Sheabutter export guide

SHEA BUTTER
A Guide to Production and Marketing

Peace Corps Ghana

Peace Corps Ghana Version 1, March 2008

This manual was developed for Peace Corps Volunteers, by Peace Corps Volunteers,
in an effort to preserve the knowledge we have gained from working with groups at
the producer level, companies who buy and export shea butter, and the various
organizations and government agencies that you may encounter when working with
shea.

• Sarah Brabeck, PCV Fiang Upper West Region (2006-07)
• Michael Fravel, PCV Hian Upper West Region (20006-07)
• Bill Reinecke , PCV Savelugu Northern Region (2006-07)
• Paul Sari, PCV Tamale Northern Region (2006-07)
• Jennifer Schneidman, PCV Nangodi Upper East Region (2006-07)

David McNally
APCD/SED

March 2008

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Table of Contents

1: The Biology of Shea ..................................................................................................4
Where do Shea trees live?..........................................................................................4
Life Cycle...................................................................................................................4
Cultivation and Transplantation.................................................................................5
How to Make Shea Butter..........................................................................................5
A Little Shea Chemistry.............................................................................................6

2: Uses of Shea..............................................................................................................7
Traditional Products7
Other Traditional Uses of Shea butter .......................................................................7
Traditional Non-Butter Uses......................................................................................8
Industrial Uses ...........................................................................................................9

3: The Shea Market......................................................................................................10

4: The Shea Value Chain .............................................................................................11

5: Working at the Producer Level................................................................................12
Group Dynamics ......................................................................................................12
Roles Within a Group ..............................................................................................13
Identifying Your Market ..........................................................................................13
Processing Equipment & Machinery .......................................................................14
Cooperative Registration .........................................................................................14

6. Stories from the Field..............................................................................................16
Shea Butter Extractor’s Women’s Group: Lessons Learned ...................................16
AN EXAMPLE OF COSTING ...............................................................................19
Break-Even Analysis from a UNDP study based near Tamale ...............................20

7: Supporting Actors in the Shea Industry/Contacts....................................................21
NGOs and Companies Involved in the Ghanaian Shea Industry.............................21
Major International Companies in the Shea Industry: .............................................21
Local Buyers in Ghana (Nuts & Butter) ..................................................................21

8. Appendices..............................................................................................................23
Appendix 1. Value-added to selling price of shea butter cosmetics. ......................24
Appendix 2. Ghana Shea SS MAP (from SNV Ghana)..........................................25
Appendix 3. Traditional Shea Processing (adapted from Dr. Peter Lovett). ..........26

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1: The Biology of Shea

Where do Shea trees live?

Ghana is lucky. Ghana and Burkina have the best shea butter in the world. Why?
Because the shea nuts here have the most desirable chemical balance, and the
traditional processing methods create a very clean butter.

The shaded areas depict rainfall values. The small grey dots show areas of shea trees
(Vitellaria paradoxa) in West Africa. The white dots are a different variety of shea
trees in East Africa.

Life Cycle

As deforestation becomes a bigger problem in Ghana, the availability of shea nuts and
butter is directly impacted. Bushfires, cutting of trees for firewood and destructive
farming methods are all factors that affect the availability of shea nuts. Currently,
local people and NGOs are more interested in protecting and cultivating shea trees.
Understanding the life cycle of shea is essential to the survival of the shea butter
business.

The number of years for a tree to reach maturity, and therefore produce fruit, is up for
debate, but it is generally accepted to be 3-5 years. Many people will argue that it
requires 15 or even 20 years to fruit, but ask them how many trees they have planted.
Information on lifespan of shea trees is sparse.

The shea fruit is generally ripe from mid-May through the end of July. There is some
variation due to location and rainfall. The fruit is edible and tasty. Mature nuts come
from fruits that have fallen to the ground, so women will forage for fallen fruit, either

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from the farm or any nearby forest. Butter processing is usually performed from June
through August.

Cultivation and Transplantation

It has not been a common cultural practice to plant shea. Even some areas have strong
taboos against planting shea, but families’ financial needs are beginning to overturn
those beliefs. You can now find many people who are eager to propagate shea. And
here’s how:

The whole process takes time. Usually around 9 months the seedling will be visible
above ground. And after one year, the seedling can be transplanted into the field.
Transplanting should be done during rainy season, so the roots can fully develop
before the dry season.

How to Make Shea Butter*
The shea nut is chock full of so many things- some desirable, some not. So the
harvesting and post-harvest processing affect which of those things, desirable or not,
are in the butter. As quality is the key factor to selling shea butter, it is important to
understand the chemistry behind shea butter. Most women who process shea butter
know all of this practical knowledge, so to learn how to make shea butter, it is best to
go watch these local professionals.

Here is a brief summary of the 12 steps to make shea butter from harvested shea nuts:
*
(see Annex 3 for a more detailed presentation)

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1. Harvest the nuts from the farm
2. Accumulate in piles or pits
3. Heat the nuts – boil (preferred) or roast
4. Dry the whole nuts (if boiled)
5. De-husk the nuts to get kernels (usually cracked by hand!)
6. Dry the kernels & store in a secure place

STOP HERE IF END PRODUCT IS NUTS, FOR BUTTER – CONTINUE
STEPS 7-12

7. Crush the kernels
8. Dry roast the crushed kernels
9. Mill or pounded/grind into a paste
10. Kneaded (water-boiled or pressed) to form an emulsion to separate fats
11. Boil the oil (fat) to dry and clean by decanting to clarify the butter
12. Prepare for use, sale , or storage (cooled oil will congeal into solid
white/cream colored butter)

Typically the ratio of butter to nuts is approximately 3-to-1.

