Shea Butter Commercial Production

SHEA BUTTER with botanical name Vitellaria paradoxa, commonly known as shea tree produces an edible fruit that is the source of one of Africa’s most ancient food oils. Shea trees are indigenous to semi-arid and sub-humid savannas of sub-Saharan Africa (SSA), occurring on nearly 1 million km²among 18 African countries. Currently, shea butter, the main product of this tree, is sold on local, domestic and international markets for baking, confectionery, cosmetic and pharmaceutical purposes. In contrast to other important regional cash crops such as cotton and cashew, shea tree production benefit from few integrated development efforts that represent meaningful investments in improving management practices; furthermore, involvement in the shea industry has been concentrated almost exclusively on improving processing and marketing. As a result, despite seven centuries of commercial shea butter trade in areas beyond its geographic distribution, it essentially remains a semi-domesticated resource.

Research has shown that the Shea tree can start yielding its fruit after 7 years of planting compare to the initial 20 years. The research has also resolved the long dormancy of the shea nut after it is planted. Shea tree usually grows to an average height of about 15 meters and girths of about 175 meters with profuse branches and a thick waxy and deeply fissured bark that makes it fire resistant. The shea tree grows naturally in the wild in the dry Savannah belt of West Africa from Senegal in the west to Sudan in the east, and onto the foothills of the Ethiopian highlands.It occurs in 19 countries across the African continent, namely Benin, Ghana, Chad, Burkina Faso, Cameroon, Central African Republic, Ethiopia, Guinea Bissau, Cote D’Ivoire, Mali, Niger, Nigeria, Senegal, Sierra Leone, Sudan, Togo Uganda, Zaire and Guinea. The shea tree has no capacity for vegetative regeneration, and therefore, can only be propagated through its seed

The good news is that with the breakthrough in the gestation period of the shea tree it can be commercialized now and while it is planted the land can be intercropped to defray cost of the waiting and the intercropping can continue even when the shea tree has started yielding fruits

Shea butter is a fat extracted from the nut of the African shea tree (Vitellaria paradoxa). It is usually yellow in color when raw, with Unrefined, Refined, and Ultra-Refined Shea butter being ivory or white in color. Shea butter is a triglyceride (fat) derived mainly from stearic acid and oleic acid. It is widely used in cosmetics as a moisturizer, salve or lotion. Shea butter is edible and is used in food preparation in some African countries. Occasionally, the chocolate industry uses shea butter mixed with other oils as a substitute for cocoa butter, although the taste is noticeably different. The shea tree is a traditional African food plant. It has been claimed to have potential to improve nutrition.

USES

Shea butter has many uses and may or may not be refined. In the West it is mostly used for cosmetics as emollient. Throughout Africa it is used extensively for food, is a major source of dietary fat, and for medicinal purposes.

Shea butter is mainly used in the cosmetics industry for skin- and hair-related products (lip gloss, skin moisturizer creams and emulsions, and hair conditioners for dry and brittle hair). It is also used by soap makers, typically in small amounts (5–7% of the oils in the recipe), because it has plenty of unsaponifiables, and higher amounts result in softer soaps that have less cleaning abilities. Some artisan soap makers use shea butter in amounts to 25% – with the European Union regulating the maximum use around 28%, but it is rarely the case in commercially produced soap due to its high cost compared to oils like palm oil or pomace (olive oil). It is an excellent emollient for dry skin. No evidence shows it is a cure, but it alleviates the pain associated with tightness and itching.

MEDICINAL PROPERTIES

Shea butter is sometimes used as a base for medicinal ointments. Some of the isolated chemical constituents are reported to have anti-inflammatory, emollient, and humectant properties. Shea butter has been used as a sunblocking lotion and some of its components “have limited capacity to absorb ultraviolet radiation

The tree starts bearing its first fruit when it is 10 to 15 years old; full production is attained when the tree is about 20 to 30 years old. It then produces nuts for up to 200 years.

The fruits resemble large plums and take 4 to 6 months to ripen. The average yield is 15 to 20 kilograms of fresh fruit per tree, with optimum yields up to 45 kilograms. Each kilogram of fruit gives approximately 400 grams of dry seeds.

 

INCENTIVES

• Pioneer Status (tax holiday) granted for 3 years and renewed for the next two years
• 100 percent repatriation of profit net of taxes
• Capital allowance not restricted. Granted in full -100%
• Investment Promotion and Protection Agreement: The IPPA helps to guarantee the safety of investment of the contracting parties in the event of war, revolution, expropriation or nationalization.
• 60% repayment of interest paid by those who borrow from banks under ACGS for the purpose of cassava production and processing.

