A Marketing Proposal

1. THE
GOLDEN
GOOSE
PLAN
G R O U P W A N I N C .
D A T E
1 1 A P R I L 2 0 1 8
S U P E R V I S E D B Y
P R O F . A B I G A I L O G W E Z Z Y - N D I S I K A
S H A I B U H U S S E I N I ( P H . D )
M A R K E T I N G N I G E R I A
T H R O U G H C O T T O N

2. Nigeria is a key regional player in West Africa, with approximately 184
million inhabitants, Nigeria accounts for 47 percent of West Africa’s
population, and has one of the largest population of youth in the world.
A federation that consists of 36 autonomous states, Nigeria is a multi-
ethnic and culturally diverse society. With an abundance of resources,
it is Africa’s biggest oil exporter, and has the largest natural gas
reserves on the continent.
Nigeria shares land borders with the Republic of Benin in the west, Chad
and Cameroon in the east, and Niger in the north. Its coast lies on the
Gulf of Guinea in the south and it borders Lake Chad to the northeast.
Noted geographical features in Nigeria include the Adamawa highlands,
Mambilla Plateau, Jos Plateau, Obudu Plateau, the Niger River, River
Benue and Niger Delta. Nigeria is found in the Tropics, where the
climate is seasonally damp and very humid. Nigeria is affected by four
climate types; these climate types are distinguishable, as one moves
from the southern part of Nigeria to the northern part of Nigeria
through Nigeria's middle belt
The fifth consecutive national elections held in 2015 marked the first
time in Nigeria’s history that it saw a peaceful transfer of power
between two political parties. The current administration, led by
President Muhammadu Buhari, identifies fighting corruption, increasing
security, tackling unemployment, diversifying the economy, enhancing
climate resilience, and boosting the living standards of Nigerians as
main policy priorities. Nigeria’s federated structure gives significant
autonomy to states.
Nigeria's natural resources include but are not limited to petroleum, tin,
columbite, iron ore, coal, limestone, lead, zinc, natural gas, hydropower,
and arable land.
OVERVIEW OF
NIGERIA

3. W O R L D B A N K E V A L U A T I O N
A N D
F O R E C A S T O N N I G E R I A N
E C O N O M Y
Between 2006 and 2016, Nigeria’s
GDP grew at an average rate of 5.7
percent per year, as volatile oil
prices drove growth to a high of 8
percent in 2006 and to a low of -1.5
percent in 2016. While Nigeria’s
economy has performed much
better in recent years than it did
during previous boom-bust oil-
price cycles, such as in the late
1970s or mid-1980s, oil prices
continue to dominate the country’s
growth pattern.
Moreover, the volatility of
Nigeria’s growth continues to
impose substantial welfare costs on
Nigerian households. The onset of
the oil price shock in mid-2014
confronted the government with
the pivotal challenge of building an
institutional and policy framework
capable of managing the volatility
of the oil sector and supporting the
sustained growth of the non-oil
economy.
After contracting for five
consecutive quarters, the economy
has returned to growth in the
second quarter of 2017. With a
renewed focus on economic
diversification, promoting growth
in the private sector and driving
job growth, GDP grew by 0.6
percent (year-on-year) in the
second quarter of 2017, driven by
recovering oil production and
some recovery in non-oil
industries, too, and modest growth
in agriculture.
Economic growth is expected to
have remained positive in the
second half of 2017, averaging
about 1.0 percent for 2017; driven
by the continued recovery of oil
production, sustained growth in
agriculture, and the positive impact
on investment and other private
sector activities from the improved
availability of foreign exchange to
support imports.
As the government begins to
implement the structural reforms
outlined in its Economic Recovery
and Growth Plan 2017–2020,
growth can be expected to
strengthen further in the medium
term, reaching about 2.8 percent by
2019.