A Little Shea Chemistry

What are the important chemical components in shea Butter?
• Free Fatty Acids
• Peroxides
• Impurities
• Moisture

Free Fatty Acids are undesirable. FFAs cause too much variation in the shea butter,
and makes it difficult for production in factories. How can we insure less FFAs? Time
and heat are both our friends. Producers should select mature nuts instead of unripe
nuts. Women know this, that’s why they forage for fallen ripe fruit instead of picking
them from trees. Heat also denatures FFAs. Boiling is part of the shea butter process,
so it is also important not to under boil the butter. Once again, the women know this.

The downside of boiling is an increase in peroxides. Why are peroxides bad? They
denature the antioxidants, which are the natural protection of shea butter. But don’t
fear, most women know how long to boil the butter so that the FFAs and peroxides
are both minimized.

Impurities such as water, metal, and dirt can be difficult to keep out. Some
precautionary measures include using sealed containers, taking care when grinding,
and filtering butter. A little extra work can go a long way.

Moisture is another enemy. Fungus can easily grow and spoil vast amounts of butter
from just a small amount of moisture. This can be prevented by boiling, storing nuts
in jute sacks instead of fertilizer bags, and not adding water to the finished butter.

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It may seem like a lot of hard work, but in the end it pays off when you see a
container of beautiful creamy, pure shea butter.

2: Uses of Shea
Shea has so many uses that we turned to the experts at Cocoa Research Institute of
Ghana. The following is an excerpt from a case study done in 2002:

The shea nut serves as one of the main sources of livelihood for the rural women and
children who are engaged in its gathering. Shea butter is the main edible oil for the
people of northern Ghana, being the most important source of fatty acids and glycerol
in their diet. It is an unguent for the skin. It also has anti-microbial properties, which
gives it a place in herbal medicine. It is also used in the pharmaceutical and cosmetic
industries as an important raw material and/or a precursor for the manufacture of
soaps, candles, and cosmetics. Shea butter is used as a sedative or anodyne for the
treatment of sprains, dislocations and the relief of minor aches and pains. Other
important uses include its use as an anti-microbial agent for promotion of rapid
healing of wounds, as a pan-releasing agent in bread baking and as a lubricant for
donkey carts. Its by-products, the brown solid that is left after extracting the oil and
the hard protective shell, are used as a water-proofing material on the walls of mud-
buildings to protect them from the eroding forces of the wind and rain. Poor quality
butter is not only applied to earthen walls but also to doors, windows, and even
beehives as a waterproofing agent (Marchand, 1988). In a traditional setting, shea
butter of poor quality is used as an illuminant (or fuel, in lamps or as candles).

Traditional Products

Oil has played an important part in the local economies in west and central sub-
Saharan Africa for centuries. It is reported that the initial traditional roles have not
changed significantly since 1830, when the French explorer Roger Caillie described
them during his trek across West Africa. In Roger Caillie’s own words as reported in
Hall et al., 1996, “the indigenous people trade with it, they eat it and rub their bodies
with it; they also burn it to make light; they assure me that it is a very beneficial
remedy against aches and pains and sores and wounds for which it is applied as an
unguent”. Today the shea tree produces the second most important oil crop in Africa
after oil palm (Poulsen, 1981), but as it grows in areas unsuitable for palm, it takes on
primary importance in West Africa, and in regions where annual precipitation is less
than 1000mm of rainfall. However, it loses popularity in urban areas within these
regions due to the pungent odor it emits, should it become rancid (Ayeh, 1981b).

Other Traditional Uses of Shea butter

As a cosmetic, it is used as a moisturizer, for dressing hair (Dalziel, 1937, Ezema &
Ogujiofor, 1992) and for protection against the weather and sun. It is used as a rub to
relieve rheumatic and joint pains and is applied to activate healing in wounds and in
cases of dislocation, swelling and bruising. It is widely used to treat skin problems

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such as dryness, sunburn, burns, ulcers and dermatitis (Vuillet, 1911; Bonkoungou,
1987) and to massage pregnant women and small children (Marchand, 1988).

Having a high melting point of between (32-45°C) and being close to body
temperature are attributes that make it particularly suitable as a base for ointments and
medicines (Bonkoungou, 1987). It is also used to treat horses internally and externally
for girth galls and other sores. The healing properties of shea butter are believed to be
partly attributable to the presence of allantoin, a substance known to stimulate the
growth of healthy tissue in ulcerous wounds (Wallace-Bruce, 1995). It is used as
“white oil” to anoint the dead in Niger (Castinal, 1945), and is placed in traditional
ritual shrines.

Refuse water from production of shea butter is used as a termite repellent (Dalziel,
1937). In Burkina Faso, shea butter is used to protect against insect (Callosobruchus
maculatus) damage to cowpeas (Vigna sp.). Research has shown that after treatment
with shea butter a reduction occurs in the life span and fertility of the insects and
hence the infestation rate. Shea butter, however, is not as effective as cottonseed or
groundnut oil (Pereira, 1983; Owusu-Manu, 1991).

