Guide to Chemical based Production in Nigeria

Introduction

The chemical industry in any country usually has the greatest business opportunities. In Nigeria, the opportunities in the chemical production and business is immeasurable and very vast that less than 6% of it has been tapped. This is in contrast to developed countries as United States, Uk, Canada and Asian countries whom have a more developed chemical market.

The reason is the fact that almost everything on the surface of the earth is composed of chemicals. Hence there is absolutely nothing that one can do in this life without involving chemical components at one stage or the other.

It is a necessity and no one can do without it. Now, think of it from the food we eat, the house we live, the road we use, the clothes we wear, drugs we take, water we drink, the land we farm, chemicals of various quantities and types have to make all these possible. This is the reason why there cannot be life as it is today without the chemical industry.

DEVELOPMENT

The development of this industry has suffered. It has suffered neglect and setback. The major reason is that most people are ignorant of the vast opportunities the chemical industries hold in terms of business and job creation. The opportunities are vast and more than other sectors of the economy. Nigeria provide a vast market opportunities for many established and would be entrepreneurs to venture in this sector of the economy. The population is growing geometrically and so are the people needs. So, industrialist, entrepreneurs and would be entrepreneurs like you are being relied upon to bridge the gaps. I also want to let you know that the chemical Production industry is a huge market with range of chemical products such as cosmetics, adhesives, beverages, disinfectants, inks, soaps and detergents, industrial chemicals, wood finishes, lubricants to mention but a few going a long way to provide a decent business opportunity for any willing investor. Another positive is the massive income opportunities which is inherent in this industry.

INCOME OPPORTUNITIES

The income earning potential on full scale can give one a lifestyle of choice, leveraging on the increasing population of this country. Nigeria runs a consumption based economy. A cake consumption instead of cake baking economy. It is an open and begging opportunities for more investment in the chemical production and manufacturing business. And with a population of over 160 million whom have to depend on the chemical products to survive, it becomes increasily necessary to start a chemical business of your own. Surely, anyone can start and can start in small scale and with the necessary skills, information and knowledge, success is assured.

MARKET SIZE

Nigeria companies consume in excess of $3.58 billion dollars worth of chemicals per annum but produces just $380 million dollar in equivalent creating a short fall of $3.2 billion dollar. The shortfall is filled mainly with importation. There are opportunities for new entrants to enter the industry and take advantage of healthy margins. A small scale producer can leverage on a strategic strength of good quality at reasonable price to create a cutting edge advantage against the big players whose products are of higher prices.

FACTORS FOR CHEMICAL BUSINESS SUCCESS

In the world of chemical business, planning play a very important role in determining its success. Though it is not different in other business, certain step has to followed including the proper procedure to get the right results. To survive and succeed in making any chemical product in Nigeria, the following steps are vital:

PERSONAL ASSESSMENT

This is the first step. Make a SWOT analysis. This is necessary as it will give you an edge and a basic foundation to grow your business.

SWOT means: Strength, Weakness, opportunities and Threats.

Strength: What is your strength? Every one has the same. Are you a good entrepreneur? Is your qualification, knowledge, training, experience, personality trait, passion, network, finances among others, at advantage to you? Capitalize on your strength. Your strength lies where you have major advantage over others.

Weakness: Find where your negative points lie. When you identify them clearly then it is much easier to deal with them. Are you poor in selling, keeping books or supervising people? Leverage on areas where you are weak. Find and use the best hands in the area where you have weakness.

Opportunity: Opportunities are untapped or not fully tapped prospects. Finding and filling a gap in the market for any chemical product is an opportunity to make good gains. Eventually, the market might start getting saturated due to increasing competitors. If you invent a product that is needed by people, you have an opportunity. In the Nigerian chemical industry, the opportunities for making chemical products is limitless.

Threat: What potential dangers are ahead of your business venture? These could be government policies, natural disasters like floods, cyclones, draught and conflicts like community clashes, militancy, wars among others. A ban in the use of your major raw material can be a big threat to your operations. Watch out for threat far ahead and do something to survive bad times. Unfavourable competition by imported product occasioned by government policy can affect your business.

After putting it in SWOT, you can now know where to improve upon, leverage or device strategies to survive and succeed as an entrepreneur in chemical business.

