Mr. Tuoyo Dudu, Founder and CEO of TUDU Feeds, a food processing and livestock feeds manufacturing company, has noted that young entrepreneurs willing to go into cassava peel processing stand to make huge returns. According to him, cassava Peel processing is a highly profitable business that can generate more than N1.5million in profit in one month. Dudu who shared very interesting insights about the business in this interview with OBINNA EZUGWU, said that Nigeria, being the world’s largest producer of cassava, has vast untapped potential and comparative advantage in it. Excerpts:
Many Nigerians are aware of ‘gari’ processing, but the cassava peel processing you do is quite different. What does it entail?
What we are producing is called HQCF, which stands for High Quality Cassava Feed. This is basically livestock feed. It is gotten from the peel of cassava tubers. What happens in normal garri production is that the cassava is harvested and its’ back peeled off and thrown away, such that after a while, the peels begin to constitute environmental problem. For instance in Nigeria, approximately 98 percent of cassava peels are wasted. The reason is that people haven’t done researches to ascertain what uses it can be put.
Again, during the rainy season, when the cassava is harvested and the peels removed and dumped outside, once rain falls on them they rot away. We, as a business, are coming in with an innovation; a newly developed technological way of transforming wet cassava peels into high quality, safe and hygienic feed ingredients within eight hours. We produce one tonne of cassava feed from three tonnes of the wet peels. How we do this is that we basically use the same equipment that you use when you are producing gari; it is the same process.
We get the peels from people in the rural areas who harvest the cassava. We inform them that OK, once you harvest, you should let us know. We go there and pick up the wet peels, that is, the fresh peel. Then we take the peel to our factory. At the factory, we separate it into categories: the big ones, the medium ones and the small ones. After selecting into those categories, we go into grating – we grind it into very small particles. After grating it, we put it through our hydraulic press, which is an automatic press. The work of the hydraulic press is to remove the water content, because you need to ‘dewater’; to go through the process called ‘dewatering’ to remove water content from the peels. After going through the hydraulic press – which takes about a day because you need to do it over and over again – we put it into a sieve.
But once you have grated, you are left with the cake. That cake is called the wet cassava peel cake. The wet cassava peel cake has one week life span because it is not yet fully dry. At that state, it is used to feed sheep, cattle, pigs, goats and other bigger livestock. However, once we go through the process of sieving it to get the smaller particles – because the big ones are the wet ones – we dry it. In the dry season, we simply spread it outside like gari and it will dry in two days. However, in the rainy season, we fry it in a frying pan the same way people fry gari. The good thing about the dry high quality cassava feed is that it has long life span of about five to six months. It is used to feed poultry, fish, sheep, goat and indeed all livestock across the agricultural value chain.
Another good thing about it is that it is exportable. Because it has a long life span, you can export it to many countries. And there is high demand for cassava feed worldwide. Some of the large scale commercial farmers in the UK, US, Germany, Netherlands and France, even in Taiwan, China and other Asian countries, use it a lot for their livestock. In Nigeria, there is a huge local market for it. Our population is growing. There are a lot of people who are into livestock farming. What was mostly used to feed livestock is corn.
But the thing is, because the population is increasing, there is more demand for corn for other things, food and so on. The quantity of corn that was available for livestock is no longer available. The biggest constraint that most livestock farmers in Nigeria have today is that they will tell you that 70 percent of their cost goes into buying feed. But with this innovation, the cost of feed has been drastically reduced. Our feed is much cheaper than corn and the others because we are using materials that people throw away, which is the cassava peel.
Cassava peel has a lot of nutrients: energy, protein, carbohydrates, and is perfect for animal feed. With this innovation, we are hopeful that Africa which presently has an estimated 50 million tonnes of cassava peel waste that can be processed into another 15 million tonnes of animal feed, will become highest producers of animal feed. If this is done in countries that produce lots of cassava like Nigeria, Congo, Ghana, and so on, what will happen is that we can create an industry with a yearly turnover of $2billion. The market is huge. Nigeria, for example, is the largest producer of cassava in the world, but all the peels from this cassava are thrown away.
So, we are trying to change that with this innovation. If we can do this successfully, it would be a great boost to the Nigerian GDP. It will also earn foreign exchange. Because like I said earlier, Nigeria being the largest producer of cassava worldwide, will soon become the largest exporter of cassava feed. Again, this will bring sanity to the environment. If you go to some of these places where they do a lot of cassava farming like Ondo, Edo, all you see are heaps of cassava peels decaying, attracting flies and polluting the environment. By using these peels for such innovation, it is going to have positive impact on the environment.
Again, there are also jobs that would be created. Some of those farmers who are processing gari can earn more money because apart from making gari, the peels can also be sold for money. So, it is also a way of developing the agricultural value chain. It is not enough to just make gari or fufu and throw away the peels. Because cassava is the crop most grown in Nigeria, we are looking at other ways we can add value to it, create jobs and generate income, boost GDP and earn foreign exchange. The product is needed by livestock farmers around the world so Nigeria is missing out on an opportunity. We have comparative advantage here because we are the largest producers of cassava.
How easy has it been accessing the cassava peel considering that these farmers are in isolated villages?
The major challenge is infrastructure. A lot of the time, the people, because of their limited knowledge, do not know that the cassava peels can be used to feed livestock. So, 90 percent of cassava farmers in Nigeria throw away the peels. And these farmers are mostly in the hinterland. To get the peels from them you need to go into the hinterland and because of poor infrastructure – the roads are not good – it is difficult to access some of them.
