual volume of 18 million broilers in 2001. At that time, the same team estimated the share of imported chicken meat at 25% of the domestic demand. In the meantime, the import of chickens has been banned and we assume that the shortfall in supply had been filled by an increase in domestic production. We estimate that large-scale poultry production is therefore 10 million laying hens and an annual production of 22.5 million broilers (18 times 1.25). The feed requirement for a laying hen is 125 grams per day, while those for broilers are 5 kg per 2 kg of 30

poultry meat (live weight). Using these conversion rates it can be derived that the demand by Nigeria's large-scale industrial poultry sector was 450,000 MT (10 million times 0.125 kg times 360 days) for laying hens and 56,250 MT (22.5 million times 2.5 kg). Consequently, the demand for feedstuff by the large-scale poultry farmers was estimated to be slightly over 500,000 MT. We further estimated that the demand by medium and small-scale poultry farmers amounted to another 60% of the feed market. This estimation was based on information received during our survey of the industry, the historical figure of 40 million broilers slaughtered in 1982 (at the height of the poultry production in Nigeria). Consequently, we estimate the present demand for animal feed to be at least 1.2 million MT. Another way to arrive at this estimate is to use 2002 estimates for poultry meat and egg production as estimated by CBN (2003). The total production for these two items was (respectively 107,000 MT meat plus 514,000 MT eggs) 611,000 MT. Using the same conversion factor of 2.5, this would imply a demand of 1,527,500 MT feed. Therefore, our estimate of 1.2 million MT is reasonable. However, this is a conservative estimate in the light of Nigerian poultry statistics, which put the poultry population during 1998 at more than 100 million head and demonstrate a steady increase over the successive years. Our survey confirmed these findings as animal feed retailers confirmed the increase in demand for animal feed during the recent years.

Ethanol

Presently no food grade ethanol is produced in Nigeria but at least two distillery plants are planning to build one. One of these plants intends to use molasses as raw material, and the other plans to use cassava chips as raw material. The processing of cassava into ethanol is a relative new use of cassava. Most literature sources, including the recent ones, do not refer to this market opportunity. Nevertheless, the leadership of one of the largest distilleries in Nigeria is rather optimistic about the feasibility of building a cassava-based crude alcohol plant. This optimism is based on the rapid increase in demand for industrial (synthetic) ethanol on the world market. The demand is partly driven by the increased blending of ethanol in fuel. Blending ethanol into petrol fuels reduces the negative impact of carbon-based fuel use on the earth's ozone layer and is already mandatory in a number of countries such as India and Brazil. Economic analysis further indicated that the increase in demand for synthetic ethanol will also increase the price for food grade ethanol. Consequently, the long-term demand for food grade ethanol is considered to be strong and the distillery industry seems willing to invest in cassava processing equipment. As a first step, one of the distilleries already established a plant that processes crude alcohol into ethanol.

Export Market

The international market for cassava began to develop in the 1950s, with the exportation of the by-products of the cassava flour milling industry from Thailand to the European Community market. Half a century later, the European Union continues to be the main destination and Thailand the main source of cassava trade. While new cassava markets have developed, especially in Asia, it has been difficult for most of the other major cassava producing countries to increase their share of the international market. Thailand continues to be the principal cassava supplier, with over 80 percent of the world market. This indicates that despite the current efforts to increase cassava production and trade in Nigeria, the prospects for export of cassava

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chips/pellets to the EU will be limited as long as Asian countries, specifically Thailand, continue to dominate on the European market. Figure 3 shows the major difference between domestic prices for cassava starch and cassava chips, and the world market prices. The difference is substantial; therefore, it is unlikely that Nigerian farmers can currently compete on the world market. Hence, in the short-term the outlook for export of industrial cassava products is bleak. 450 400 350 300 US$/MT 250 200 150 100 50 0 cassava tapioca/cassava chips/pellets starch Domestic Maize World

Figure 3. Comparison of domestic and world market prices for cassava chips, cassava starch and maize