4. SITUATION ANALYSIS
A LOOK AT THIS ISSUE:
OPEN HOUSE IDEAS - 3
NEW ADS - 3
After recovering from an economic recession that lasted two
years, Nigerian government needs ways to make the economy
stable and productive. In that case, all sectors of the Nigerian
economy are being promoted to effectively and efficiently
contribute its part to the economic development. Since Nigeria
is known to be endowed with crude oil and agricultural
products such as cocoa, cotton, groundnut, rubber, etc. It is
expedient for promotional plan to convince investors, especially
foreign prospects to be designed.
The Nigerian economy has always been dependent on oil as its
main source of revenue and although it worked in the past
years, the steady decline in the price of oil has affected the
economy. Therefore, there is an urgent need to refocus our
attention to other sectors that have proven and has the
potential to boost the economy. On this note the agricultural
sector has proven to be effective and efficient in improving the
Nigerian economy will be he reviving industry of the economy.
As much as we would love to promote the agricultural sector,
there is a need to streamline the sector into cash crops and
others. Since we are asking for foreign investors, cash crop
seems have potential to draw foreign investors as well as
Nigerians in diaspora to invest in the country especially those in
the agro-business.
Since cocoa, rubber and groundnut are enjoying a very good
exposure in both the local and international market and with
many of their merchants enjoying a return in investments, there
is a need to promote a trending industry that can in few years
enjoy the number one status.

5. SITUATION ANALYSIS (CONT'D)
A LOOK AT THIS ISSUE:
OPEN HOUSE IDEAS - 3
NEW ADS - 3
The Economic Recovery and Growth Plan (ERGP), a Medium Term Plan for 2017 –
2020, builds on the SIP and has been developed for the purpose of restoring
economic growth while leveraging the ingenuity and resilience of the Nigerian
people – the nation’s most priceless assets. It is also articulated with the
understanding that the role of government in the 21st century must evolve from
that of being an omnibus provider of citizens’ needs into a force for eliminating
the bottlenecks that impede innovation and market based solutions. The Plan also
recognises the need to leverage Science, Technology and Innovation (STI) and
build a knowledge-based economy. The ERGP is also consistent with the
aspirations of the Sustainable Development Goals (SDGs) given that the initiatives
address its three dimensions of economic, social and environmental sustainability
issues.
After more than a decade of economic growth, the sharp and continuous decline
in crude oil prices since mid-2014, along with a failure to diversify the sources of
revenue and foreign exchange in the economy, led to a recession in the second
quarter of 2016. The challenges in the oil sector, including sabotage of oil export
terminals in the Niger Delta, negatively impacted government revenue and export
earnings, as well as the fiscal capacity to prevent the economy from contracting.
The capacity of government spending was equally constrained by lack of fiscal
buffers to absorb the shock, as well as leakages of public resources due to
corruption and inefficient spending in the recent past.
The current administration recognizes that the economy is likely to remain on a
path of steady and steep decline if nothing is done to change the trajectory. It is in
this context that since inception in May 2015, Government has made several efforts
aimed at tackling these challenges and changing the national economic trajectory
in a fundamental way. The earliest action was the prioritization of three policy
goals: tackling corruption, improving security and re-building the economy.
Consequently, the Strategic Implementation Plan (SIP) for the 2016 Budget of
Change was developed as a short-term intervention for this purpose. Visible
successes and achievements have been recorded. However, it is recognized that
more needs to be done to propel the country towards sustainable accelerated
development.

