SMALL SCALE RICE PRODUCTION BUSINESS IN NIGERIA (STEP BY STEP GUIDE)
The Central Bank of Nigeria (CBN) released a report recently which shows that Nigeria a country of about 180million people spends about $1.65 billion annually to import Rice into the country and implored Government to create an enabling environment for large scale Rice production business in Nigeria.
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SMALL SCALE RICE PRODUCTION BUSINESS IN NIGERIA (STEP BY STEP GUIDE)
Thus, the recent closure of all land borders by the Federal government to stem the smuggling of cheap foreign Rice into Nigeria was highly applauded by most Nigerians.
DEMAND FOR RICE IN NIGERIA
According to economic experts this singular measure taking by Government of Nigeria will in no small measure boost Rice production business in Nigeria, create employment opportunities for the unemployed youths and also help the country save the billions of Dollars previous been spent on Rice Importation.
The Closure of the Nigeria land borders with neighboring countries like Benin republic, Chad Republic, Cameroun and Niger republic, has spoilt business for most Smugglers of foreign Rice into Nigeria, they now complain bitterly about been out of business saying “it’s no longer business as usual “
Due to high patronage currently being experienced by sellers of the locally produced Rice in Nigeria, I can authoritatively tell you that most Rice farmers, Millers and distributors in Nigeria are now smiling to the bank because Rice production Business in Nigeria has become a gold mine.
STARTUP REQUIREMENT FOR RICE PRODUCTION BUSINESS IN NIGERIA
To enable you setup a profitable Rice production business in Nigeria below are the startup requirement and the steps to follow.
Write a Business Plan
To know a profitable business anywhere in the world it is required you conduct a thorough research/Feasibility studies to know the best location where it will thrive, it help will you to know if you have the required skills and finance to run the business successfully.
After the doing the research/Feasibility studies and you discover the business is profitable then you can now go ahead to write a comprehensive business plan to guide you in implementing the Rice mill project. Also the Rice mill business plan will become a working document that can be presented to investors/banks for a loan.
Get your Rice Milling Business Registered
To carry out your Rice production Business in Nigeria freely in the country, you are required by relevant business laws to register your Rice mill business with the Corporate Affairs Commission (CAC).
Refusal to register your business in Nigeria with (CAC) means the following as stated below.
- You are operating an illegal business in Nigeria which will prompt relevant government agencies to take legal action against you.
- Not registering your business in Nigeria will be a great disservice to your rice mill business because you wouldn’t be able to open a bank account for the business in Nigeria
- Banks will not honor bank cheques written in your company’s name because it’s not registered.
- Getting large supply contracts from government and multinational companies will be difficult because they always deal with registered companies
So please try as much as possible to get your Rice production business registered in Nigeria with the Corporate Affairs Commission (CAC) and preferably register a Limited liability company.
Source For Startup Capital (Finance)
The initial capital required for a Rice production business in Nigeria startup varies depending on the production capacity of your Rice Mill. For a small scale setup you need less capital while for a large scale you will need more capital.
E.g To setup a 2MT/day small scale Rice mill in Nigeria you need about N5 million while the large (automated) Rice mill in Nigeria requires hundreds of millions of Naira as startup capital.
NOTE: The amount stated above covers cost of equipment; plant building/facilities, raw materials and operational cost and miscellaneous expenses.
The number problem you will face when starting a Rice production business is the challenge of finance this is because the business is capital intensive. So if you lack the needed startup capital, I will advice you approach any Micro Finance bank, Corporative society or commercial bank for a loan.
Choose Suitable Location Site For The Rice Milling:
For smooth running of your Rice Production business, it’s advisable you locate your Rice mill close to the source of getting raw materials (raw Rice) and also a place that is close to the market where you can sell your bags of Rice.
The land purchased in the chosen location should be spacious enough to accommodate your Rice mill, offices and also a space for a ware house to store the bags of Rice you produced.
Buy Needed Rice Milling Equipment/Machines
The main startup equipment/machinery needed for small scale Rice production business in Nigeria is the Rice milling machine.
While the large or automated Rice production plants generally come with the integrated milling machines. It is a complete process you can get from several machines. The integrated Rice mill consists of the Rice milling machine, Drying machine, Rice Polishing machine, conveyors, silos, bagging machine and a backup power generator.
The equipment needed to startup Rice production business is ready available in the country. You can choose to either purchase the imported Rice milling plant or ask an experience machine fabricator in Nigeria to fabricate and install your Rice milling machines.
Employ Capable Workforce
You alone can’t do all the work that is needed to be done in the proposed Rice Mill; therefore you will need to employ other people to work with you.
You will need to employ laborers who will help to offload raw rice and load already processed rice in your Rice mill. Also you will need employ experience machine operators to handle the Rice milling process (De-husking, drying, polishing and bagging).
Source For Raw Material
The main raw material for Rice production business is the raw Rice; this is readily available in Nigeria because Rice can be grown in virtually all parts of the country.
So as small scale Rice mill owner you can buy Raw Rice from farmers in Nigeria to process in your Rice mill and later diversify into Rice farming to maximize profit.
Rice Production Process
The Rice production process involves several basic stages and they are as follows
- Pre-cleaning of the raw Rice to remove all impurities
- De-stoning: Removing stones from the Paddy.
- De-husking: Removing the brown skin the covers the Raw Rice
- Polishing or whitening
- Grading and separation of white rice
- Mixing Process
- Mist polishing process
- Weighing of rice into 25kg and 50kg
- Packaging or Bagging of the Rice into 25kg and 50kg bags ready for the market.
To operate a profitable Rice production business in Nigeria, there’s a need to build chains distributors and distribution channel to enable you sell your product.
To reach potential distributors, sellers and consumers of your Rice, you will have to create the needed public awareness through placement of advertisements in National Newspapers, Radio/TV, online social media platforms and do outreaches to government offices, Hotels, Eateries and restaurants.
Through these Advertising medium you will be able to reach targeted consumers and the general public at large.
Rice production business in Nigeria is capital intensive but also lucrative too; I believe this article has exposed its Profitability, requirements for startup and action steps to take if you really want to be part of those Rice millers currently smiling to the bank with their of millions Naira as profit.