The major inputs for large scale manufacturing and commercial farming of SHEA TREE are; LAND, FERTILISER, DISEASE AND PEST CONTROL, EQUIPMENT, TRAINING, FINANCE AND MARKET.

 

LAND

Procuring Land for such large scale manufacturing and commercial farming has to be done by a professional who have eagle eye and knowledge of what is required for the successful take off such industry with minimal hindrance. The shea tree also grows very well on a wide range of soils, including highly degraded, arid, semi-arid and rocky soil. A professional can spot this soil type quite easier and with his contact will be able to negotiate the lease or what the investor prefers. BUSINESS ADVISORY NETWORK is a guru in this regard and will help you arrange choice land at the best rate, all you have to do is to talk to us.

 

EQUIPMENT PROCURING

The real money to be made in Shea Nut is not just from commercial farming of it and exporting crude shea butter. The real money will come from processing the shea butter. BAN has a relationship with a network of equipment manufacturers and suppliers. BAN has the expertise to advice on the best way to go about the setting up of the factory and the equipment to buy for effectiveness. It has to be a mix of both cost effectiveness and durability.

 

TRAINING

BAN will help you to train and retrain your staff on how to run a cost effective manufacturing concern.

 

FINANCE

Finance is key to any successful manufacturing and the government is willing to support an investor who has shown capacity and to provide enabling environment for the success of such concern.  There is 200 billion manufacturing intervention fund put in place by the central bank of Nigeria. BAN will help an investor who has met the criteria for accessing the fund to access the fund to support his manufacturing. An investor in this concern will also be able to raise loan from the agri credits .

The central bank of Nigeria has a lot of incentives/ credits for commercial farmers at a reduced interest rate of 9% per annum. Most of these are organized by the central bank of Nigeria although accessed through the commercial bank. BAN will guide you on how to source credit under any of these credits listed below;

 

Agricultural Credit Guarantee Scheme Fund (ACGSF) The Fund guarantees credit facilities extended to farmers by banks up to 75% of the amount in default net of any security realized. The Fund is managed by the Central Bank of Nigeria, through this guarantee it is easy For commercial banks to loan to farmers not fearing

Agricultural Credit Support Scheme (ACSS) ACSS funds are disbursed to farmers and agro-allied entrepreneurs at a single-digit interest rate of 8.0 percent. At the commencement of the project support, banks will grant loans to qualified applicants at 14.0 per cent interest rate. Applicants who pay back their facilities on schedule are to enjoy a rebate of 6.0 per cent, thus reducing the effective rate of interest to be paid by farmers to 8.0 per cent.

 

Commercial Agriculture Credit Scheme (CACS) This credit scheme is specifically targeted to finance the country’s agricultural value chain (production, processing, storage and marketing). The maximum interest rate to the borrower under the scheme shall not exceed 9 per cent, inclusive of all charges.

 

Nigeria Incentive Based Risk Sharing System for Agricultural Lending ( NIRSAL) Risk is the single-most important factor that prevents banks from lending to agriculture. To change banks’ perception that agriculture is a high-risk sector, NIRSAL has a USD300 Million Risk-Sharing Facility that it uses to share their losses on agricultural loans through Credit Risk Guarantees. NIRSAL shares risk with banks ranging from 30% to 75% of face value depending on segment.

 

This also includes a guarantee fee of 1% per annum on outstanding protected principal and interest. Up to 40% of interest cost rebated to select value chain participants every 90 days if loan remains in good standing (no partial or full default). All crops, livestock and related supportive economic activity across the value chain are supported by this facility.

 

MARKET

The market for ethanol in Nigeria is huge and an early investor will also be entitled to the pioneer status incentives. This will help crash his cost and boost sales for such investor. It must be noted that the estimated market potential of ethanol in Nigeria is US$750 MILLION going by the quantum of import of the product in Nigeria. It also important to note that it is only a paltry 2 – 3 percent of the annual consumption of ethanol by Nigeria that is produced in the country. This leaves a gigantic opportunity for an investor.

 

SECURITY

Security of the farm is of utmost importance, thus adequate security must be put in place to eliminate/ reduce pilferage in the farm.

 

 SHEA NUT VALUE CHAIN

We will not only guide you on SHEA TREE farming. We will introduce you to SHEA NUT business value chain depending on your interest.. Even though this requires huge investment, the return is enormous and the market potential is also huge.

If you are desirous of farming with minimal discomfort and also wants to stay out of other losses that might result due to lack of planning talk to us at BAN.