Exportation of Charcoal from Nigeria (Cool Business)

The cry for alternative energy source has put CHARCOAL in the forefront in the global market. A large market exist in EU, USA and ASIA with prices ranging from  200 Euro to 210 Euro per ton (FOB Nigerian Port), depending on mode of packaging. The charcoal industry is a multi-billion dollar industry and a money spinner for interested investors. The United Kingdom alone consumes more than 60,000 metric tons of charcoal annually, out of which about 70% comes from tropical Africa. Other countries around the world equally consume charcoal in great quantity.Charcoal is mainly produced from tropical hard wood, although there are other sources like coconut shell. The process of production is called PYROLYSIS. This means burning of wood under high temperature in the absence of air. This product is virtually available all over Nigeria as many local communities have perfected the technology of charcoal production. Some known charcoal deports are found in places like Oyo, Isheyin, Saki Igbo-Ora, Ogbomoso- all in the western part of the country. We also have depots in Jebba, Omu Aran, Egbe, Kabba in the Central States. Charcoal is found in abundance also in Minna, Jos and Kaduna. Besides, an individual can produce his own charcoal wherever he/she is located.

 Charcoal has a seasonal market, but the season differs from one country to another. For instances in Belgium, UK, Holland, France, Germany and Denmark, the Sales season is from May through August because that is their summer time.The Europeans give out their orders from September to May of the following year.

 In countries like Kuwait, Israel and other Asian countries, it is all-year round and order is placed from January through December. However, there are some big time importers in Europe who also order all year round. Companies like Big K Charcoal Limited and Diamond Fuel etc, in the United Kingdom order all year round.

 There are certain standard requirements to be met in charcoal exports; parameters like fix carbon, Ash content, volatile matter, moisture content need to meet buyers specification. Some of the buyers use their local agents to inspect here when loading. Others sometimes request for presentation of sample of the product before shipment.

 Packaging of charcoal is usually done to the specification of the buyer. Some want bulk packaging, in which case, the charcoal is tipped into open high cube containers while others prefer packaging into finished packs like 3kg, 5kg, 10kg and 15kg. Shipping is done through a reputable forwarding company and Terms of Trade can either be by letter of credit or Cash Against Document. The latter is however easier and less costly than the former. Specifically, the current price of charcoal (bulk delivery) is between 190 to 195 Euro per ton (FOB Nigerian ports). Smaller packs in paper and carton cost between 230 to 240 Euro per ton also FOB Nigerian port.  Packaging in bulk into containers is easier for beginners because capital investment is low.

A container load (40 feet) which contains about 21 to 23 tons of bulk charcoal will cost between N450,000 to N700,000 to process and be made ready for export. Getting capital for the business is easy. All that a prospective entrepreneur needs to do is to source for the orders. Most financial institutions are willing to participate in the business once a valid order is presented. There are also many venture capitalists and individuals with large reserves of fund who will be willing to do the business with you and share your profit at a given ratio. For a diligent entrepreneur, there is a big incentive that comes in form of export expansion grant, which the government normally gives to big time exporters. A company known as B. J Export which is into this business of processed charcoal export benefited from the Export Expansion Grant to the tune of N16,762,222.99 in April 2003.

In that year, a total sum of N9.889 billion in form of Negotiable credit certificate (NDCCS) was disbursed to 115 exporters from January to September (The Punch, Thursday, April 8, 2004. page 22)