Table 13 offers another illustration of the lack of competitive advantage of Nigerian starch on the world market. Nigerian prices are converted into US $ at an exchange rate of Naira 135 per US dollar. Starch prices are estimated at Naira 55,000 per MT. Factory cost prices ranged from Naira 55,000 to Naira 80,000 per MT starch. Fresh root cost prices were assumed to be Naira 8,100 per MT at the factory gate. Table 13. Comparison of economic parameters in the world cassava starch industry

Parameter Conversion roots into starch Roots price factory gate ($/MT) Starch factory cost price ($ MT) Starch price factory gate ($/MT) *Guy Henry and Andrew Westby, 2000 Nigeria ** 20% 60 370-590 407 Thailand* 25% 40 210-220 225-250 China* 25% 37-41 225-250 325 Brazil* 25% 45-55 350 400

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**Survey results

Table 13 demonstrates the need for the rapid introduction of high yielding cassava starch varieties. A comparison of the prices for fresh roots among the four countries also illustrates the need to improve the productivity of cassava cultivation as it is the only way to reduce the root prices, while still providing an income to cassava farmers.

33

Conclusion and Discussion

The potential of the cassava industry should be analyzed comprehensively. Two principle forces dictate the development of the vibrant cassava industry: (a) input markets, and (b) output markets. In the input markets, the various uses of cassava compete with each other. These are the traditional food market, the chip market, the starch market and the ethanol market. On the output side, cassava products compete with other commodities, where maize is a dominant competitor in both the animal feed and the starch market. Nigerian cassava offers some special advantages. First, the physical environment is very conducive for cassava cultivation, and cassava can be harvested throughout the year. Farmers are very familiar with the commodity and know how to grow it. Nigeria further has the benefit of the availability of well-tested, new and high yielding cassava varieties developed by IITA and NRCRI. The long-term challenge to Nigerian cassava farmers is to produce cassava products at prices and quality standards that are competitive with the world market (Nwosu et al, 2003). During the survey, numerous stakeholders in the cassava industry were consulted. Their comments can be summarized as follows and resemble the more extensive list that was generated during the International Workshop on Cassava Competitiveness in Nigeria. This workshop was held at IITA and financed under the USAID funded RUSEP project (RUSEP, 2002): Technical constraint and opportunities: Constraints: cost for new equipment and its maintenance; availability of raw materials. Opportunities: recent investments in processing (starch); availability of improved varieties. Institutional constraint and opportunities: Constraints: infra structure (roads, communication; energy). Opportunities: presence of IITA, NRCRI. Socio-economic constraints and opportunities: Constraints: negative attitude towards cassava; 2 year fluctuation in prices because of smallholders reaction to periodic low and high prices. Opportunities: familiarity with cassava growing. Policy Constraints and opportunities: Constraints: erratic policy changes; weak enforcement of policies. Opportunities: present government attention on cassava cultivation; protective duties on competing imports.

Focus on Domestic Market

A comparison between the prices of Nigerian and Thai cassava products clearly indicates that ­ in the short run -- Nigerian industrial cassava products cannot compete on the world market. However, Nigeria has a large domestic market. The domestic demand for animal feed, starch, crude alcohol and confectionary products are all increasing. By following a policy of import substitution, the Nigerian government can further stimulate the demand for home-grown cassava, while at the same time save foreign exchange. 34

The long-term policy however should focus on two developments that need to occur simultaneously. The cultivation of the cassava roots need to become more efficient. Roots yields should increase and high starch varieties made available. At the same time, processing should move from small scale to medium and large scale depending on the type of processing. The food industry as well as the animal feed industry repeatedly commented on the lack of predictable supply and quality of cassava chips and or flour. The mid belt of Nigeria (Kogi, Benue and Nassarawa States) offer opportunities for medium sized processing plants that will convert fresh roots into chips and/or flour. The humid zone of Nigeria has ample water available at is the preferred location for starch processing plants. Ethanol plants are feasible in either region. A key issue is the availability of raw material at low prices: hence the need for more efficient cultivation technologies. IITA research has amply demonstrated that the productivity of cassava cultivation can increase by more than 45% (Manyong et al, 2000). At the same time improved processing technologies are available and the private sector has demonstrated its willingness to make substantial investments in the application of these technologies. The introduction of new processing technologies and more productive cultivation methods needs to be synchronized and there is an urgent need for a collaborative approach involving farmers, processors, developing community and policymakers. Development agencies should focus efforts at those locations and in those communities where the private sector is prepared to make significant investments. Below a conceptual framework for a collaborative public-private sector initiative is presented.