Traditional Non-Butter Uses

The shea tree is sacred to many ethnic groups and plays an important role in religious
ceremonies (Vuillet, 1911; Millee, 1984).

Flowers, Fruits, and Nuts

Some ethnic groups make the flowers into edible fritters (Chevalier, 1949). The fruit
pulp, being a valuable food source, is also taken for its slightly laxative properties
(Soladoye et al., 1989). Although not widespread, shea nut cake is used for cattle feed
(Salunkhe and Desai, 1986), and also eaten raw by children (Faegri, 1966; Farinu,
1986). The residual meal, as in the case with shea butter, is also used as a
waterproofing agent to repair and mend cracks in the exterior walls of mud huts,
windows, doors and traditional beehives. The sticky black residue, which remains
after the clarification of the butter, is used for filling cracks in hut walls (Greenwood,
1929; Marchand, 1988) and as a substitute for kerosene when lighting firewood
(Wallance-Bruce, 1995). The husks reportedly make a good mulch and fertiliser
(FAO, 1988b), and are also used as fuel on three stone fires.

Foliage

Leaves are used as medicine to treat stomachache in children (Millee, 1984). A
decoction of young leaves is used as a vapor bath for headaches in Ghana. The leaves
in water form a frothy opalescent liquid, with which the patient’s head is bathed. A
leaf decoction is also used as an eye bath (Abbiw, 1990; Louppe, 1994). The leaves
are a source of saponin, which lathers in water and can be used for washing (Abbiw,
1990). When a woman goes into labor, branches may be hung in the doorway of her
hut to protect the newborn baby. Branches may also be used for covering the dead
prior to their burial (Agbahungba & Depommier, 1989).

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Roots

The roots are used as chewing sticks in Nigeria, most commonly in savannah areas
(Isawumi, 1978). Roots and root bark are ground to a paste and taken orally to cure
jaundice (Ampofo, 1983). These are also used for treatment of diarrhoea and
stomachache (Millee, 1984). Mixed with tobacco, the roots are used as a poison by
the Jukun of northern Nigeria. Chronic sores in horses are treated with boiled and
pounded root bark (Dalziel, 1937).

Bark

Infusions of the bark have shown to have selective anti-microbial properties, as being
effective against Sarcina lutha and Staphylococcus mureas but not mycobacterium
phlei (Malcolm & Sofowora, 1969). Macerated with the bark of Ceiba pentandra, and
salt, bark infusions have been used to treat cattle with worms in the Tenda region of
Senegal and Guinea (Ferry et al., 1974). The infusions have been used to treat leprosy
in Guinea Bissau (Dalziel, 1937) and for gastric problems (Booth and Wickens, 1988)
as well as for diarrhoea or dysentery (Soladoye et al., 1989). A bark decoction is used
in the Cote d’Ivoire in baths and therapeutic sitz-baths to facilitate delivery of women
in labour, and is drunk to encourage lactation after delivery (Abbiw, 1990; Soladoye
et al., 1989; Louppe, 1994). However, in northern Nigeria such a concoction is said to
be lethal, (Dalziel, 1937).

A bark infusion is used as an eyewash to neutralise the venom of the spitting cobra
(Soladoye et al 1989) and also, in Ghana, as a footbath to help extract jiggers.
Greenwood (1929) noted that the stripping of bark for medicinal purposes may have a
severe impact on the health of shea trees and may even be fatal. The wood is only
used when individual trees are not valued for butter production. The latex is heated
and mixed with palm oil to make glue (Hall et al., 1996). It is chewed as a gum and
made into balls for children to play with (Louppe, 1994). In Burkina Faso, Bobo
musicians use it to repair cracked drums and punctured drumheads (Millee, 1984). It
contains only 15-25% of carotene and, therefore, is not suitable for the manufacture of
rubber (André, 1947a,b).

Industrial Uses

Research into the properties and potential industrial uses of shea butter began in the
first few decades of the last century. Previously, it was used in edible fats and
margarine, and was only beginning to attract the soap and perfume industry when
interest ceased because of the 2nd World War. Revival of the shea industry after the
war suffered serious setbacks from an insufficient pricing mechanism, logistical
problems of transport (low availability and unpredictable) unable to cope with the
supply of the nuts, thus making the ventures economically non-viable. During the mid
1960s shea trade re-emerged when Japanese traders joined their European
counterparts, which saw a considerable expansion of the industry, particularly in the
cosmetics and confectionery industry barely a decade thereafter.

Shea butter has several industrial applications, but the majority of kernels
(approximately 95%) provide an important raw material for Cocoa Butter Replacers
(CBRs), and are used for manufacturing chocolate and other confectionery. Minor

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uses include cosmetics and pharmaceuticals. The export market for CBRs is shared by
Unilever (UK), Arhus (Denmark), Fuji Itoh and Kaneka-Mitsubishi (Japan).

3: The Shea Market

The Shea Market: Local and International

The local and international shea markets are two very different buyers with the
international market having strict specifications while the local market uses shea
butter for its traditional uses. These two markets are beginning to conflict with each
other as demand forshea butter increases on the international market. As the
international market demand increases, the price of nuts and butter in the local market
increases at the same time. The high demands have made local shea butter and nuts
less affordable on the local market creating an interesting situation for local
consumers and producers.

