Nigeria is the world's largest producer of cassava, producing 45 million tonnes in 2009 which was 19% of global production. Cassava cultivation and processing is a major industry in Nigeria, with the potential to create over 1.2 million jobs. However, the lack of advanced processing facilities represents an opportunity for investment and growth to further develop the industry.

1. CASSAVA PROCESSING
Cassava is a staple food to an estimated 800 million people worldwide, grown almost exclu-
sively by low-income and smallholder farmers. It is one of the few staple crops that can be
produced efficiently on small scale. Cassava is currently the third-largest source of food
carbohydrates in the tropics, after rice and maize. It is estimated that 56% of world cassava
cultivation is carried out in Africa, 32% in Asia, 16% is done in Latin America and the re-
maining 0.1% is done in Oceania. Nigeria is the world’s largest producer of cassava, while
Thailand is the largest exporting country of dried cassava.
NIGERIAN CASSAVA PROCESSING INDUSTRY
 Nigeria is the world's largest producer of the commodity. In 1999, Nigeria produced
33 million tonnes, while a decade later; it produced approximately 45 million tonnes,
which was almost 19% of production in the world.
 Nigerian cassava production is the largest in the world; a third more than the pro-
duction in Brazil and almost double the production of Thailand and Indonesia.
 The average yield per hectare is 10.6 tonnes and Nigeria’s cassava transformation is
the most advanced in Africa. The country has well-established multiplication and
processing techniques for food products and cattle feed.
 Cassava is produced in 24 of the country's 36 states and predominantly in the south-
ern part of the country, both in terms of area covered and number of farmers grow-
ing the crop. However, the North central zone produces the largest quantity of cas-
sava owing to their unique climate
 Annual consumption of wheat flour in Nigeria is put at 6 million metric tons, 20%
cassava flour inclusion will increase cassava flour consumption to 1,200,000 metric
tons annually. This can be translated to 6,000,000 metric tons of cassava tubers and
1,200,000 hectares of cassava being cultivated and also creating not less than
1,200,000 jobs for Nigerians
 The major bane for growth in the sector is the absence of high-grade agro-processing
facility. Thus, when compared to the more developed cassava markets, Nigeria’s
cassava sector offers a clear opportunity for good growth.
 Africa leads cassava
production with c.162.5
million tons, account-
ing for 56% total world
production
 The Asia continent is
next where cassava
production accounted
for 32% of total world
production with c.92.9
million tons
 Global cassava output
had been expanding at
an exceptionally high
rate (4 percent p.a.),
outpacing most other
staple crops and far
exceeding world popu-
lation growth.
 Cassava is a very ver-
satile commodity with
numerous uses and by
products. Each compo-
nent of the plant can be
valuable to its cultiva-
tor. The leaves may be
consumed as a vegeta-
ble, or cooked as a
soup ingredient or
dried and fed to live-
stock as a protein food
supplement.
 Cassava is consumed
in all countries of the
world in various forms,
either for food or bio
fuel. China is the high-
est importer of cassava
for bio-fuel, modified
starch, animal feed and
pharmaceutical food
industries
INVESTORS SNEAK PEEK

2. CASSAVA PROCESSING METHODS
INDUSTRY ATTRACTIVENESS
BUYERS POWER
Industrial customers and millers have the power to dictate the terms of trade to cassava
farmers. However, since the demand for processed cassava outweighs the supply, it neu-
tralizes any effect the buyer’s power might have on the profit margin. Therefore, this fac-
tor does not reduce the attractiveness in the cassava sector.
SUPPLIERS POWER
The major required supplies for a cassava processing plant are the cassava and the cassa-
va processing equipment. Due to the perishable nature of cassava, farmers are usually
under pressure to sell off produce quickly and hence tend to have very little power. We
consider suppliers’ power over the industry to be low.
THREAT OF SUBSTITUTES
A substitute can be regarded as something that meets the same need, but is currently out-
side the specific industry being reviewed. There are alternative sources of carbohydrate;
hence, this factor significantly decreases the attractiveness of the industry. Nonetheless,
the recent mandate to millers in Nigeria to have input of 20% cassava flour in their pro-
duction should make cassava prices more competitive.
THREAT OF NEW ENTRANTS
The position of existing firms is stronger if there are barriers to entering the market. Frag-
mented industries like the cassava production and processing tend to have low entry
barrier, which will usually lead to lower pricing of the industry’s product. However, due
to the high costs of purchasing modern cassava processing equipment; the entry barrier
factor for mechanized processing is further increased. These factors make the sector more
attractive
COMPETITIVE RIVALRY
A high level of rivalry within an industry usually leads to price war among the current
players. However, the competition is currently not so high in our local market due to de-
mand vs. supply dynamics
 Cassava is produced in 24
of the country's 36 states
and predominantly in the
southern part of the coun-
try, both in terms of area
covered and number of
farmers growing the crop.
However, the North cen-
tral zone produces the
largest quantity of cassa-
va owing to their unique
climate.
 The land holding for aver-
age cassava farmers in
Nigeria is between 0.5–2.5
hectares (1.2–6.2 acres),
with about 90% of pro-
ducers being small-scale
farms
 According to the Ministry
of Agriculture and Rural
development, Nigeria has
a current contract to sup-
ply China up to 3.2million
tons of dry cassava chips,
this will translate into as
much as $800 million.
Hence, the opportunities
for cassava processing
abounds.
 For cassava starch and
flour, growth in global
transactions expanded
substantially in 2016,
breaking the 10 million
tonnes mark for the first
time
 Cassava flour producing
equipment importation
into the country is now
duty free; and importa-
tion of agricultural ma-
chinery & equipment will
now attract zero duty as
well.

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