Impact of domestic focus on employment

Table 11 (above) summarized the estimated demand for the industrial use of cassava in Nigeria, provided that the essential requirements for the cassava raw materials are met (good quality roots or chips that are void of impurities, regular supply throughout the year, and low prices throughout the year). Table 14 (below) shows the impact of increased cassava production on labor use in Nigeria. Using medium to high input cultivation methods, the labor requirements for cassava will decrease from 15 person days (pd) per MT fresh roots cassava to 9 pd per MT fresh roots. Similarly, processing of cassava will decrease from 13 pd per MT (traditional/manual processing) to 5 pd per MT when done mechanically. Lastly, increased cassava production and introduction of new production technologies will have a positive employment multiplier as employment in both the agricultural supply industry and the secondary processing industry will increase. Economic multipliers for the agricultural sector have been estimated to be between 2 and 2.5. Here a conservative estimate of 2.0 is used.

35

Table 14: Impact of increased cassava production and processing per MT fresh roots Increase of labor Activity Assumption (Person Days) (1) Production 9 medium/high inputs; high yielding varieties (2) Processing 5 small/medium scale mechanized processing (3) Multiplier impact 14 100% of labor in production and processing Total 28 (1) Adapted from, Nweke et al, 2002, Table 7.2; also Knipscheer, 1982, Table 1 (2) Yield 30MT/ha; labor 270 days/ha (3) 100 days per 20 MT fresh roots

Combining the two analyses summarized in Tables 11 and 14, one can make a reasonable estimate that a cassava enhancement program in Nigeria that focuses on the promotion of industrial cassava will increase employment by (4.5 million * 28 =) 126 million days. Assuming a working year of 260 days/year, the program would lead to an rapid generation of at least new 480,000 jobs. In summary, a well designed industrial cassava promotion project in Nigeria will lead to about half a million new jobs.

Partnerships with the private sector

Scott et al (2002), Nweke et al (2002), and various RUSEP publications (e.g. Kormawa, Kolawole et a. (2002) and Kormawa, Ezedinma et al (2002)) illustrate the need for market appraisals and identification of linkages between producers, processors and policymakers. This is the only strategy that can capitalize on cassava's potential for expanded use in processed form. Such market-driven initiatives are bolstered by the availability of improved germplasm, and improved processing technologies. During discussions with IITA staff and private entrepreneurs some favorable feedback was gained about a type of public-private sector partnerships one may call the nucleus farm & cluster model. The general notion is that various actors in the partnership remain operating in their own expertise. For example, processing industries have tried to operate large-scale farms, but were not successful due to lack of expertise. On the other hand, full reliance on contract farming arrangements has also proven to be unsatisfactory.

Nucleus Farm and Cluster Partnership Model

Role/contribution of the processing industries (e.g. cassava): · Invest into processing plant; · Manage a large farm (directly or by contract) to safeguard against supply fluctuations (buffer stock); · Dedicate part of the farm to the multiplication of high yielding planting/seeding material (One hectare of planting materials will yield 3,000 bundles of cassava stems; at current selling price of N80/bundle, the returns to the multiplication farmers will be N173,750/hectare (Kormawa, 2003)); · Develop network of contractual arrangements with medium sized farms and producer associations ("outgrowers") in the cluster surrounding the nucleus farm;

36

· ·

Employ technical assistants which will guide the multiplication of the plant material and also train the outgrowers; Pay premium for high quality supplies (e.g. high starch cassava roots).

Role/contribution of IITA, or other development agencies: · Convene regional stakeholders; · Broker partnership with additional partners (e.g. ADP); · Provide high yielding, high starch, disease resistant varieties; · Provide technical assistance and training material to nucleus farm and technical assistant; · Facilitate accesses to other inputs such as fertilizers and credit; · Assist in conflict resolution. Such partnerships can improve yield from an average of 20 MT/ha to 38 MT per ha while at the same time increasing the percentage of starch per MT of fresh roots. Under the USAID funded RUSEP Project, IITA has proven it can foster these type of relationships.

