Nigeria produces about 160,000 tonnes of cashew nuts, valued at $300million, every year, putting the country in the league of the Top Ten highest producers of cashew in the world. But Nigeria and its entrepreneurs could earn much more and it is a travesty that over eight million tonnes of cashew is lost per annum by local farmers who are unable to store or preserve the fresh product, and end up wasting it by throwing them away.
Sadly too, the country exports raw nuts while it could earn additional $5billion if there was a plan to process nuts locally before export.
Let’s understand cashew a little more before we can explain how we can make millions from the crop. Many people in the southern and middle belt part of Nigeria know what a cashew tree and nut looks like. Cashew grows successfully in virtually all agro-ecological zones, including the semi-arid areas.
However, there is a higher concentration in the middle belt areas, in smallholder farms and plantations. Cashew production comes from over 28 states including Kogi, Kwara, Oyo, Edo, Ondo, Benue, Cross River, among others.
Cashew has been cultivated for food, drink and medicine for over 400 years. All parts of the fruit are of economic value and, and entrepreneurs especially look out for the apple which is consumed as food or fruit and it is very rich in vitamin C.
The apple can be dried, canned or eaten fresh. It can also be squeezed to fresh juice, which can be fermented into cashew wine which is a popular drink. The cashew nut can be eaten directly, but the roasted and salted nut is another big commercial delicacy, usually displayed for sale in supermarkets or hawked on the streets of major cities.
Confectionery makers also use its byproducts to produce sweets, ice cream, cakes and chocolates. The kernel byproduct is used to produce industrial raw materials for phenolic resins and friction powder for the automotive industry – like brake linings and clutch disks. It is also an additive for moldings and paints.
Historically, in the 1980s, Vietnam’s cashew production was at the same level with Nigeria’s. In the early 1990s, Vietnam began processing its cashew and 16 years later, the country had become the largest processor and exporter of cashew kernels in the world and by 2013, Vietnam already earned $1.8 billion from cashew kernel export to over 80 countries.
Currently, India’s cashew exports amount to over $2.5 billion and Vietnam generates as much as $3 billion each year, mainly from processed kernel.
However, the Nigerian cashew industry is suffering from declining productivity and dwindling export earnings, thus making the commodity less competitive in the international market, compared with other African countries like Gabon, Cote d’Ivoire, Benin Republic and Ghana.
Entrepreneurs can intervene in this huge business opportunity by following the example of Vietnamese and Indian entrepreneurs. A tonne of processed cashew nuts, when exported, is sold for $10,000 while the raw cashew nuts are sold at $1,200.
Entrepreneurs could therefore set up processing plants to process the nuts and export, rather than exporting the nuts raw. So in the next few years, we will no longer export raw cashew nuts, but roast the cashew nuts for export at a wider margin. The move would also reduce the waste of cashew fruits and delay in the export of raw nuts out of the country.
A good processing plant that can turn out 10-20 tonnes per day may cost about $2m, which is very expensive. However, a good business plan and strategic partnership with key stakeholders including foreign technical alliances, could attract financing from several financial institutions to start up production.
Currently, the federal government is planning to set up cashew processing plants in four of the leading cashew producing states which are: Enugu, Benue, Kogi and Oyo, to add value to the product and create employment and wealth in the country.
So another way entrepreneurs can make money is to participate in the value chain these government plants will create by engaging in cashew farming, brokering sales from farmers and supplying regularly to the plants, providing transportation, producing bags and packaging required for export purposes, brokering export and foreign off-take, and so on.
Thirdly, there is a dearth of training in this critical area, and setting up an excellent training facility or strategic partnership that will bring foreign, hands-on trainers to the country to teach, would also be highly successful.
Entrepreneurs should focus on the potentials of processing the different by-products of cashew to earn foreign exchange, which would turn the industry to a money making machine for all stakeholders.