The Local Market:

The local shea market exists because of the women of Ghana. There are men who
trade in nuts and work in processing but women are the primary pickers, processors
and sellers of shea butter in the local marketplace. The majority of shea butter
consumption in Ghana is in the raw form for cooking and skin care. Some local shea
butter is processed to make soaps that are sold in the market as well. The processors
sell directly to the end consumer in the local market. Very little is packaged, labeled
or certified before sale and it is sold in small balls or bowls in major markets
throughout the country (Northern regions?).

The International Market:

The world’s biggest international markets for shea butter are in Europe and North
America. Shea is used primarily for skin care cosmetics and for medicinal and
cooking products. The industry is extremely competitive and is dominated by about
six large international companies (see section 7). Supply to the major companies on
the international market is typically done by another organization within Ghana that
buys nuts and processes butter to the specifications of the major buyer. These
contracts are very big and have extremely strict quality requirements. Communities
in Ghana generally supply the nuts to local buyers who in turn supply the international
companies with bulked shea nuts or butter. There are also certain organizations
buying shea butter from individual communities but standard quality is a challenge.
Increasingly due to corporate responsability, certain companies like Savannah Fruits
Company, although relatively small, have been working to attain quality commercial
production while supporting rural women’s groups.

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The number one concern for international buyers is “perceived quality” before price.
For edible products the major market is in Europe and India and the butter extraction
and refining is done there. The major cosmetic and soap industry is in the United
States and is known as the most lucrative global shea butter market. The majority of
shea butter consumed internationally is mixed into a finished product containing a
percentage of shea butter. The finished products in North America tend to have high
tech containers and extensive marketing campaigns behind them and are high end
products. Less than ten percent is used by the final consumer in its raw form.

Shea nuts grow in 20 countries in the world, all of which are in Africa. The Export
season is from August to April each year. It is estimated that 150,000 – 200,000
tonnes of nuts are exported each year from West Africa, 50,000 tonnes (approx. 33%)
coming from Ghana alone. The nuts are shipped out of West Africa mainly from
ports in Dakar, Senegal, Lome, Togo and Tema, Ghana.

4: The Shea Value Chain

What’s a Value Chain?

PCVs see shea butter at both extremes. Here in Ghana, we see it in the form of balls
of local butter sold for around GH 0.50. In the US, we saw fancy cosmetic products
sitting on supermarket shelves that sold for around $20. Where is that value added to
the product? Who is making that profit?

It will help to look at the shea butter value chain. A Value Chain includes all those
groups involved at different levels of producing a single product. When considering
shea, the members in a value chain are usually as follows:

Nut Nut Butter Butter Nut and Producers
Producers Traders Producers Traders Butter of Food and
Exporters Cosmetics

Each member of the chain affects the product. Each member also depends on the
other members of the chain for supply and income. A chain is not supposed to be
intra-competitive. Instead, the entire chain functions in union to compete with other
chains (e.g. in other countries/markets). The value of the product is shared along the
chain, meaning each member of the chain receives some income for their work. That
causes the increase in price from local to foreign markets

Strengths and Weaknesses of a Value Chain

Although the members of the Value Chain are not intended to compete, the system is
not perfect. Each member will have needs that counter the needs of other members.

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For example, The butter buyer wants to buy butter at the lowest price. Meanwhile the
butter seller wants to sell at the highest price. Still there are many benefits to a Value
Chain as compared to a traditional business relationship. First, Value Chains provide
for better information sharing among all members. A butter buyer will offer quality
feedback or make packaging requests of the butter seller. The butter seller can ask the
buyer for help with transportation. Also, the Value Chain as a whole is competing
with other chains, so the focus will shift from profit to quality. If the end result is poor
quality butter, consumers won’t be interested and the whole chain will suffer.

As you go up each step of the chain, the level of education, time, and other resources
increases. When deciding where on the Value Chain you want to be, consider the
level of education and resources available to the group. It may not be possible for
your group to export directly to a US company, but maybe you can connect them to a
buyer of shea butter, educate producers on quality standards, provide local producers
with market information, link producers to buyers, or help source funding for a
grinding mill or other equipment to increase production.

In rural villages, price is definitely the most talked about problem. The most
important thing is to account for all costs in the production of the butter and cross
check for profit or loss. Butter buyers complain more about consistency and quality.
At the end of the chain there is a huge factory processing chocolate, and they want all
ingredients to be standardized. And the occasional stick or dead bug may seem like no
big deal to the market women, but L’Oreal will freak out.

5: Working at the Producer Level

Most likely, as a Peace Corps Volunteer, you will be working with Producer Groups.
This section addresses some of the issues to consider when working at this end of the
Value Chain.

Group Dynamics

Most communities have women's groups that form and come together for a
variety of reasons, but most likely for economic support. When considering shea
butter processing as an economic venture, forming establishing a well structured
women's group is imperative. As with any group that aims to be functional and
effective in its capacities, certain roles and responsibilities must first be designated to
rightful people in that group. Having proper knowledge of the personalities and
characters of the group is a great asset in learning who would best assume a particular
leadership role.
Women already have deep relationships with the other women in their communities
and know who the natural leaders of the group are. Sometimes, however, members are
elected to higher positions of the group based on social standing in the community
(for example being the wife of a big man in the community) and not necessarily the

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leadership skills that would designate her as the right person for the position. This is
a delicate issue, but may require attention to ensure the vitality of the group.