37

References

Abass, A.B., A.O. Onabalu and M. Bokanga (1997) Introduction of high quality cassava technology in Nigeria. Paper presented at the ISTRC meeting in Trinidad. Bamikole, T. Olaoluwa (2003). Small-scale ethanol production from cassava in Nigeria. Paper presented at the workshop on cassava processing/post harvest and marketing, Port-Harcourt, June 23-25 Camara, Y., J.M. Staatz and E. Crawford (2001). Comparing the profitability of cassava-based production systems in three West African countries: Cote d'Ivoire, Ghana and Nigeria. Staff Paper No 2001-03, Department of Agricultural Economics, Michigan State University, East Lansing, MI 48824, USA. CBN (2003). Annual Report & Statement of Accounts for the Year Ended 31st December 2002. Central Bank of Nigeria. Lagos. Cock, J.H. (1985) Cassava ­ New potential for a neglected crop. In: IADS/Winrock International Development Series (S. Breth, Ed.) Westview Press Ehigiamusoe, R.E. (2003). Production of cassava based adhesives and their potential markets ­ a Nigerian perspective. Paper presented at the workshop on cassava processing/post harvest and marketing, Port-Harcourt, June 23-25 Ezedinma C.I., P. Kormawa, A. Adekunle, K. Makinde and R. Okechukwu (2002) Linking Producers to the Market: the RUSEP Approach. Paper presented at the International Workshop on Cassava Competitiveness in Nigeria, November18-22, 2002, IITA, Ibadan FAO (2002), FAOSTAT Database Collections Ferris, R.S.B., A. Muganga, R. Matovu, S. Kolijn, V. Hagenimana, and E. Karuri, (2002) Marketing Opportunities for Starch and High Quality Flour Production from Cassava and Sweetpotato in Uganda, Resource and Crop Management Research Monograph, No 20, IITA, Nigeria FOS (2001). Nigeria Foreign Trade Summery, January- December 2001. Federal Office of Statistics, Abuja, Nigeria. Fresco, L.O. (1993) The dynamics of cassava in Africa, COSCA Working Paper No 9. Collaborative Study of Cassava in Africa, IITA, Nigeria Gensi, R.M., M. Bokanga, N.Nayiga and R.S.B. Ferris (2001). Investigating the potential for vertical integration of primary cassava flour producers with secondary confectionary processors in Uganda. In: Root Crops in the twenty-first century by M.O. Akoroda and J.M. Ngeve

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(Editors). Proceedings of the seventh conference of the International Society for Root and Tuber Crops ­ Africa Branch at Cotonou, Benin, 1998. Grace. M.R. (1977). Cassava Processing. FAO Plant Production Series No 3. FAO, Rome. http:/ www.fao.org/inpho/vlibrary/x0032/X0032E00.htm Henry, G. and A. Westby (2000), Global cassava starch markets: current situation and outlook,. In: Cassava Potential in Asia in the 21st Century, Proceedings of the sixth regional workshop, Ho Chi Minh City, Vietnam, Feb 21-25 Editors: R.H. Howeler and S.L. Tan, organized by CIAT and the Institute of Agricultural Sciences of South Vietnam (IAS) Horton, D. (1988) Underground Crops: Long-term trends in production of roots and tubers. Winrock International, Morrilton, Arkansas, U.S.A. IFAD and FAO (2000) The world cassava economy, facts, trends and outlook, Rome Knipscheer, H. (1982). Rapid Labour Data Collection for Secondary crops: Cocoyam and Soybean Farming Systems in Nigeria. Public Administration and Development, Vol.2, 265-272. Kormawa, P.M. (2003). Annual sourcing of 21,000 tonnes of high quality cassava chips for a crude alcohol distillery plant in Sango-Otta, Ogun State, Monograph, IITA, Ibadan. Kormawa, P.M., K.B. Kolawole, I Azuogu, E.C. Okorji and C.I. Ezedinma (2002) Needs Assessment Study for Market-driven Technology Transfer and Commercialization in Abia State, Nigeria. RUSEP Monograph Series No 5, IITA, Nigeria Kormawa, P.M., C.I. Ezedinma, K. Makinde, A Adekunle, and J. Chianu, (2002), Needs Assessment Study for Market-driven Agricultural Technology Transfer and Commercialization in Nigeria, RUSEP Monograph Series No 5, IITA, Nigeria Lemchi, J.I. (1999). The Marketing System for Cassava in Nigeria. Ph.D. Thesis, Department of Agricultural Economics and Extension, Federal University of Technology, Owerri, Nigeria. Makinde, K.O. and Boma Anga (2002) The Nigeria Cassava Market: Facts, trends, outlook, and business opportunities for the use of cassava in Nigeria. Paper presented at the International Workshop on Cassava Competitiveness in Nigeria, November18-22, 2002, IITA, Ibadan Manyong V.M., A.G.O. Dixon, K.O. Makinde, M. Bokanga, and J, Whyte (2000) The contribution of IITA-improved cassava to food security in sub-Saharan Africa: an impact study, monograph, IITA, Nigeria Nweke F.I. (1994). Processing potential for cassava production growth in sub-Saharan Africa, COSCA Working Paper No 11, Collaborative Study of Cassava in Africa, IITA, Nigeria Nweke, F.I., D. Spencer and J. Lynam (2002), The Cassava Transformation, Michigan State University Press, East Lansing, MI 48823-5202

