Ethanol Market In Nigeria: How To Start Ethanol Business

What is stopping you from getting into ethanol business in Nigeria? The ethanol market in Nigeria is huge and getting even bigger. Ethanol is a pure alcohol that is colorless, volatile and flammable. It is a by-product of metabolic process of yeast. Most times, ethanol is manufactured when sugar is fermented with yeast. The sugar can be derived from any natural source such as corn, sugar cane, cassava and even some over riped fruits. The United States is the highest producer of ethanol in the world. They are closely followed by Brazil.

The usage of ethanol for industrial and other purposes gain popularity as a result of the agitation on the part of environmentalists who claim that the production and usage of gasoline fuels and other petroleum products are causing harm to nature. It is believed that global warming and flooding can be attributed to the fact that vehicles and industries using petroleum products are emitting gasses that are harmful to the atmosphere thereby damaging the ozone layer.

Some countries of the world, such as the United States have mandated that its citizens must use 10% of ethanol as motor fuel. The impact is that in that country, 13.8 billion gallons of ethanol was consumed in just 2013. This action does not just save the environment, it has saved the citizenry a lot of money.

SEE ALSO: How To Participate In The Oil And Gas Industry In Nigeria

Ethanol is not new in the market, but the potentials have not been fully explored. In some sub-Saharan African countries, ethanol are brewed locally. But the distillation process is not perfected enough to have a fine spirit. This has encouraged the importation of ethanol. Even then, opportunities still abound to import ethanol and make money distributing it. Would you like to know what is required of you to start the business? You need to take the following steps:

1. Get The Importers Contacts

There are hundreds of importers of ethanol in the world today. This gives you the opportunity to compare prices and quality. You can get contact of importers from the United States, Brazil, China and Indonesia. Note that this article does not endorse any organization for your business transactions.

SEE ALSO: Nigeria Import Guidelines Effective From December 1, 2013

This is perhaps one of the most important aspect of ethanol business. You will be surprised at how much turnover you can make just by supplying ethanol. The ethanol market is there in Nigeria waiting for you to invest.

Medical And Pharmaceutical Industries

The health sector has a constant need and demand for ethanol. Pharmaceutical industries use it in their laboratories for manufacturing of blood tonic and multivitamin syrups. They also use it in facial cleansers and other shaving products for men and women. Sometimes, this organizations simply bottle ethanol as methylated spirits used in treating cuts and wounds in the hospital and at various homes.

Get the list of pharmaceutical companies in your locality, ask of the quantity they use, convince them you can supply good product at a relatively cheaper rate.

Recommend E10

E10 is a term used in describing that 10% of ethanol has been mixed with gasoline as motor fuel. This has worked for several years in countries like United States, Brazil, China and so on. It can work in your country too. Inform transportation and logistics organizations about how cost effective it is and of how they will be contributing to saving the environment. Primarily, you must have experiment with E10 using your own car or that of your friends. Give them practical reference that it worked for you, it can also work for them. As a matter of fact, some countries are moving to E85. This means that they use 85% of ethanol in moving their vehicles.

Ethanol is not just used in powering cars, gasoline generators, lawn mowers, motorcycles can also use it to power their machines. This shows that Individuals too can constitute your ethanol market in Nigeria. It is recommended that you start with individuals before going to larger corporations.

Universities, Polytechnics, Secondary Schools

These days, practical research is carried out in schools so as to train the students the practicality of what texts books are writing on. From Chemistry to Biology classes, teachers and students have need to use ethanol. The chemical is especially required to preserve some materials used in experiments.

Secondary schools abound. Many of them have not been using ethanol in experimenting before. Talk to them and make them see the need for using ethanol in their laboratories for preservative and other purposes. Extend your net to the science faculties of polytechnics and universities. You will reap what you are sowing in millions eventually.

Local Gin Manufacturers

Do not be surprised that this might constitute your largest market. With the rate at which manufacturers of bitters spring up in some parts of Africa and Asia, they will soon be running after a distributor of ethanol like you, while you take turn to run after your supplying manufacturer.

Apart from producers of Bitters, distilleries demand ethanol in high quantity as it is the main ingredient in the manufacturing of rum, dry gin, schnapps and other spirit based drinks. Walk up to this people, give them your USP and strike that deal.

2. Get A Warehouse

Your warehouse can also double as your office. In the meantime, it has to be big enough to house your tank or drums. If you chose to start your ethanol business big by using 30,000 litres, you will also need fuel dispenser. You may not have to give your self such stress as the drums that your suppliers use in bringing the spirit can also serve as your tank.
Though its not as much as gasoline fuel, ethanol is highly flammable. So you do not incur loss, your warehouse and its vicinity should be a ‘no smoking zone’.

Ensure that your warehouse is fenced to prevent intruders and bush fire.

3. Get Supply Trucks

Your trucks will serve the purpose of transporting your stock from the port to your warehouse and especially from the warehouse to the various destinations of your customers. It is not economical to spend money on hiring truck each time you want to supply your product. Even if it means getting additional loan now, buy your own truck. Apart from the fact that it is economical, it is also convenient for you.

While you are likely to start with one truck, there may be need to buy more as demand for your product increases.

4. Get Your Staff Ready

For starters, those you need in your ethanol business are sales people to help create the needed awareness, warehouse boys, accountant and drivers.

5. Start Selling And Making Money

Presently, the average cost of a ton of ethanol from the exporter is $1,000 per metric ton. On the average a metric ton will give you 1,000 litres. depending on your locality and your bargaining power, you can make about $500 on each metric ton sold. This is a very viable business considering that demand will increase and turnover will increased as well.