Roles Within a Group

Try holding a meeting with interested women in your community and discussing the
roles necessary for group management. When becoming engaged in shea processing
with bigger buyers, groups should have at least the following positions to help
manage the group:

1. A Chairwoman to call and facilitate meetings, communicate current
information, and guide the larger decisions of the group
2. A Vice Chairwoman to assist the Chairwoman and to serve as Acting
Chairwoman in her absence.
3. A Treasurer to collect and record meeting dues and money distribution
amongst the group
4. A Secretary to write minutes, monitor producing groups (if in different
locations), and keep records of the activities of the group.

Identifying Your Market

One of the most important things to do in establishing your group is to identify your
markets. Different markets require different levels of group development, skills and
resources to satisfy the demands for that particular market. For example, some women
come together and produce butter in larger quantities for local markets around their
area striving for a reputation as having better butter quality than their local
competitors. Other groups who have more resources and management knowledge may
gain access to medium size buyers within the region and be able to sell in quantity at
whatever desired quality. Some well developed groups have earned the trust to
contract with larger private companies that might have more strict demands on
quantity at quality with strict deadlines to fulfill orders. What is best is a matter of
opinion and depends on whatever circumstances face your particular group and
processing location.

Assessing your group's capacity is vital to determining your markets. Here are some
key questions to ask:

• What is the level of commitment and seriousness upon your group?
• Is there strong leadership?
• How many available processors are there and what are their time constraints?
• Do your women pick their own nuts during the season or do they buy them
from surrounding communities?
• What level of quality are you capable of producing?

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Processing Equipment & Machinery

Once you have assessed your capacity, you should be able to make some decisions
about the needs of the group in order to serve the market you are targeting. You may
consider acquiring machinery in some cases to speed up the processing, for example.
Machines are expensive, but so are milling charges in many producing areas,
especially smaller villages where people don’t produce commercially and competition
is little. You may want to do a cost/benefit analysis based on the quantity your buyers
are requesting and the price they are offering. Each situation is unique. Machinery
may be beneficial, or it could be an added burden to the group.

Cooperative Registration

Another thing to consider for your group/groups is cooperative registration. Acquiring
the status as a legitimate cooperative offers many benefits. For instance, coop status
qualifies you to receive check ups, monitoring and trainings from the Cooperative
Office in your district. Every district should have a District of Cooperatives Officer
who you can contact and learn about the necessary procedures to apply for coop
status. They can visit and interact with the groups and walk them through the steps
required for registration. Once registered, The District Cooperative Officer will come
periodically or upon request to share new information and opportunities with the
group. They can provide information regarding new loan programs or other forms of
support that the coop may qualify for.

Being listed under the Cooperative Department allows district officers to more easily
identify viable communities in the district and extend the benefits that come their
way. Cooperative registration can also increase the marketability of the group. Several
bigger buyers require or prefer to work with coops, as it denotes a higher level of
organization within the group, creditability and accountability. Coops are a legal
entity of their own. Groups that register as coops also enjoy access to more forms of
support. If you want to apply for a loan to acquire processing machinery or some
working capital, this title will pave your way.

There are some requirements to gain cooperative status. The group has to prove their
creditability by demonstrating solid organization and management skills within their
circle. That requires strong leadership and elected roles, an active bank account (at a
Rural Bank is fine), proof of record keeping from their meetings, histories including
minutes and collected dues, and a registration fee. This fee is a one time up front fee
of 5 new Ghana Cedis (2007) paid to the district office. It puts you in the system and
lines you up for all the perks listed above. In my personal experience, the cooperative
officer in my district has been extremely helpful and responsive to our needs.

Many times, very few of the women you work with are educated or literate.
Developing the necessary management skills is a challenge in such cases, but
organizing training on recordkeeping, financial planning, and small business
management will benefit the group greatly in the long run. Start with inquiring at your
local district assembly on current programs for these trainings. They often have
funding for such things and links to other local organizations who work directly with

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building groups organizational capacity. I have found NBSSI (National Board for
Small Scale Industries), SNV (a Dutch NGO), Technoserve and World Vision, among
others, to be very active players involved with group development.

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6. Stories from the Field
Shea Butter Extractor’s Women’s Group: Lessons Learned

One of my counterparts and I propositioned a private company (we’ll call it ABC
Company) about providing them with high quality shea butter for export to U.S. and
European markets. The owners of the company were out of the country and the
company was in a crunch to fulfill an order. The field assistant agreed to meet with us
about the possibilities of working together. We let the representative know that we
had 30 women ready to make shea butter under their strict quality control guidelines
and within the timeframe needed. The company agreed to test the women’s ability
and quality of butter with a 2,000 kilogram order (that’s 2 tons or 4,000lbs) at a pre-
set price. The women would get half of the money up front and then the rest upon
delivery. The company would provide packaging and pick up the butter from the
village. My counterpart and I figured the costs of production and profit desired and
decided the price the company was willing to pay was worth it.

