I hate to be the one to burst your bubble if you have been grinning from molar to molar, celebrating Pa Audu’s “incredible feat” of exporting 72 tonnes of yam to the US and UK. I watched the report on AIT. Nicely packaged yam, in lovely cartons. I was tempted to celebrate Pa Audu for this achievement. Then I ran the numbers.


According to the May 2017 report by the Nigeria Bureau of Statistics, 1kg of yam goes for N256. This means that 72 tonnes of yam would have a street value of N18 million. Do the math. Forget that this is less than 50% of the volume of trade on a good day in Katsina Ala yam market every week. Anyway, the yam was well packed, and then freighted to the US and UK. Lets us assume than the packaging and freighting costed N3 million (and it might be a lot more, given that yam is heavy). So we have about N15 million net worth of yam (18 – 3 = 15). Assuming we sell it at twice the price, we would make a profit of N15 million. Again, let us assume that we did not incur additional cost in the transaction. So, here is the summary: we exported 72 tonnes of yam, and made N15 million. Good business, good profit.

Now this is where I am going with this: if 72 tonnes of yam is processed to pharmaceutical grade starch, (PGS) (that is the major component of tablets and capsules), we will get about 9.7 tonnes of pure PGS. I am a pharmacist, I know. Depending on your source, pharmaceutical grade starch goes for anywhere from $20 – 40/kg in the international market. And you can google this up. Pa Audu’s 72 tonnes of yam is therefore worth a princely N102 million if it was processed to PGS (assuming it is sold for $30/kg, just to be conservative). So, N18 million worth of yam, processed to N102 million, profit of about 84 million.

The question is, has Audu made N15 million or lost N84 million?

Imagine, for instance, that Benue State was interested in setting up a starch production plant in Katsina Ala. Would we need to export 72 tonnes of starch to make N15 million, instead of making 84 million? And this is a state that makes a pitiable IGR of N250 million per month. The same Benue produces arguably half of the oranges in the country but there is no single fruit juice making industry in the state. This is not about Benue.

Nigeria produces 50 million metric tonnes of cassava annually, 20% of world production according to FAO, but what do we do with it? We convert it to fufu and eat. Zero percent is processed to PGS or other value-added products. If only half of it is processed to PGS, we would be making N35 billion per annum in sales. Again, open Excel and do the math.

So we have Audu exporting yam, exporting jobs, loosing revenue and feeling cool. And we have Gov. Ortom in the background, loving the spotlight of this new enterprise, waiting for applause. He cannot see the opportunities and the waste. He cannot understand why IGR is only N250m/month. Then we have the federal government exporting crude, exporting jobs, messing us all up.

We have us, eating 50 million metric tonnes of cassava, converting it to pooh when we can convert it to cash.

And we want to be called a developing country.

The fact that Pa’ Audu Ogbe meant well naturally to the extent of his knowledge. However, superior arguments shows that what Nigeria need is for Government to provide Tax Holidays & orher Fiscal & Non Fiscal incentives for Local & Foreign Investors to Invest in the mis-gaps, which Value addition to Processing, Parking, Storage, Standardization of Exportable Cash Crops/Agricultural produce…

For more related articles, Kindly visit:

SOURCE: https://brandspurng.com/pa-audu-ogbes-nigerian-yam-export-a-wrong-step-in-the-right-direction/

na so we de export crude oil and then import refined products at almost 11x the price if we had refined it ourselves but...the cabals wouldnt let our refineries work...but dangote can own a refinery

Good right up. Only private investors can think along this line. Baba want sharp sharp achievement . let's hope somebody will grab this post and do d needful

Enlightening...

karlz:
na so we de export crude oil and then import refined products at almost 11x the price if we had refined it ourselves but...the cabals wouldnt let our refineries work...but dangote can own a refinery

BlueBrothers:
I hate to be the one to burst your bubble if you have been grinning from molar to molar, celebrating Pa Audu’s “incredible feat” of exporting 72 tonnes of yam to the US and UK. I watched the report on AIT. Nicely packaged yam, in lovely cartons. I was tempted to celebrate Pa Audu for this achievement. Then I ran the numbers.


According to the May 2017 report by the Nigeria Bureau of Statistics, 1kg of yam goes for N256. This means that 72 tonnes of yam would have a street value of N18 million. Do the math. Forget that this is less than 50% of the volume of trade on a good day in Katsina Ala yam market every week. Anyway, the yam was well packed, and then freighted to the US and UK. Lets us assume than the packaging and freighting costed N3 million (and it might be a lot more, given that yam is heavy). So we have about N15 million net worth of yam (18 – 3 = 15). Assuming we sell it at twice the price, we would make a profit of N15 million. Again, let us assume that we did not incur additional cost in the transaction. So, here is the summary: we exported 72 tonnes of yam, and made N15 million. Good business, good profit.