However, once you are able to access the farms, the peels are readily available. And in a lot of the instances, it is free because they would have thrown it away. So, when they see someone that says he wants to take the peels, many of them are even happy because some of the dump sites are already full and the places are becoming messed up. The major problem is accessing the farms and areas where these farmers are. But as regards dealing with the farmers, getting the products and their availability, they are available in abundance and can easily be gotten.
What about the supply side? How easily can the finished products be sold?
The amazing thing is that demand is much more than supply. The reason is that high quality cassava feed is the cheapest form of animal feed you can get. This is so because the raw materials are available in Nigeria in abundance. If you want to substitute that with maize, maize is almost double the price. Because it is cheaper, when you walk up to a livestock farmer and offer these options, they are happy because you are saving them cost. Like I said earlier, If you talk to most livestock farmers, they will tell you that about 70 percent of their cost go into feeding the animals.
That’s what makes livestock farming less attractive. And that’s what makes meat and fish expensive. The only constraint now is that this technology is not yet widespread. Not many people are into this aspect of the value chain. I believe that as more people get into it, and obviously as demand for feed increases with the population, demand and supply will meet and more people will come into it. As it is, our product is good and cheaper because the raw materials are easily accessible in Nigeria. But we are just getting started.
The reason many people are not into it yet as you said could be lack of awareness. For somebody who wants to go into it, what things would he require?
There are certain things that you must have. First, you need to make sure that you have easy access to the raw material. So, before you buy the equipment or you go and set up a factory, you need to ensure that there are cassava farmers in the area and that you can readily get supply of the cassava peels. The second thing you need to ensure is that you already have a market for it. So, before you start, you should go to poultry farmers, fish farmers and all these livestock farmers and talk to them. Make sure you already have people that will mop up some of your products before you go into it. The good thing about talking to them is that they might give you specifications of how they want it. Like I mentioned earlier, some people supply wet. There is wet cassava feed, which has short life span. It is even cheaper because it doesn’t require drying.
The third thing, which could prove a little difficult, is financing. For you to turn cassava peels into high quality cassava feed, you need the equipment. Most rural farmers in Nigeria don’t have good equipment, that’s why farming is still at the subsistence level. But if government comes in and sets up cassava peel processing centre, where there will be the peeling machine, washing machine, the grating machine, the hydraulic press and the automatic fryer and people can come there with their materials, pay to use the equipment, it will kick-start development in these rural areas.
Right now, when you talk to farmers they will tell you it’s a very good thing but how do they get the equipment. The equipments are not that cheap so government should support entrepreneurs who want to go into this particular field. But at the same time, the local people need to set up small scale processing industry where people can come and pay for using these facilities and they can earn income. Those are the three things: the equipment, the availability of the raw materials and buyers.
How much do these equipments cost? Where can you get them? And for someone who wants to start on his own, how much should he be looking for?
For example, if you want to process 150, 50 kg bags of feed a week, which will give you about 50, 50kg bags of high quality cassava feed, that means that on the average, you are doing between 25 to 30 bags per day, you would need to buy the cassava peeling and washing machine that will do about 5tonnes a day. The machine will cost you up to N1million. Then, you need to also buy cassava grater. We are doing about 150 bags of 50kg per week. A cassava grater that can do about 200kg per hour, will cost about N500,000. Then hydraulic press, most of the time, because we want to do in large quantity, for the quantity we do, we need about five hydraulic presses and each is N100,000. You need to buy a filter – a big one goes for about N180, 000. You can buy two in case one develops fault so you can use the other.
Again, you need to buy an automatic fryer. The reason you need an automatic fryer is that rainy season will come and during the rainy season, you can’t dry it outside. Automatic fryer is about N600,000. So, the total cost of setting up a full factory is about N4.5million. That’s if you want to do about 150 bags per week. But the good thing about it is that if you are able to make that investment you can generate a minimum of about N1.5million in profit per month. So, if the government, for example, gives young people loans to set up, I can guarantee that in four months the person will return the money. The main problem is getting the capital to set up.
But you can also start smaller. You can start from 100 bags, 60 bags or less. Usually, it is sold in 50kg bags, especially when you want to export or sell to big farmers. If you decide to start smaller, in that case, instead of buying five hydraulic pressers, you can buy two. Instead of buying two fryers, you can buy one. That will reduce your cost to about N3million or less.
What about the export market? How easily can you export the product?
Honestly, it’s not very easy to export and that is because, at the beginning, you need to get a lot of licences. And again, a lot of people feel that the suppliers are not trustworthy. One of the major things that people would ask for is the moisture content. It is very important because if it is high, before the product gets to the buyers, or a few months after it gets to them, it will go bad. But once you can give them the required moisture content, they will continue to buy from you. And I will say that this government has tried to make export easier. It is easier to get export license and there is also a lot of awareness about cassava feed.
The good thing about it is that the demand is very high. Demand around the world is increasing, especially from China. So, it is about getting a reliable buyer and meeting their standard and earning their trust. To get the right moisture content, you must grate properly and you must fry it properly. Once you have the right moisture content and you have your export licence, there are lots of middle men and there are a lot of export websites where you can meet buyers. You also have trading platforms like Alibaba so it’s easy to get buyers. All you need to do is to ensure that you meet their requirements for moisture content.
But the thing really is that the demand for the product in Nigeria is very high. So, you might not need to export if you don’t want to. One tonne of high quality cassava feed goes for about N120,000 in the market. Imagine you are doing two tonnes a week, that’s about N240,000 every week. The demand is huge in Nigeria; you can’t even meet local demand, much more export.