6. WHY COTTON?
Cotton is also a heavily traded agricultural
commodity. Nearly 170 countries were
involved in the export or import of cotton in
2000. In addition, through the export of
textiles, cotton contributes to broader
national economic growth, because of the
significant multiplier effects deriving from
employment and earnings in the
manufacturing sector. Such contributions
have become increasingly important for
many developing countries because of the
migration of textile manufacturing
industries to them to benefit from relatively
lower cost structures.
Cotton is produced for various purposes. It
may meet the basic consumption needs of
farm families; it may be exported to earn
foreign exchange, or it may provide the raw
material for textile production for domestic
markets or for export. At the household
level, cotton is an important cash crop for
millions of farmers worldwide, and the
income which it generates contributes to
rural household food security, especially in
developing countries.
Although the importance of cotton is widely
known, I would like to take this opportunity
to outline a few salient features regarding its
economic significance in developing
countries. These are mainly of an indicative
nature, but they serve to underline the very
important role that production and trade of
cotton can have for developing countries
and for the well-being of large parts of their
population.
C O T T O N A N D T H E
W O R L D B U S I N E S S
1. Revenue contributions
(a) Contribution to agriculture and economy
In 2000, world cotton production amounted
to 19 million tonnes. Although growth was
rather slow during the 1990s, production
continued its upward trend during the
decade. Based on average export unit values,
the value of world cotton output in 2000 was
estimated at US$26.6 billion. In many
instances, the importance of the agricultural
sector in terms of its share of GDP has
declined with economic growth. However, for
developing countries, agriculture is still the key
sector on which large parts of the population
are dependent. And for some of these
countries, cotton accounts for a significant
share of agricultural production. Among all
cotton-producing countries in the world, there
were 16 which had a share of cotton
production (valued at export unit values
relative to GDP) above 1 percent in 2000. Of
these, Uzbekistan, Tajikistan, Benin and the
Syrian Arab Republic had the highest ratios,
ranging from 8 to 12 percent.
(b) Contribution to agricultural export revenue
Cotton is one of the important commodities
traded in the world market, both in terms of
volumes and value. In 2000, there were over
100 countries exporting cotton, of which 85
were developing countries. World export
revenue from cotton was US$7.1 billion in
2000. This was nearly 2 percent of the value of
global export revenues from all agricultural
products, excluding forestry, fisheries and
semi-processed products. By individual
product groups, the export revenue from
cotton was the6th largest following oil and
fats, wheat, oilseeds, bovine meat and maize.
C O T T O N
C O N T R I B U T I O N T O
W O R L D B U S I N E S S

7. WHY COTTON?
3. Food security contribution
Cotton production contributes to food
security in several ways. At the national level,
export revenue makes it possible for a
country to access food through imports.
When cotton export revenue is the major
source of foreign exchange, its contribution
to food security is obviously of primary
importance. At the rural household level, the
contribution of cotton production to food
security is mainly through income. When
households are specialized in cotton
production, there is a direct link between
cotton production and their ability to buy
basic foodstuffs and other goods. For the
diversified small farms, cotton is an
important cash crop. Cash income is needed
by rural households to acquire healthcare,
more nutritious foods such as meat, milk,
fruits and vegetables, clothing, housing and
many other services.
(c) Contribution to food imports
Food import bills of developing countries
have been rising steadily, reflecting both
higher consumption levels related to
income and population growth, but also in
many cases the need to supplement slow-
growing domestic food production
through greater imports. If trade flows are
based on comparative advantage rather
than limitations to diversification caused
by technological or policy constraints, the
use of resources to produce export
commodities rather than food for the
domestic market should yield net benefits.
(d) Indirect contributions
In addition to the direct impact of fibre
exports, cotton is one of the basic
materials for textiles, an increasingly
important export sector for many
developing countries. As shown in Table 4,
global export revenues from textiles and
clothing in 1999 were US$148 billion and
US$186 billion, respectively, or roughly 6.0
percent of the value of world total
merchandise trade. Developing countries
accounted for more than 75 percent of
both categories of exports.
2. Employment contribution
Although it is well-known that cotton
production contributes to employment,
especially in developing countries, it is
difficult to obtain numbers of farmers
employed. For instance, in countries such
as the United States cotton farmers invest
heavily in machinery to work their large
farms. In developing countries, cotton is
typically produced on small farms with the
intensive use of labour. Thus, with 5.3
million hectares planted to cotton in 2000,
the United States had some 31 500 farms
engaged in cultivation, while there were
around 40 million small farms engaged in
cotton production in China on a planted
area of about 4.2 million hectares. Farms in
the United States are large and highly
mechanized while small farms in China, as
in other developing countries, rely on
labour.