EMPOWERMENT

Get the necessary information, contacts and training to empower yourself. It can be motivational, managerial and technical. The first stage is to go for entrepreneurship training if you have not done so. Do not ignore this, no matter your level of academic qualification. There are many centers in Nigeria where you can get this type of training at little or no cost e.g SMEDAN, NASSI, NDE, NASME, CBN, Association of chambers of commerce, Industries, Miners & Agriculture are some of the reliable ones.

PRODUCT SELECTION

This can be a difficult stage but you have got passion. Make a list of chemical products you will naturally want to produce if you had everything you need to do so. Scrutinize and grade them according to market demand. This may require some market survey or consulting a market expert. Make a list of the five most popular and subject each one to:

  • Market demand (present & future).
  • Availability of technical know how.
  • Availability of raw materials.
  • Financial outlay.
  • Present & future health of the industry.

Select one project that is most favoured by the above factors. The products must be the ones that you are passionate about. In doing this, you may need the support of a consultant, friends, family members and mentors. In the case of the chemical business project, it may involve choosing an industry instead of a product. This is so because many product can be made in a single chemical industry. For instance, if you choose soap industry, you can still make choice from laundry, toilet medicated, powder or liquid soap. These products have the major raw materials in common. And there lies the beauty and the advantages of chemical processing business.

TECHNICAL SKILL & KNOWLEDGE

For some other business, it might mean less but to survive and succeed in making chemical products, you must get the right type of technical knowledge. It is so necessary to gain a cutting edge especially in a competitive chemical industry. Buy resource books and empowerment manual to gain insight on new products and skills. You must get the right type of knowledge and skills and your key workers must also do same. Find and acquire the appropriate technology which include formulations, equipment and expertise. For your exact product or products, you must consider what the present would be competitors are doing in terms of technical know how and think is important for making quality products at competitive advantages. Look into the future to be sure you are not left behind technologically as it relates to your business.

CONSTITUTION OF THE FIRM

Sit and get a mental and written picture of your proposed company. This is your VISION of this idea you want to call your company. Write down what you want your company to be known for. This is your mission statement. If you want your printing ink to be sold in almost every shop around you, or your company to be the place where every distributor of printing ink would love to be associated, maybe because of your excellent quality service, then these vision and mission can help drive your business forward. They can attract the right partners, associate, investors, financiers and even employees.

Start your firm constitution by a sound vision and mission and then go ahead to form either sole proprietorship, partnership , private limited company, cooperative society firm or public limited company and get it registered with CAC using an appropriate name that will reflect your vision and vision.

CHEMICAL BUSINESS VALUE CHAINS

The Producer

The producer is the main player in the chemical Industry. He can be a manufacturer, an innovator, a chemical scientist or the creator. He first conceive in his mind what he intend to produce; this is a mental creation and then second carrying it out representing the physical creation. He either creates the product from scratch, add value to the product already in the market or may even be alike the same product as in some case in acquiring the patent right and franchise to produce the same product.

In some cases, a producer might also be the chemical scientist who conceives the product and went ahead to produce or manufactures it. Income potential as a producer is amazing. On a small scale level, of investment of N200,000 would yield 100% return in a few months and on business stability would offer over 300% return on monthly basis. Furthermore, he wields tremendous power as he can be involved in composition and actual running of his enterprise.

The Chemical Scientist

He is an important player in the Chemical Industry. He is involved in the creation, production and sales of the chemicals. With his formal education and training, he understands the various elements, compound and extractive techniques from raw sources. The chemical laboratory is usually his dormitory and a single discovery or innovative product can shoot him to fame and wealth. His products can impinge every aspect of our lives.

Furthermore, many companies buys some of his chemical products as intermediates in their own manufacturing processes. Often, there are clusters of processes which use the output of one as the input to another. Example, ammonia is made from natural gas and can be converted to hydrogen cyanide. Becoming a chemical scientist can be very rewarding as he earns millions of naira per annum for his researches, consultancy and sales of chemical product. He is also well respected by the public and stakeholders in the chemical industry.

The Armchair Investor

He is a very important in the chemical industry because of his experience, resources and financial wealth. Usually, he is a shareholder; an important stakeholder and contribute positively to the growth and development of the chemical enterprise. He might not have control over the actual running of the enterprise but decisions that can affect the finances and long term growth of the company cannot be taken without his input.