Everyone seemed happy. The women were especially excited to be a part of a group
(this is an understatement – they were thrilled!). The women were now the Kalpohin
Shea Butter Extractors Association! More importantly, to them, they could tell other
women of their village of 5,000 that they belonged to something. They were so
proud. Note to self – It was time to set expectations to the group that this is a new
venture and we must proceed carefully and with much caution. Who could know if
this was something that would continue? Constant communication would prove to be
key.

As a requirement from the company, my counterpart set up a bank account for the
newly formed women’s group. The bank in turn required GH¢200 to get the account
up and we used the women’s own money. The account was necessary for
transparency purposes for the company and made good sense to the group so they
could easily receive and keep track of monies received and earned. My counterpart
would act as the accountant, manager, and liaison between the group and any outside
buyers for the women since none of the women spoke English.
Once the money was received from ABC Company, the women went right to work.
This was where problems started. Not until after the money was received and the
women were well in to production was the group informed that they needed to
provide their own scale to weigh the butter for packaging. My counterpart tried for
two weeks to find a scale and when he did, the women were nearly done making the
butter. The women even used their own money to buy more nuts to cover the total
amount needed to complete the order. I was unaware they spent their own money to
complete the order, but was impressed at their eagerness to finish the product in the
timeframe requested by the buyer.

Once the scale was in place my counterpart and the women began weighing and
packaging the butter. Everything seemed on track until the ABC Company sent one
of their field assistants out to check the status of the order. When they weighed the
order, it was below the required amount by 25%! We concluded that the scale that the
villagers used was faulty. The second blow was that the women spent all the money

Page 16 of 28


they were given and half of their own money (the money they assumed the company
would reimburse them), but they only produced 1,500kgs of butter. If ABC Company
paid them for only 1,500kgs the women would be at a loss! Oi!

This was a crisis and the owners of the business were still out of country. What
would we do!? We were in limbo for some weeks. I met with my counterpart to go
over all our numbers and costs. We spent hours and hours double checking figures.
Everything seemed fine with our calculations. I met with the women multiple times
to talk with them about the situation. I learned that they had informed others of the
village and that the whole village was on stand-by to see how the ABC Company,
made up of non-Ghanaians, would handle the situation. I’m not sure what the
implications were, but I know that they were not happy and it seemed like bad things
could happen if things weren’t resolved amicably.

After hours of pouring over the cost data I acquired from the company and our own
calculations, it appeared it was really no one’s fault except for a weighing scale’s.
That coupled with low yielding shea nuts (this particular season was now proving to
yield low butter from nuts due to lack of rains).

The good news was the women produced excellent butter in a timely manner. It was
packaged neatly and ready for delivery even before the company was ready to receive
it.

The main lesson learned for me as a facilitator: Nothing Ventured, Nothing Gained
(even if it’s just knowledge). When you go into a new venture, you take chances and
even if you are very careful to reduce your risks, there are still risks. This entire issue
may have been avoided had the company doubled checked the village's scale
measurements upon the first batch of butter made, but would that have been a
reasonable expectation? Perhaps yes, for a newly formed group such as ours,
however, the company was spreading itself thin trying to cover this particular order.
But then again the scale issue was uncommon; why should the company think that a
scale would be off by 25% when it hadn’t happened before? Even if an issue was
detected, this may have meant the order would have been cancelled because the
problem then would lie with the nuts that the women purchased which were yielding
low butter. Then the women would have been left with a bunch of nuts and a
cancelled order.

Communication with my counterpart and the women was important during this entire
process. This is where I feel things went well. I stayed in constant contact with them
through the process and met with them frequently to insure them that we were all in
this together and my counterpart and I were working hard to represent them to this
outside foreign company. I did not want them to think I was conspiring with anyone
to take advantage of them.

Also, my relationship with the company helped smooth things over, as well. I knew
one of the owners and one of the field assistants. We discussed things thoroughly and
we all came to an agreement to chalk this up to no one’s fault, but it would mean a
loss for the company. They graciously agreed to reconcile the initial amount agreed
to be paid to the women without making the women produce more butter, which
would mean a loss to them. I knew this would provide a hit to the company, but

Page 17 of 28


luckily, the company had the vision to see that the right thing to do was take the loss
and move on.

The bad news is that the company will mostly likely not use this group again. While
they are in a village, they are so close to a large town they have to go to markets to
buy nuts, which mean they pay more, and therefore the shea butter costs more. If they
were more remote, they could collect the nuts themselves, cutting out the middleman
(or middlewoman) so to speak.

The good news is the group is not through. We are on hold though, and we have
learned quite a bit in our new experience. There is plenty of demand for shea butter.
My next step is to work with my counterpart on contacting other organizations who
would like to purchase shea butter where production cost is not as much of an issue.
This should not be too difficult.

One more lesson learned is costing the production of the butter to insure the women
receive a fair price. This is not easy. I worked with my women to figure out every
cost in detail. Even when I did this, I later learned there were other costs (hidden
costs). Hidden costs can be a women feeding someone or paying them to assist them.
Or, variable costs; for example, the price of nuts is hard to determine – are they
buying a rounded bowl or flat bowl? Our buyer wanted to price things by bag of shea
nuts, but the women buy in bowls – another potential issue. In addition, in leaner
seasons where there may be less rain, the nuts may yield less butter and you may not
know this until you produce the butter. All these factors need to be taken in to
consideration.