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Nwosu, K.I., and G.N. Asumugha (2003) Export Potentials for Nigerian Cassava and Cassava Products in the International Market. Paper presented at a workshop on Nigerian export promotion, Nigerian Export Promotion Council, Enugu Zone, Niger Heritage Hotel, Onitsha, Nigeria, September 11, 2003 Onabolu, A. (2001) Cassava processing, consumption and dietary cyanide exposure, Ph.D. Thesis, Division of International Health, Department of Public health Services, Karolinska Institutet, Stockholm, Sweden Onabolu, A. and M. Bokanga (1998). The promotion of cassava as a commodity for food industry: a case study in Nigeria. Paper presented at the CFC workshop on local processing and vertical diversification of cassava in Southern and Eastern Africa. Oyebanji, O.O., and H.K. Akwashiki (2003) Infrastructure development for enhanced cassava marketing. Paper presented at the workshop on cassava processing/post harvest and marketing, Port Harcourt, June 23-25 Oyewole, L.O. (2002), Contract farming for root production and supply. Paper presented at the International Workshop on Cassava Competitiveness in Nigeria, IITA Conference Center, Ibadan, November 18-20. Phillips, P.P., G. Henry, A. Graffham, O. Vilpoux, Boonjit Titapiwatanakun, and D.S. Taylor (1999) Global Cassava Market Study: Business Opportunities for the Use of Cassava. Assembled by dTp Studies Inc. and funded by IDRC, Ottawa, and IFAD, Rome Plucknett, D.L., P.P. Phillips and R.B. Kagbo (2000) A Global Development Strategy for Cassava: Transforming a Traditional Tropical Root Crop. IDRC, Ottawa, and IFAD, Rome RUSEP (2002), A Synthesis Report of the International Workshop on Cassava Competitiveness in Nigeria, IITA Conference Center, Ibadan, November 18-22, Monograph, IITA, Nigeria Scott, J. M. W. Rosegrant, and C. Ringley (2000), Roots and tubers for the twenty-first century: Trends, projections, and policy options. Food, Agriculture and Environment Discussion Paper No 31, IFPRI/CIP Tewe, O.O. (2002), Cassava for livestock feed in sub-Saharan Africa: strategies for industrialization. Paper presented at the International Workshop on Cassava Competitiveness in Nigeria, IITA Conference Center, Ibadan, November 18-20.