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Cotton as a major cash crop is of considerable social and economic
importance to Nigeria. Cotton/textile activities are widespread in the
country. Cotton production in Nigeria dates to 1903 with the British
Cotton Growers Association taking the lead until 1974, when it was
disbanded and replaced by the Cotton Marketing Board to develop,
gin and market the produce. Following the deregulation of the
Nigerian economy in 1986, the Board was abolished vis-à-vis the
economic activities rendered by it. The Cotton Consultative
Committee (CCC) was set up in an advisory capacity to the public
sector, while a cotton revolving fund scheme with a management
Committee (CRFMC) was put in place to ensure the sustainable
supply of certified cottonseed to farmers. In 2005, the Cotton
Development Committee was established which subsumed both the
CCC and the CRFMC, to address the cotton economy in a holistic
manner.
On annual basis, area under cotton cultivation is about 0.2-0.6
million hectares, largely in the Savannah areas of the country.
Production depends on various factors ranging from vagaries of
weather, cotton price, problems of the textile industries, etc. In
2005-2006, about 232,675 hectares were cultivated to produce about
300,000 tons of seed cotton or 110,000 tons of lint (about 607,735
bales of cotton lint). The prospect for 2007/2008 is about 400,000
tons of seed cotton from about 0.3million hectares. Production is
mainly in three cotton zones: The Northern zone (60%); Eastern Zone
(30%); and the Southern Zone (10%), respectively. Production is
dominated by small scale farmers, with farm sizes ranging from 3-5
hectares all under rainfed ecologies. Seed cotton yield ranges from
0.6 to 1.5 tons per hectare. About 98% of the crop is grown to
Gossypium hirsutum, while the balance is grown with G. barbadense.
Cotton: The Nigeria
story

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BACKGROUND TO THE NIGERIAN COTTON INDUSTRY
Cotton Industry Indicators
Ginning companies 51
Fully operational ginneries 17
Ginning capacity utilization 33%
Seed cotton production (2016/2017) 3,000, 000 tons
Lint production 110,000 tons
Seed production 1,800,000 tons
Value of seed cotton produced (Naira) $7 billion
Value of lint produced $8 billion
Value of cotton seed produced $2.5 billion
Cotton farmers 253,000
Cotton farm employees 700,000
Cotton Industry Indicators (2016/17)
Domestic market size (fabric metres) 2,200 million
Domestic market share (fabric metres) 340 million
Domestic market share (%) 30%
Textile companies 41
Gross industry sales (fabric metres) 600 million
Exports (fabric metres) 360 million
Gross industry sales (Naira) N200 billion
Total industry assets (Naira) N87 billion
Industry indebtedness (Naira) N43 billion
Bank lending to industry (Naira) N26 billion
Industry net worth (Naira) N54 billion
Industry return in capital employed 3.1%
Industry return on shareholders’ funds 3.7%
Industry profit margin 3.1%
Industry capacity utilization (of mills operating) 67%
Employees 67,000

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Cotton and Nigeria means what are the industries in Nigerian that need
the boom in the cotton industry. The following helps to project the
number of end users of cotton within Nigeria.
• It is used in the manufacture of materials such as jersey, velour, velvet
and flannel. These materials are later used in textile industry to produce
T-shirts, underwear, jeans, towels, and bed sheets.
• It is used in the medical industry for the manufacture of bandages,
cotton swabs and tents.
• Cotton oil extracted from the seed is used as vegetable oil in the
human diet
• Cotton oil is used in the industry of food (as an ingredient of
margarine) and in the cosmetic and pharmaceutical industry.
• It is also used in the production of rubber and plastic.
Cotton and Nigeria
The annual global output of textile firms is estimated at over $400 billion, half
of which comes from China. A variety of fabrics are used by different regions
and cultures. The most popular fabric type among sub-Saharan Africans is the
African print fabric. This fabric is an integral part of African culture with annual
sales volume of 2.1 billion yards at average production cost of $2.6 billion and
retail value of $4 billion.
China and India account for 60 per cent and 21 per cent respectively of African
print fabric production. On the consumption side, West Africa accounts for 65
per cent of the market with Nigeria accounting for 38 per cent of total demand
for African print fabric.
Cotton and the Nigerian Textile
Industry

