AGRO COMMODITIES EXPORT MENTORING SERIES BY HRM ADAKU CHIDUME-OKORO

AGRO COMMODITIES EXPORT MENTORING BY HRM ADAKU CHIDUME OKORO

Fridays, 12-12:30pm

LESSON 1- INTRODUCTION

Good day, ladies and Gentlemen.

Welcome to the ICAN Agribusiness Export Mentoring Forum. We shall be considering an aspect of the agriculture value chain export as a viable business option. Our emphasis shall be on the export of Agricultural commodities.

For guidance, these shall be the forum rules:

– Political or religious issues will not be posted.

– Copy and paste materials are not allowed.

– only discussions on the subject matter of Agro Commodities Export will be entertained.

– Members are allowed to ask questions, seek clarification, and make comments on topics of discussion.

FORMAT:

– There will be bi-weekly tutorials on different stages of agro-export operations (30 mins).

– Questions and answers sessions (10 mins).

– Case study (take-home assignment).

– Real-life/field applications. Etc. (in class).

It is my wish that at least 4-5 Agric commodities exporters will emerge from this class.

A BRIEF OVERVIEW OF THE MENTOR’S BACKGROUND

Adaku Chilaka Chidume-Okoro, HRM is an entrepreneur who has distinguished herself in the area of Agricultural commodities Export since 2000 She has flown Nigeria’s flags at International Trade Fairs & Exhibitions in various countries, including London, Frankfurt, Netherlands, USA, France, Mexico etc. With the divine gift of making something out of nothing and based on her company’s consistent export deliveries to over five continents of the world, she was recognized and given a Presidential Award in 2010 as NIGERIAN’s WOMAN EXPORTER OF THE YEAR (Non-Oil Exports).

She currently serves as the Group Managing Director of GACON Ltd, a well-established family business in Nigeria’s agro-export sector. Founded in 1999, GACON Limited began as a commodity aggregator, supplying goods to exporters, and later expanded into commodity exports. The company specializes in exporting a wide range of agricultural commodities, spices, herbs, and botanicals to several countries of the world.

GACON Limited’s flagship products include Dried split ginger, Dried split turmeric, Dried hibiscus flowers (both full flowers and siftings), various grades of Gum Arabic, Hot chili pepper, Cassia Tora seeds, Dried kola nuts, and more.

Under her visionary leadership, GACON Limited has cultivated a global customer base, partnering with reputable manufacturing, processing, and trading companies in countries such as the United States, the United Kingdom, Germany, the Netherlands, Bulgaria, Russia, India, Nicaragua, Honduras, Costa Rica, Mexico, Poland, France, Argentina, China, Japan, El Salvador, Chile, Israel, and Italy.

Beyond her professional achievements, she is a dedicated wife, mother and grandmother. She extends her nurturing virtues to all those connected to her, including her staff, subjects, and acquaintances.

Thank you.

LESSON 2: EXPORT MARKET IDENTIFICATION

Understanding Export Market Identification

When engaging in export activities, it is essential to recognize that your target market exists beyond the geographical boundaries of Nigeria. Therefore, a comprehensive understanding of the market’s location, size, scope, needs, and requirements for penetration is necessary. As a new entrant into the export business, it is crucial to differentiate between Primary Target Countries and Secondary Target Countries to develop a structured market approach.

Primary vs. Secondary Target Countries

Primary Target Countries are the main export destinations that have a high demand for your product, favorable trade policies, established market infrastructure, and easier regulatory compliance. These countries usually offer a highe r probability of success with minimal barriers to entry. Factors to consider when selecting primary target countries include:

Strong demand for the product
Favorable trade agreements and low tariffs
Existing trade relations with Nigeria
Competitive pricing opportunities
Established distribution channels

Secondary Target Countries are potential markets that may require more effort to penetrate due to factors such as regulatory barriers, lower demand, or higher competition. These markets may serve as expansion opportunities after success in primary markets. Considerations for secondary target countries include:

Emerging market potential
Higher entry barriers such as tariffs and import restrictions
Niche demand for specialized products
Competitive landscape requiring strategic market entry

Key Preparatory Steps for Export Success

Before initiating export operations, ensure that the following fundamental elements are in place:

Selection of Products/Services for Export: Choose products with minimal risk to safeguard your investment. As a beginner, prioritize low-risk, high-demand commodities.
Export Licensing (If required): Obtain necessary export licenses from the relevant authorities, such as the Nigerian Export Promotion Council (NEPC).
Human Resource Considerations: Assess whether additional personnel are required for procurement, documentation, shipment coordination, and market penetration.
Outsourcing Essential Services: Evaluate the necessity of engaging external service providers, such as logistics companies, forwarding agents, and suppliers, to optimize operations and manage capital expenditure effectively.
Product Knowledge: Develop a deep understanding of the product’s classification, grading, seasonal availability, and competitive landscape.
Market Research & Analysis: Gather historical and projected market data to assess the feasibility of the export venture. Investigate past traders in the commodity, their experiences, market performance, and potential opportunities for new entrants.

Actionable Steps for Market Entry

To ensure successful market penetration, the following strategic actions should be taken:

Identifying, Evaluating, and Selecting Target Markets: Determine the best mode of transportation—air, sea, or road—to optimize efficiency and cost-effectiveness.
Product Selection: Choose products based on market demand and sustainability.
Pricing Strategy: Develop a pricing model that factors in all costs, including markup, logistics, and freight charges, ensuring competitiveness.
Distribution Strategy: Decide between direct marketing and agency representation, each with its own advantages and challenges.
Sales Forecasting & Financial Planning: Establish sales goals, profit projections, and a loss mitigation strategy. Avoid overpricing, as some commodities are more affordable in international markets than in local ones.
Freight & Logistics Considerations: Ensure that all shipping costs are incorporated into your pricing unless the contract specifies otherwise.

Additional Market Development Initiatives

To expand your market presence, consider the following strategies:

Marketing Materials: Develop brochures, flyers, and calendars to enhance brand visibility.
Direct Engagement: Utilize personal networks and internet searches to identify potential buyers.
Overseas Market Exploration: Travel abroad to establish direct market connections.
Digital Presence: Develop a professional website and leverage product hosting platforms.
Trade Shows & Exhibitions: Participate in industry trade fairs to showcase products and network with stakeholders.
Indirect Marketing Approaches: Employ diverse marketing tactics to enhance brand penetration.

Implementation & Performance Monitoring

To ensure alignment with your business objectives, establish a structured implementation schedule, including:

Consistent Follow-Up: Maintain active communication with potential buyers and stakeholders.
Periodic Operational Reviews: Measure actual results against planned objectives.
Progress Assessment: Regularly evaluate achievements to refine strategies and enhance performance.

It is recommended that we utilize our spatial awareness in learning, enabling us to translate lessons into practical applications and implement necessary actions.

Case Study for Strategic Decision-Making

Scenario: You purchased 60 bags of dried chilli pepper at ₦1,000 per bag six months ago, with the supply stored in your warehouse in Kaura Namoda. Given the current market dynamics, you have the following options:

Sell locally at ₦3,000 per bag, realizing a 200% profit.
Engage the original supplier to deliver the goods to Mr Yakubu, an exporter, at ₦3,500 per bag.
Transport the goods via truck to Lagos and sell to Mr Yakasi, an exporter, at ₦5,000 per bag.
Export to Cotonou, leveraging international opportunities.
Retain the goods in storage and await divine intervention.

Discussion Question:
Which option best aligns with your export ambitions? Justify your decision.

HRM ADAKU CHILAKA CHIDUME-OKORO
Agricultural Commodities Export Mentoring Series