40

Appendix A

Summary Conversion rates (a) Fresh roots into dry tubers ("chips") For Nigeria there is no firm conversion rate. For example, Kormawa et al (2002) use a rate of 60% (1 MT of fresh roots gives 600 kg of dried roots/"chips"). Other sources use 40% (e.g. Phillips et al: 2.5 MT fresh roots yields 1 MT chips). The reason for the differences is the informal way that farmers (sun) dry their roots. This technology causes great variation is quality and quantity of dry (large) "chips". (See also (b) below). (b) Fresh roots into small dried chips In processing fresh cassava roots into chips, the fresh roots are peeled, cut into slices and sundried or put near a heat source to dry. Thus, depending on the moisture content of the chip, about 3.3 to 4.5 MT of fresh roots would be required to produce one MT of dried cassava chips. The amount of the roots needed depends greatly on the age at which the roots are harvested and will also vary based on the crop growth environment. Older roots after 12 months of growth have higher dry matter content and will need just about 3.3-3.8 MT of roots to produce one MT of chips. For the annual cycle of 12 months it is assumed 4 MT of fresh roots to one MT of chips after discounting for peeling losses (Kormawa, 2003). To summarize, about 4 MT of fresh cassava are required to produce one MT of dry granules or chips depending on the cassava variety, its maturity, and the period of the year in which it is harvested, rainy or dry season. (c) Fresh roots into Flour The conversion rate for flour is similar to the one for grated dry cassava (e.g. under (b) above). For example: "21,000 MT of high quality flour will require 84,000 MT of root of these four selected varieties" (Kormawa, 2003). (See also (e) below). (d) Small chips into (tapioca/cassava) pellets Grace, 1977: 1 MT of pellets out of 1.25-1.3 MT chips (e) Small chips into flour The conversion of chips to flour is a mechanical process that does not significantly affect the amount of flour except for some dust in the machine operations that may reduce the overall weight of product by a very small amount only, not greater than 5%. The quantity of flour is therefore for all practical purposes only approximately 295 kg of flour that can be obtained from 300 kg of chips with some 12-15 percent moisture that is obtained from one MT of roots. This is because only fully dry chips can be milled and there is very little moisture in the flour (Kormawa, 2003). (f) Fresh roots into starch During the survey, it was confirmed that presently 5 MT of fresh tubers will yield 1 MT of starch (e.g. Oyewole, 2002). This ratio can be improved by using high starch varieties. Improved varieties can increase the conversion to 4:1.

41

(g) Chips into starch One MT of chips yields 740 kg of starch. Kormawa, 2003: "Fresh cassava roots contains 23-27% starch on wet basis for the selected four improved varieties. On a dry weight basis, where 1000 kg of fresh roots give 300 kg of chips, the dry chips would contain about 76-90% starch or an average of 85%. This will imply a content of 74% starch if the chip has 13% moisture. Consequently, one MT of chips with 13% moisture will contain 740 kg of starch". (h) Starch into dextrin Survey: 1 kg of locally (village) processed starch will yield 400-450 grams of dextrin. (i) Fresh roots into ethanol Grace (1977); 1 MT fresh roots yields 60-110 liters; Survey: 1 MT fresh is expected to yield 100 liters. (j) Crude Alcohol into Ethanol Survey: 1liter crude alcohol yields 0.91 liters ethanol (9% reduction in volume). (k) Feed into poultry meat Survey: 5 kg feed provides for 2 kg meat.

42

Appendix B

List of Industries and Offices Visited No. INDUSTRY 1 2 3 STARCH Nigerian Starch Mills Ltd.Ihiala,Anambra State Real Food and Allied industry Ltd. Ibadan MATNA Foods Company Ltd, Akure CONTACT Stuthers Jeff, 0803359815 c/o Ajumogobia and Okeke, NAL Towers 2nd Floor, 20 Marina Lagos Km 19,Ibadan-Ife Expressway Olope Meji, Ibadan. Tel: 02-8101926, Mobile: 08023245024. J.J. Adewale, AGM Finance and Administration, N.I.B. House, Owo Rd, P.O.Box 528 Akure, Tel 0803-3581071 Giwa Street (opposite Trade fair Complex (no longer in operation) R.A Tella (production Manager) 1/7 Odutola street, Gegento Bus-stop, Oko-Oba, Agege, Tel:01-4925093. A. Dhiman (Technical Manager), J. Owoeye (Commercial controller) Km 40, Abeokuta Expressway, Sango Otta, Ogun State. Tel: 01-7742172, Mobile: 0803-3216323. Malachy Nkele Ike, Group Public Relations Manager, Km 25 Owerri Onitsha Road, Awo-omamma, Imo state. Frank Jacobs (Chairman/CEO) 1 Frank Jacobs Avenue, Mgbidi, Imo State. Mobile:08033329967 Mario Chagoury (Head Miller) Eagle Flour Road, Toll point, Ibadan / Lagos Expressway, GSM:08033239123,D/L (02) 2315874 Ismail Alao (General Manager) Km 8-9 Old Lagos Road Podo Village, Ibadan, Nigeria. Tel :02-2316103, Mobile 08023166772 43

4 5

Tygon Chemicals Femtex Nig. Ltd. Lagos ETHANOL Allied-Atlantic Distilleries Ltd. Lagos.