11. This seems unlikely given that local textile firms have failed to thrive during the
influx of foreign textile. But a close look at the cost determinants shows that
Nigeria does have a competitive edge in textile manufacturing over the largest
textile producers in the world.
The failure of the Nigerian textile industry to compete with exports is largely due
to its inability to make use of the country’s unique advantages in lowering its
production cost.
Nigeria is a highly populated low-income country with available and cheap
labour but today textile manufacturing requires far less unskilled labour due to
increased automation. Highly skilled labour, able to coordinate automated
processes in manufacturing, is increasingly on demand. The high cost of power
in Nigeria is a major reason for the poor competitiveness of the industrial sector.
Cotton is the raw textile used in manufacturing Africa print fabric and it is the
largest contributor to production cost making up about 40 per cent of total cost
of production. Interestingly, it turns out that a textile mill in West Africa has a
huge advantage in terms of the availability and price of cotton. West Africa is the
fifth largest producer of cotton globally with several of its members having an
economy dependent on cotton production.
Also significant is that average cotton prices in West Africa is less than half the
price of cotton in the U.S, China and India – the three biggest producers of
cotton. This is large because cotton production in Africa is by small-scale
farmers who sell their cotton to just one or two large trading firms, a situation
that gives the firms a leeway in setting prices for cotton.
In Burkina-Faso, the region’s largest producer, over 80 per cent of the
population are cotton farmers who sell their produce to a monopoly trading firm
for exports. Textile firms operating in West Africa have benefited from this
situation by obtaining cotton at very low prices.
Nigeria Comparative Advantage in Textile
Manufacturing

12. From the assessment of Nigeria’s relative position in labour, power and raw materials
as cost factors in textile manufacturing, one can conclude that Nigeria has a good
competitive edge. The problem is with the industry’s inability to utilize this advantage.
This may not be unrelated to the difficulty and high cost of financing in Nigeria. The
second biggest contributor to cost in textile manufacturing is capital cost accounting for
as much as 25 per cent of total cost in some major producing countries. In terms of the
ease and cost of loans to industry, Nigeria lags competing countries. This has
discouraged capital investment by textile firms in who are missing out on the latest
advances in manufacturing technology used by their competitors to lower cost and
improve quality.
In 2009 the government set up a 100-billion-naira textile and garment intervention
fund, disbursed at 6 per cent interest rate to textile firms in Nigeria. Six years later and
with the disbursement of over 60 per cent of the funds, its achievements are at best
modest. The beneficiaries spent little on capital investments like replacing old
machinery and switching from diesel to gas plants. They simply refinanced their
outstanding loans, which helped cut their interest rate cost. While this has helped keep
some of these firms afloat, potentials in textile manufacturing remain very much
unrealised.
One important way integrated textile firms can reduce cost is by improving efficiency,
which can be done by looking for ways to turn waste from one production process into
useful input at another production level. One such way textile firms can enhance
production efficiency is by making use of a natural gas plant with co-generation
technology, ideal for manufacturing processes that require both electrical and thermal
energy.
Conventional gas plants are about 40 per cent efficient generating heat as the by-
product of gas combustion. This waste heat can be re-used in a production process
requiring heat which in textile manufacturing is the dyeing and finishing level of
production.Co-generation in integrated textile production can yield energy efficiency
rates of up to 90 per cent making it possible to carry out thermal energy intensive
processes with no additional power cost which would reduce power cost by up to 50
per cent.
The African print market is favourably structured for a textile firm seeking to improve its
margins by getting involved in the distribution and selling of its product.

