Idea 7 of 52 – Cassava logistics from Farms to Market
- The Idea
In one of my trips from rural Oyo state (Eruwa, Ibarapka) to Ibadan, I noticed heaps of harvested Cassava being loaded to some pickup trucks, and there were some already ground, that were spread on the floor by the side of the road to dry. Herein lies the 7th Business startup idea in our series.
Logistics for Cassava from farm to Processing locations.
I saw an article last year which highlighted the anomaly for Nigeria the largest producer of Cassava in the World to be importing Garri (West African staple food), produced from Cassava (Omotosho, 2016).
The Idea here is to join in the supply chain from farming of cassava to the supplying the harvested Cassava to the place where it would be processed.
- Look for a Cassava farmer or any very large Cassava farms.
- Search for companies that need cassava as a raw material (Google search)
- Get in touch with them, and find out the quantity they would need.
- Be sure to know the quantity you can supply.
- Rent/Buy a truck for the trip
- Agree on price with the farmers, and the Company.
- Charge your logistics, sufficient enough for running cost and a reasonable profit
- Collect from the Farmers, supply to the Factory or processing locations.
- The Market
The Market is vast as Cassava has a wide variety of applications. One of the applications being Garri makes up a part of the daily meal in some Nigerian households. The other uses of Cassava, e.g, flour for Cassava bread, feeds for Agriculture, industrial starch, Ethanol for Bio-fuel, etc. all makes the demand for Cassava so high that it seems Nigeria cannot sufficiently supply enough to meet this both local and global demand. Joining this supply chain would help in facilitating the ease of getting the produce straight from the farms to where they can be stored, preserved or processed. This would also ensure that all the harvested produces are maximally used.
- The Business
Value Proposition: Logistics for Cassava produce, ease of transportation of harvested produce to the processing locations.
Customer Segment: All companies that use cassava in one way or another as a raw material for their production.
Distribution Channels: Vans, or other vehicles that can transport the harvested products.
Customer Relationship: Direct
Key Activities: Selling, negotiating, food products logistics, customer service, delivery etc.
Key Resources: Truck, Workforce (driver, drivers mate, etc.)
Key Partners: Cassava processing businesses, Farmers, Government, regulatory agencies, Associations, etc.
Cost Structure: Truck purchase or rental, Staff pay, work related accessories, licenses and registration, etc. Be sure to understand all the cost implications before going into this.
Revenue Stream: Payments for Logistics
As I observed, there are already some people in this line of Business so if you intend going into this, you would need to have a competitive advantage over the others. You could also identify a niche industry or location which you could serve.
There is the threat from other African countries that currently have markets in Nigeria they are serving. Some Nigerian marketers may be importing from them and also adds to competition. If these businesses using Cassava for their operations go out of business, then this logistics services business would suffer.
I guess it is safe to say that Cassava would always be in demand. For as long as Garri consumption and other uses of Cassava remain, this middleman-logistics business would remain.
So until next week, Stay inspired.
For more information, comments or feedbacks, get in touch.