I’m wrapping up my service so I haven’t had time to resolve all these issues. One
thought would be for a firm they work with to purchase the nuts up front and simply
pay the women for their labor and cost of production.

There is big potential for village women to get more involved in the shea butter export
industry. Especially due to the rise of large and small businesses alike wanting to
purchase anything from low quality shea butter to high quality certified organic or
certified fair trade shea butter for use in their products. Don’t underestimate the
demand from small companies willing to pay slightly higher prices for more niche
markets. Opportunities selling shea butter, both in country and to exporters, is
growing rapidly. It’s up to the new wave of PCVs to continue to help improve and
support the women to insure they are truly getting fair prices while giving them the
satisfaction and pride of being a part of a team; helping them improve the lives of
their families; and passing on the shea butter production trade to future generations.

Page 18 of 28


AN EXAMPLE OF COSTING
SHEA BUTTER COST OF PRODUCTION
(Kalophin Shea Butter Extractors Assoc)

Order = 2 TONS (4000 Lbs or 2000 Kgs)
40 WOMEN TOTAL
50 Kgs EACH = 2000 Kgs

Cost breakdown to produce 1 kg of shea butter for a 2000 kg order, as
of 24 July 2007
Cost
Cost Item Cost Per Kg
Assuming 1
bowl nuts = 1
Bowl of shea nuts 7,500.00 7,500.00 kg butter
Firewood 30,000.00 15.00
Milling 30,000.00 15.00
Transportation to
processing point 15,000.00 7.50
DA Tax 1,000.00 0.50

Total Cost 7,538.00

Profit
Profit Item Per Kg Total
Profit For Administrator 50.00 100,000.00
Profit For Women 1,000.00 2,000,000.00
Total Profit Per Woman (40 women) 50,000.00

Total Cost with Profit 8,588.00

Other possible variable:
Packaging
Transportation to Buyer

For those interested in creating shea butter women’s groups, this is an opportunity to
develop the skill set of an administrator and/or help a group of women improve their
lives and their families. Another benefit is that if the group is successful, the younger
women of the village would be more likely to continue with this craft and less likely
to flee the village to head south for what they think are bigger and better
opportunities. The women that leave the village are at a higher risk of prostitution,
becoming pregnant or getting AIDS. Overall this is a very positive opportunity, but
be very aware of what you and the group is embarking on.

Here are a few suggestions and general information;

• Assuming your women’s group do not speak English and/or are uneducated,
you will need to look for someone to handle the management and
administration of the women’s group within the community.

• The administrator should be able to open a bank account, do the accounting
for the income and outflow of money, be able to determine costs in detail to
make sure the group is making money, etc. The administrator should receive a

Page 19 of 28


percentage of the profit (I suggest 5% - 10%). Finally, the administrator
should be trusted by the women and able to communicate effectively with the
women in order to set realistic expectations.

• Be prepared for the unexpected and possible major issue to occur, such as a
possible loss on a particular order.

• If a firm will pay 50% (for example) of the money up front so the women can
get started, monitor if the women are starting to use there own money to
complete the order and how much so they don’t exceed an amount that would
eliminate their profit. Also, monitor what a the nuts are yielding in butter by
weighing them on initial production. You may want to double check the
figures as you continue production.

• 1 rounded market bowl of nuts (a bowl of nuts that are piled above the rim of
the calabash) produces approximately 1 kilogram of butter

• 30 rounded bowls of nuts equals one bag of nuts

• 40 flat bowls of nuts (a bowl of nuts where they level the nuts off to the equal
the rim of the calabash) equals one bag of nuts

• 1 bag of nuts produces approximately 30 kilograms of butter

Be sure to measure and check your local measuring system.

Break-Even Analysis from a UNDP-JICA study near Tamale
(Personal communication via Oliver Hoellige (DED Wa NBSSI Regional Office)

Preliminary findings:
Sagnarigu:
I started the study around May-June this year when price of shea nuts is GHc 20 per
jute bag (between 90-94 kg). Daily wage rate was computed at US$1=GHc 0.92.
Semi-mechanized processing. Yield=40%.
Break-even is GHc 0.97/kg of shea butter.

Walewale:
The same activities were conducted in Walewale (100km further north of Tamale)
around the same time. The price of a jute sack of nuts is GHc 25 per jute bag
(between 92-95 kg). Semi-mechanized processing. Yield=33%.
Break-even is GHc 1.63/kg shea butter.
This higher break-even price might be attributed to transportation costs of firewood,
water, and milling station.

Note: Break-even price for unrefined shea butter in these two examples does not
include packaging, marketing expenses, etc.

Page 20 of 28


7: Supporting Actors in the Shea Industry/Contacts

NGOs and Companies Involved in the Ghanaian Shea Industry

1. SARI (Savannah Agriculture Research Institute)
2. JICA – Village group training programs
3. Africa 2000 has some Shea programs (Office located in Kalpohene Estates)
4. SNV – shea is a focus product in their private sector development program.
Chris Bakaweri is the Tamale coordinator for their Private Sector
Development program working in shea. cbakaweri@snvworld.org. Balma
also works with him at the SNV Tamale office.
5. NGO Ride – this is the social responsibility arm of the Company. Katharina
Woener is the Country Director, telephone number: 020 932 2693. e-mail:
katharinawoener@gmx.de. Kwabena Badu-Yeboah is the Director, F&A, tel
0244 523 594 and 020 813 1258, e-mail: kwabena_yeboah2001@yahoo.com.