Now this is where I am going with this: if 72 tonnes of yam is processed to pharmaceutical grade starch, (PGS) (that is the major component of tablets and capsules), we will get about 9.7 tonnes of pure PGS. I am a pharmacist, I know. Depending on your source, pharmaceutical grade starch goes for anywhere from $20 – 40/kg in the international market. And you can google this up. Pa Audu’s 72 tonnes of yam is therefore worth a princely N102 million if it was processed to PGS (assuming it is sold for $30/kg, just to be conservative). So, N18 million worth of yam, processed to N102 million, profit of about 84 million.

The question is, has Audu made N15 million or lost N84 million?

Imagine, for instance, that Benue State was interested in setting up a starch production plant in Katsina Ala. Would we need to export 72 tonnes of starch to make N15 million, instead of making 84 million? And this is a state that makes a pitiable IGR of N250 million per month. The same Benue produces arguably half of the oranges in the country but there is no single fruit juice making industry in the state. This is not about Benue.

Nigeria produces 50 million metric tonnes of cassava annually, 20% of world production according to FAO, but what do we do with it? We convert it to fufu and eat. Zero percent is processed to PGS or other value-added products. If only half of it is processed to PGS, we would be making N35 billion per annum in sales. Again, open Excel and do the math.

So we have Audu exporting yam, exporting jobs, loosing revenue and feeling cool. And we have Gov. Ortom in the background, loving the spotlight of this new enterprise, waiting for applause. He cannot see the opportunities and the waste. He cannot understand why IGR is only N250m/month. Then we have the federal government exporting crude, exporting jobs, messing us all up.

We have us, eating 50 million metric tonnes of cassava, converting it to pooh when we can convert it to cash.

And we want to be called a developing country.

The fact that Pa’ Audu Ogbe meant well naturally to the extent of his knowledge. However, superior arguments shows that what Nigeria need is for Government to provide Tax Holidays & orher Fiscal & Non Fiscal incentives for Local & Foreign Investors to Invest in the mis-gaps, which Value addition to Processing, Parking, Storage, Standardization of Exportable Cash Crops/Agricultural produce…

For more related articles, Kindly visit:

SOURCE: https://brandspurng.com/pa-audu-ogbes-nigerian-yam-export-a-wrong-step-in-the-right-direction/

Exactly what i said when i saw that package.When there is spicy hunger in the land.

Do not forget that its Nigeria........"A nation were nothing works"....NewsWatch october 6 1986


All this same stories have being on since 1986 but it seems we are so blessed with corrupt leaders who just see no good in the country....


The problem with Nigeria is that we like to play our 3rd, 4th or 5th eleven to play a league match that calls for the best eleven... Nigeria therefore cannot play in the first division. It can only play in the last division........


Don't expect it to change anytime soon......


A very Nice write up.....

If our generation can work together in unity, we can take this nation forward....WE CAN

MrHenshaw:




Exactly what i said when i saw that package.When there is spicy hunger in the land.

Thank you!!
What I see in d analysis is that I don't believe Nigeria have reach a food sufficiency level talkless of exporting as raw yam or phamacitical product.
That's my thought. I stand to be corrected

FP na, Mods pls do the needful. Lets learn from contributions.

This got me thinking. Effective maximisation of every chain in key to an economy...

Nice post but the author is taking far above the level of our political office holders.

Nice post but the author is talking far above the level of our political office holders.

ok

Information good o
i no sabi PGS before oo

information is power oo.

Watched an interview with a certain business analyst on TV this morning and he had to beat around the bush cos he does not know what PGS means.

Just like someone said above: This is Nigeria, where nothing works. Let me share my own wonderful experience. After the whole talk and brouhaha of igbos investing in the south east, i decided to set up a company in the Eastern heartland this 2017. I did my research and told myself that if my company can employ at least 15 people, it will add to the bottom line to reduce unemployment in the state. As it stands now, this is my current situation:

1. Company incorporation i started in January 2017 with CAC, till date, i haven't gotten my certificate of incorporation. One week, one story. My lawyer sef don tire.
2. Cost of land in the south east is very expensive. For easy accessibility to customers, i still had to open another office in the heart of town. This alone cost me N1.2M excluding cost of putting the office in order.
3. Since January i launched, i haven't seen power supply till date, i have been running on Gen 24/7.
4. The governor embarked on road expansion project and messed up the entrance to my business premises. I had to spend extra money to checkmate the flood that resulted.
In fact my brother, the list goes on and on. When you take all this into consideration, you will find out that it is better you export and save yourself the headache than to process herein Nigeria. Just few weeks ago, Dangote was on air begging the governor of a state to have mercy on his company; as his coy is being killed slowly with multiple taxation. I can go on and on but the bottom line is this:

This is Nigeria, where nothing works.

