Charcoal Export Business

 Charcoal Export Business

My dear Brother,

Sorry for the delay in getting back to you as per our discussion it’s because of my movement however, its better to be late than never!

We have two issue to look into, that is === Charcoal Export Business and ==Sesame Seeds as requested. I will start with that of Charcoal perhaps I will be able to say good enough.

Charcoal Export Business: 

By God's grace I will be brief but straight to the business points as follows: 

Wood charcoal is in high demand in different parts of the world especially Europe. It is about the easiest and cheapest to export in Nigeria. It is one of those products available in commercial quantity, several tons readily available for export especially during dry season. Wood Charcoal of Nigerian origin is no doubt one of the best in the world and it is highly sought after.  However, I heard of recent that some good Charcoals are getting out of Ghana as a competition to Nigeria Charcoal. But I assure you that you can best of such in Nigeria whenever you are ready to venture into it.

Why Charcoal Export Business? 

As I have been telling my clients and students all the time there is no need of going into provision of a product or service that is not in demand in the market. So it will be unreasonable to venture into Charcoal Export business if there is no demand for it. It is incumbent on me to let you know that there is high demand for Charcoal abroad regularly. Consequence upon different in temperature at different seasons across the world, cooler countries of the world need to generate heat to keep themselves and their environment warm and sometimes for cooking so, look onto burning of charcoal for heat generation. Wood charcoal exported from Nigeria is used as fuel for cooking. It is mostly used in restaurant and homes in the preparation of barbeque.

Please don’t ask me why Charcoal should be in demand while they have more reliable constant supply of electricity that we do in Africa especially when compared to Nigerian situation. The main reason is cutting Cost Attitude of the white men! They are not wasteful and they want to preserve their funds unlike many in Africa especially in Africa.

Charcoal: 

Charcoal is produced from burning of hard wood under concealed environment of no oxygen. The hard wood charcoal is hard and does not break easily. It is prepared and packaged by specialists in the business at where the business is prominence.

Charcoal Availability: 

Availability of good hard Charcoal is Oyo state (Oyo, Iseyin, Ogbomoso Saki, Igboho, Igbo-Ora, Igangan etc), Kwara, Benue, Niger, Plateau, Kaduna and Kogi States. The business is more populous in Oyo state perhaps because of its proximity to Lagos port. 

Charcoal Season: 

The beat period for charcoal production is Dry Season when it will be easy to get wood and burn them without fear of rain disturbance. It starts in Nigeria around October through May of the following year.  This is to avoid the contamination of the products with moisture and others associated with raining season in Nigeria.

Charcoal Foreign Buyers: 

United Arab Emirate, United Kingdom, Belgium, Germany, Spain, Netherland, Greece, and China are among the places you can send your Charcoal to my brother.

Packaging Charcoal For Export: 

Packaging of charcoal is usually done to the specification of the buyers and it can be into any of these two:

1.       Bag= Based on the requirement of your buyers a certain quantity of charcoal are parked into  

          bags and later loaded into 40feet container for shipping. Buyers can prefer packaging into   

         finished packs like 3kg, 5kg, 10kg, 15kg, 20kg and or 25kg. It highly advisable to sent 

         according to your buyers’ request.

2.       Bulk= Bulk parking is easy and does not need bags as the whole quantity of charcoal will be directly loaded into container. However, there was a problem on the sea in the first week of January 2016 as there was a fire incident in a ship carrying a container of bulk charcoal. The Container caught fire and caused damage to other goods. The ship had to return to Nigeria port for offloading. It has now put much stress on shipping now. There is likelihood that bulk might be ban or and insurance coverage might be introduced. I need to let you know that Bulk Packaging into containers is easier for beginners because capital investment is low as you don’t need to buy bags.

Standard Packaging Requirements for Charcoal Export: 

In order to ensure that the charcoal for exportation meet international standard the buyers usually state some parameter expected of your charcoal. Some of these buyers sometimes appoint local representatives to monitor buying of charcoal in Nigeria market. These local inspectors might need to there at the point of loading of your charcoal to the container to ensure that the quality is maintained otherwise you can be asked to send sample or make a trial export.

Some of the parameters will circles around: fix carbon, Ash content, volatile matter, moisture content need to meet buyers’ specifications.

Charcoal Packaging Cost: 

One needs to be careful in talking about Packaging cost of Charcoal especially when talking to beginner like you. A container load (40 feet) which contains about 21 to 23 tons of bulk charcoal is likely to cost between N450, 000 to N700, 000 to process and be made ready for export. The major challenge is buying the right stuff and packaging it well. I need to also let you know that hauling an FCL (Full Container Load cost between N120,000 and N200,000. The Factors are if your purchase is down far north your haulage expenses will be higher though you might experience a better grade or good price compare to otherwise.

Charcoal Selling Price: 

Foreign currencies like Dollar and Euro are stable with time so the price of Charcoal is usually stated in such. Specifically, the current price of charcoal (bulk delivery) is between 175 to 195 Euro per ton (FOB Nigerian ports). Smaller packs in paper and carton might be between 200 to 240 Euro per ton also FOB Nigerian port. It is very important I tell you that a beginner might not be able enjoy the same price with old timer for many reasons time may not permit me to go into here.

Business Duration: 

The cycle of a Charcoal Business transaction is about 6 week after shipping. You need to get in touch with your buyer as regards sending of Bill of Lading as notification and confirmation of shipping the Charcoal to designated shipping line.

Sometimes your payment might be earlier depending on the type of contract you entered with your buyer.

Return on Investment (ROI): 

 Another area of caution is what to be expecting from a transaction of charcoal export business. From my corporate business experience so far I can tell vividly that a lot of factors can bring variations between expected profit and actual  in any business. However, Charcoal Export business is a profitable one but with low margin. If one is looking for heavy load of profit the business might not be ideal one.  Many people were deceived by people who want to sell one handout or the other. The profit on the investment can be calculated from using the below template:

Total Cost    (a)                                                                                             =N730, 000
FOB Price                           =180 Euro/MT
No. of Tons   = 23
Selling Price of Charcoal=     180 x 23=    4140 Euro
Convert to Naira=                   4140 x 210 =                                                 N869,400
Less Bank Charge=                                                                                       (N8,694)                 

       Net Revenue    (b)                                                                                 N860,706

                                                                                                                      (N730, 000)
Profit=                                                                                                            N130,706

 

NB: This template is to enable you see how the profit is calculated but it might be a reality of the market now or tomorrow.

Thank you.

Bayo Lawal

PHONE: +234 08181200123 + 23408055366212+ 234 0802575268

palcorubng@gmail.com