6

7

Nichben Group of Companies, Awo-omamma, Imo State. Jacobs Wines Ltd., Mgbidi, Imo state FLOUR Nigerian Eagle Flour Mills Ltd., Ibadan

8

9

10

Lister Flour Mills (Nig.) Ltd.

11

Alubo Processing Complex DEXTRIN / ADHESIVES / PAPER Tanu Group Ltd. Aba, Nigeria

Mrs. Rabi Umoru, President of Women's Cooperative, Family Support Programme (FSP), Lafia Samuel E. Udoh (Factory Manager) Kilo 1 Opobo Road, Aba, Abia state, Nigeria. Tel: 082-220798,226300, Fax:082-226751, Mobile:08035528636 Dr R.E Ehigiamusoe (Executive Director) No10 Ogbegie street, Ugbowo, Benin. Tel:052-602034,25447,Fax:234-052602034 or Jude Asemota:08033840077 Robert Nnana-Kalu Esq. Executive Director, 114/116 Aba-Owerri Road Umungasi Aba, Abia state, Nigeria. 1. O.H Buharshak (Technical Manager) 12 Industrial Layout, Aba, Abia state. Tel :082-220612,Mobile:080-33214005 2. Mrs Mope Omotoso (Quality Assurance Manager) 1 Henry Carr street, Ikeja, Lagos. Tel: 4971819, Mobile:08023229239 1.Uwakwe, A.M. (Regional Manager) Aba, Km 66 PH/ Enugu Expressway Aba, Abia state. Tel:082-440258, Mobile: 08034070778 2.Mrs C.A. Okowkwo (Quality Assurance Manager) Block D, Plot 4A,Wempco Road Ogba Ind. Scheme. Ikeja, Lagos. Tel: 4924438. Mobile:08033247818. Ugobueze Ohafia Street, opposite Ekesco Pharmacy, Umuahia Abia state. Chief K. Ndukwe (Chairman / MD) 45 Milverton Avenue, Aba, Abia state, Nigeria Tel:082-220088, Fax: 234-82-220909. Mr Emmanuel Akwue. c/o CAPAN, Aba Technology Business Incubation Centre, Industrial Layout Aba

12

13

De-Ladder Establishments Ltd. Benin City, Nigeria.

14

Star Paper Mill Ltd. Aba, Nigeria LIVESTOCK FEED Livestock Feeds, Aba & Lagos Branches

15

16

SEEPC (Nig) Ltd. SANDERS FEEDS. Aba and Lagos Branches.

17

Lady Ify-Ugo Feeds, Umuahia Abia State FOOD CRISPY (NIG) Ltd. Aba, Abia state

18

19

IJEOMA BAKERY, Aba.

44

20 21

Kaka Confectioneries Umuahia, Abia state. Sumal Foods Ltd. Ibadan

22

Nestle Nigeria Plc.

23 24

DE-UNITED Food Industries Ltd.(Indomie) UNILEVER Nigeria Plc

25

Temitope Bakery And Catering Services Ltd.