BlueBrothers:
I hate to be the one to burst your bubble if you have been grinning from molar to molar, celebrating Pa Audu’s “incredible feat” of exporting 72 tonnes of yam to the US and UK. I watched the report on AIT. Nicely packaged yam, in lovely cartons. I was tempted to celebrate Pa Audu for this achievement. Then I ran the numbers.


According to the May 2017 report by the Nigeria Bureau of Statistics, 1kg of yam goes for N256. This means that 72 tonnes of yam would have a street value of N18 million. Do the math. Forget that this is less than 50% of the volume of trade on a good day in Katsina Ala yam market every week. Anyway, the yam was well packed, and then freighted to the US and UK. Lets us assume than the packaging and freighting costed N3 million (and it might be a lot more, given that yam is heavy). So we have about N15 million net worth of yam (18 – 3 = 15). Assuming we sell it at twice the price, we would make a profit of N15 million. Again, let us assume that we did not incur additional cost in the transaction. So, here is the summary: we exported 72 tonnes of yam, and made N15 million. Good business, good profit.

Now this is where I am going with this: if 72 tonnes of yam is processed to pharmaceutical grade starch, (PGS) (that is the major component of tablets and capsules), we will get about 9.7 tonnes of pure PGS. I am a pharmacist, I know. Depending on your source, pharmaceutical grade starch goes for anywhere from $20 – 40/kg in the international market. And you can google this up. Pa Audu’s 72 tonnes of yam is therefore worth a princely N102 million if it was processed to PGS (assuming it is sold for $30/kg, just to be conservative). So, N18 million worth of yam, processed to N102 million, profit of about 84 million.

The question is, has Audu made N15 million or lost N84 million?

Imagine, for instance, that Benue State was interested in setting up a starch production plant in Katsina Ala. Would we need to export 72 tonnes of starch to make N15 million, instead of making 84 million? And this is a state that makes a pitiable IGR of N250 million per month. The same Benue produces arguably half of the oranges in the country but there is no single fruit juice making industry in the state. This is not about Benue.

Nigeria produces 50 million metric tonnes of cassava annually, 20% of world production according to FAO, but what do we do with it? We convert it to fufu and eat. Zero percent is processed to PGS or other value-added products. If only half of it is processed to PGS, we would be making N35 billion per annum in sales. Again, open Excel and do the math.

So we have Audu exporting yam, exporting jobs, loosing revenue and feeling cool. And we have Gov. Ortom in the background, loving the spotlight of this new enterprise, waiting for applause. He cannot see the opportunities and the waste. He cannot understand why IGR is only N250m/month. Then we have the federal government exporting crude, exporting jobs, messing us all up.

We have us, eating 50 million metric tonnes of cassava, converting it to pooh when we can convert it to cash.

And we want to be called a developing country.

The fact that Pa’ Audu Ogbe meant well naturally to the extent of his knowledge. However, superior arguments shows that what Nigeria need is for Government to provide Tax Holidays & orher Fiscal & Non Fiscal incentives for Local & Foreign Investors to Invest in the mis-gaps, which Value addition to Processing, Parking, Storage, Standardization of Exportable Cash Crops/Agricultural produce…

For more related articles, Kindly visit:

SOURCE: https://brandspurng.com/pa-audu-ogbes-nigerian-yam-export-a-wrong-step-in-the-right-direction/

what will be net revenue if the N15m is eventually used in importing grasses from Brazil.

I personally find this site very resourceful in terms of Banking, Insurance and finance news, articles and opinion.
https://brandspurng.com

booked

Food insufficiency is as a result of poor infrastructure. Food is produced abundantly but wastage, bad planting and harvesting methods cause so much loss, that what gets to market is subpar at best.

I support installing processing centres in states where agriculture is king. That is a no brainer. what are the governors and the local businessmen doing? This is ripe IGR opportunity. I would say all businessmen but we are still very backward and it is hard for a non indigene to get things done The community will frustrates the hell put of you.

All that being said, the market is wide and deep. There cannot be a shortage of need in Nigeria and there will not be a shortage of of opportunity. Lets export, process, plant more, harvest better, create employment, generate Fx. It is not a either or we can can do all the above by improving farm input, seeds and methods, processing into high value products, improving storage and transport, exporting for FX and getting machinery inputs to improve harvest. We can at least increase our yam output by 20-30% if that increase alone is exported, you can use the funds to bring in tractors, planter, harvesters that make the work easier and a lot more efficient. even the processing machines need to be bought with FX. have a 5 year plan and see how a focused execution can create the sub economy of just Yam, then replicate for ginger, cassava, corn, cocoa, groundnut, palm oil, rice, etc.

Jmodel:


Thank you!!
What I see in d analysis is that I don't believe Nigeria have reach a food sufficiency level talkless of exporting as raw yam or phamacitical product.
That's my thought. I stand to be corrected

Hmmmm.

Ok