Major International Companies in the Shea Industry:
1. L’OReale
2. L’Occitane
3. AarhusKarlshamns- in Denmark / Sweden
4. IOI group (Loders-Croklaan in Holland)
5. Feeds, Fats & Fertilisers in India
6. The Pure Company

(International Market Demands high butter content, stearin rich, boiled, sun-dried,
low free fatty acid & no foreign bodies

Local Buyers in Ghana (Nuts & Butter)

1. Bosbel Industries
Email: bosbelus1962@yahoo.com
Phone: 0244-864799
Tamale

2. Kassardjian Industries Limited
PO Box 2246, Accra, Ghana
Tamale

3. Ghana Nuts
Techiman
Buying Shea Nuts, Cashews, Groundnuts, and Soybeans

4. Savannah Fruits Company – Shea Butter
Pre-finances groups of rural women to supply quality Butter to Company

Page 21 of 28


Peter Lovett, Production Manager
peter@savannahfruits.com
Tamale (Peter): 0244292898
Accra: 0246360185

5. Ghana Specialty Fats Industries LTD. - Shea Nuts
(Plant capacity: 25,000 Tonnes in 2008), Plant Near Tema
K.V. Shevaa – Northern Region Agent/Buyer
Address: P.O. Box TL 2178
Tamale, N/R
Ghana, West Africa
Contacts: Mobile: 0244 315267
Email: shevaa3@yahoo.com

6. Centre For Agriculture and Rural Development (CARD)
Manager: Naresh Shukla
Address: P.O. Box TL 1504
Tamale, N/R,
Ghana, West Africa
Contacts: Office: 071 23512/24939
Mobile: 0244 716849
Fax: 071 26566

7. K.I. Ghana – Wa (Formerly Kassardjian)
Mr. Tewiah
Wa, Upper West Region
027 22261 (Wa)
0243 435312
0756 22656
0209 069044

Page 22 of 28


8. Appendices

Page 23 of 28


Appendix 1. Value-added to selling price of shea butter cosmetics.

Marketing
Shea Nut Marketing
Step 1 Step 2
0.1 €

Cost of the legal files
Bottle to permit selling
1€ 1€
(13 times the initial
Shea Butter price of shea butter
0.3 € Advertising Costs
Carton production)
5€
0.5 €

Finished Finished Finished
Finished Imported Product Product Product
Product Finished Sold to Sold Tax Sold Tax
Bulk
Sold Product Retailer Exclusive Inclusive
Production Finished Packaged
by 6€ by to the to the
0.5 € Product Finished
Producer Importer Public Public
50ml Product
5€ 12 € 21 € 25 €
1.5 € 3.5 €

Transport Retailer’s
and Import Margin
Producer’s costs 9€
Other Raw Margin 1€
Materials 1.5 €
Packaging
0.7 €
0.5 € Taxes, VAT
4€

Page 24 of 28


Appendix 2. Ghana Shea SS MAP (from SNV Ghana).

Regional? Pharma -
Cosmetics Emerging? Food Sector (EU)
ceuticals
End Use? (US, CD) Markets

Body
Exporting Private Secaf, Loders
Shop AAK
Exporters Akoma Croklaan GSFI Ltd
SFC

TPC
Butter Private
Trading Agents
Kassardjian
Indivi (50%
dual
Women NASFPB
Loders
Butter (rural & Blue
Croklaan
Production Urban) Mont?
(In country) (20 –
Women
25%
Groups
3Fs:15-20%?
Nut IBG?:(<10%)
Bulking NASFPB OLAM

Individual
Rural
Small scale Private local buyers,
women
Nut Trading LBAs of Companies and NASFPB

Primary
Processing
Individual Rural Women
Production

Page 25 of 28


Appendix 3. Traditional Shea Processing (adapted from Dr.
Peter Lovett).

1. Harvest: fall fruit
picked from the ground

2. Accumulate: Fresh fruit
heaped for 1-2 weeks

3. Boil: Boil sheanuts with water
for ~ 90 min. at temps >95oC

4. Dry Nuts: Whole nuts spread
in the sun on a hardened mud or
concrete surface

5. De-husk: Nuts are hand-
pounded to remove husks

6. Dry Kernels: Kernels spread
in the sun for storage, sale, or
further processing.

Page 26 of 28


7. Crush kernels:
Hand-pounded.

8. Dry-roast kernels: Dry-
fried in large iron. pots.

9. Milling: Milled into
paste, usually by
commercial operator.

10. Kneading: Vigorously, hand-
beaten for 30-60 minutes until fats
form emulsion, washed, &
removed

11. Boil fat: Cleaned by boiling on
an open fire with decanting stages to
clarify the oil.

12. Prepare for use, sale, or
storage: Liquid is left to
cool and stirred into a
smooth, creamy butter

Page 27 of 28


9. NOTES:

Page 28 of 28

Sheabutter export guide

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