Mrs Amina Ekeledo (Manager) Ossah Road. Umuahia near Abia ADP Office, Umuahia, Abia State. V.P. Sudarsan (Managing Director) Oluyole Ind. Estate, Ring Road, Ibadan, Oyo State, Nigeria. Tel: 02-2310739, 2310186 L.A. Arhere, (Supply Manager) Km 32, Lagos-Badagry Express Road, Agbara Industrial Estate,Tel:01-493413-5, Mobile:08034020241 Ayo Ogunlade (Head, Personnel and Admin) Otta/Idiroko Road. Otta, Ogun State. Tel:039-722264-6,Fax:039-722266. Tunde Latona, Coy Devt /QA Manager Desmond Adeola (Marketing Manager) 1 Billingsway Oregun Ikeja Lagos. Tel:5803300-9, 1-7732951, Mobile:08034021374 Elder A.O. Imonah (General Manager) Sagamu / Benin Expressway, Sagamu, Ogun State, Nigeria. Tel.Fax:037-640433, 640044, Mobile;08033076918. 1.Ninman John (General Manager Marketing) 2.Jonarehanan (Technical Manager) Oshodi Apapa Expressway, Lagos Tel: 01-7756148. J.M. Alaba (Deputy General Manager) 3 Oba Akran Avenue, Ikeja, Lagos Tel: 4978850-4, 4962639 Demola Kolade General Manager (Technical Services) Welcome House, Oba Akran Avenue, Ikeja, Lagos. Tel: 4939069 (D/L) Mobile 08033291730 Chika E. Johnson, Plot 144, Oba Akran Avenue, Ikeja Lagos. Tel:01-4068220-9 (D/L) Fax:014960482, GSM: 080-23300408

26

TEXTILE Afriprint Nig Ltd. Lagos

27

Nigeria Textile Mills Plc, Ikeja PHARMACEUTICAL SKG-Pharma Ltd. Ikeja Lagos

28

29

Nigerian-German Chemicals Plc (Hoehst): Ikeja ­Lagos

45

30

OTHER INFORMANTS National Root Crops Research Institute (NRCRI) Umudike, Nigeria.

31 32

Abia State Agric. Devt. Program. Umuahia. Cassava Processors Association of Nigeria (CAPAN), Aba, Abia State. Goldchains International Ltd. Lagos

33

34

Nigeria Ports Authority (NPA), Lagos

1.U.J. Ukpabi (Biochemist) 2.E. Oti (Food Scientist) NRCRI, Umudike, PMB 7006,Umuahia, Abia State, Nigeria Tel: 082-440471, E- mail: [email protected] 1.E. Okoro (Programme /manager). B. Odoemenam (RUSEP Hub Officer) Mobile:0803-3666072 Humphrey Okey Nweze (President) Aba Technology Business Incubation centre, Industry Road, Aba. E-mail: [email protected] Sotonye Anga (Executive Director) Goldchains Suit, Ground Flour, NUJ House, 3/5 Adeyemo Alakija Street. Victoria Island, Lagos. Mobile:08023147572 J.A .Bucknor (Principal Manager Startistics) Corporate Headquarters, Startistics Sections, 2nd Floor, Marina, Lagos. Tel:2636730 (D/L):2600620-12 Ext.4158 FOS besides NPA, Lagos Omoshaiye O. Plot 625, Bello Aromire Street, Omole Phase2, Olowora Ikeja, Tel: 1-680067, Mobile:08033078636. Ganiyu Ajokobi, Trader Two anonymous traders

35 36

Federal Office of Statistics (FOS), Lagos. UNIDO

37 38

Wadata Market, Makurdi Agyaragu Market, Nassarawa

46

Appendix C

Participants in Stakeholders Meeting, September 25, IITA/USAID/UNIDO, Abuja: Dr. A.A. Balogun Director SMEDAN, Abuja Dr. P. Kormawa Program Coordinator IITA, Ibadan Mr. M.A. Lawal Ministry of Industry, Abuja Mr. C.Amad. Alphonsus Sr. Manager Bank of Industry, Lagos Mr. Ibrahim Garba V.P SME-Manager Ltd, Lagos Dr. Andrew Levine USAID, Abuja Mrs. Stella Ibrahim Coordinator Nigerian women in Mining, Abuja Dr. G. Asumugha NRCRI, Umudike Dr. Daniel Ayo Director Raw Material Research and Devel. Council (RMRDC) Dr. M.O. Omojole Chief Scientific Officer, RMRDC Mr. Adesoji Adesugba Assistant Director NIPC Mr. Eric U. Ani Sr. Investment Officer NIPC Dr. Mpoko Bokanga Industrial Development Officer UNIDO, Abuja Dr. H.B. Singh COP DAIMINA Project, Abuja Mr. Boma Anga Chair Presidential Committee on Cassava Market Development and Export, Abuja/Lagos Dr. Henk Knipscheer Consultant, IITA

47

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