13. Cotton used to be one of the major products of export in Nigeria. In fact, it was
responsible for 25% of the country’s GDP until crude oil was discovered.
Currently, cotton accounts for a paltry 5% of the nation’s GDP. Cotton can be
grown in 24 states across the nation.
Our objective is to increase the annual revenue gotten from the production of
the cotton plant. With the right investment, we will be able to not only increase
the production of the cotton but also increase the demand for cotton. The cotton
plant will be harvested and processed with the use of cutting edge technology
and high-end manufacturing equipment.
The aims and objectives of embarking on this campaign is to:
� Make foreign investors invest in cotton farming, production, and the textile
industry which will provide an increase revenue, gainful employment and project
Nigeria as a producing country thereby making the country a mantra for
investors in Africa.
� To reduce the massive smuggling of apparels/ clothing from China, India and
countries through the provision of quality local materials which will variably
reduce the amount spent on foreign exchange.
� Diversification of the cotton industry especially boosting other sectors such as
fashion, medicine, cosmetic and pharmaceutical.
� To promote the Made in Nigeria initiative; showing what Nigerians are
capable of financial independence with the right investments.
M A R K E T I N G
OBJECTIVES

14. TARGETS AUDIENCE ANALYSIS
/ JUSTIFICATION
The United Kingdom is made up of England, Scotland, Wales and
Northern Ireland, is an island nation in north-western Europe.
Her capital, London, is regarded as an influential centre of
finance and culture globally.
The economy of the United Kingdom is highly developed and
market-oriented. It is the Sixth-largest national economy in the
world measured by nominal gross domestic product (GDP),
ninth-largest measured by purchasing power parity (PPP), and
nineteenth-largest measured by GDP per capita, comprising
3.9% of world GDP. It is the second-largest economy in the
European Union by both metrics.
Its pharmaceutical industry, the tenth-largest in the world, plays
an important role in the economy. Of the world's 500 largest
companies, 26 are headquartered in the UK. The economy is
boosted by North Sea oil and gas production; its reserves were
estimated at 2.8 billion barrels in 2016, although it has been a net
importer of oil since 2005. There are significant regional
variations in prosperity, with South East England and North East
Scotland being the richest areas per capita. The size of London's
economy makes it one of the largest cities by GDP in Europe.
A country with a large GDP ($2.565 trillion) and low investment
in agriculture probably due to lack of arable land, will likely want
to invest in Nigeria especially in agriculture and mostly
specifically in cash crop like cotton.
T H E U N I T E D
K I N G D O M

15. Turkey officially the Republic of Turkey is a transcontinental country
in Eurasia, mainly in Anatolia in Western Asia, with a smaller portion
on the Balkan peninsula in Southeast Europe. Turkey is bordered by
eight countries with Greece and Bulgaria to the northwest; Georgia to
the northeast; Armenia, the Azerbaijan and Iran to the east; and Iraq
and Syria to the south. The economy of Turkey is defined as an
emerging market economy by the IMF. Turkey is also defined by
economists and political scientists as one of the world's newly
industrialized countries. Turkey has the world's 17th-largest nominal
GDP, and 13th-largest GDP by PPP. The country is among the world's
leading producers of agricultural products; textiles; motor vehicles,
ships and other transportation equipment; construction materials;
consumer electronics and home appliances.
The clothing and textile industry is largely based on cotton. Domestic
output does not fully meet demand, which makes Turkey the world's
third-largest cotton importer after China and Bangladesh.
Clothing and textiles is among the largest and best-performing
sectors of the Turkish economy, accounting for around 7% of the
country's GDP. There are some 56,000 textile and clothing companies
operating in the country and they employ around two million people.
In 2013, Turkey ranked 8th and 4th in global cotton production and
consumption, respectively. The country ranked third in organic
cotton production after India and Syria.
Domestic output does not fully meet demand, which makes Turkey
the world's third-largest cotton importer after China and Bangladesh.
Clothing and textiles accounted for nearly 20% of Turkey's total
exports by volume in 2013.The Turkish clothing industry was the 3rd
largest exporter to the European Union and the 6th largest globally in
2013.
With this and Turkey’s GDP being $657.7 billion, there are likely to be
investors that will likely chose Nigeria as an investment destination.
T H E R E P U B L I C O F
T U R K E Y