In some cases, he might be the owner of the chemical firm if he owns 100 shares of the firm, in some other cases, it is a partnership whereby it is jointly owned by the 2 or more investors. But know that the armchair investor is a risk bearer and his concerned about the growth of his investment in both short and longer term. His earning is a jumbo determined by his stake and amounts of shares he holds.

The Distributor

He is an important element in the chemical production industry. He is an entity that buys competing chemical products or product lines, warehouses them and resell them to retailers or direct to the retailers or direct to the end users or customers. In some cases, a company chooses its distributor and get them licensed while in other cases, it is an open one where any one with good capital can buy its products.

Their powers are limited but can be involved in promotional activities; providing strong manpower and cash support to the manufacturer’s promotional efforts. They usually also provide range of services such as product information, estimates, technical support, after sales services, credit etc to their customers.

Financially, they are robust and with over 100% return on investment in few months.

The Facilitator

From their name, they play a facilitation role. They can play this role in any of the different value chains available in the chemical industry. They can be involved in research, creative and useful information, writing articles, publications, training, business registration and incorporation, composition, funding, planning and even mediatory roles in this industry. He is someone who engages and help people understand their common objectives and assist them to plan how to achieve these objectives. They also enable groups and organizations to work more effectively; to collaborate and achieve synergy.

They play a supportive role and an important factor in the growth of the chemical industry. They earn from the fees they charge for their services and impact is appreciated and respected.

The Chemical Importer

The importer is involved in the importation of chemical based products which are not readily available or produced in the country. The importation of chemical based product is a profitable venture for many Nigerians. An applicant wishing to import chemicals into Nigeria should first make an application. He will apply in his company letterhead with GSM number and email which would be addressed to the Director, Narcotics and controlled substance Directorate, National Agency for Food and drug administration and Control, Oshodi, Lagos. The process involves filling of necessary forms, presentation of other document and payment of required fees and will ultimately be issued with an import license if all conditions are met.

Financially, it is very rewarding with profit running in millions after sales of products. It is also important to note that it is strictly regulated and license is painstaking acquired.

The Trade Merchant

The trade merchants are an important stakeholders in the chemical business value chain as the chemical chain cycle cannot be completed without them. Don’t get it twisted, they are important not because, the chemical industry cannot function without them but because they are closer to the end users and consumers. For a small scale chemical entrepreneur willing to venture into the production industry, he is indispensable and he can provide him with the necessary chemical, equipment and raw materials to start the production process. He also does direct supply to different institutions such as schools, hospitals, hotels and even research institutes.

On the financial level, he averages good returns on investment if he does well in marketing of his services. In addition, it is important to note that a trade merchant can as well be an importer of his product just as an importer can double as a trade merchant.

The Marketer

The chemical industry can never be complete without the efforts and contribution of the product marketer. Promotion has its place; creating the necessary awareness of the product to the general public. New releases and new product line testing can be the avenue for the marketers to show his skills and strategies. Hence for any company that wants to be a market leader or to be a big deal, marketing should be at the forefront of its plans.

The marketer might either be employed by an organization or an open position available to any willing individual or interest group. It also open an opportunity for anyone to position in any of the value chains. Most organizations that has a product to offer the public would welcome any individual whom is willing to promote and sell their products. All one need is to get their product and look for avenues to promote them and earn finder fees in return. This is referred to as affiliate marketing; affiliating to promote someone else product.

Working as a marketer in a conventional company or in an open marketplace can also be rewarding. This is due to fact that product companies understood that marketing is the life of their business and if they eased up on marketing, they will get lapped. Often they are compensated based on sales or referrals they have made for the business.

DIVISION OF THE CHEMICAL INDUSTRY

The products of the chemical industry can be divided into three categories namely, the basic chemicals, specialty chemicals and consumer chemicals. The basic chemicals are produced in huge quantities (million of tonnes). They can include chemicals from oil, polymers and basic inorganic. Specialty chemicals are produced in modest kilogramme quantities but with very high value. It covers a wide variety of chemicals for crop protection, paints and inks. With active research and development, specialty chemicals deliver better and more stable profitability.

Last but not the least is consumer chemicals. Consumer chemicals are sold directly to the public. They include for example detergents, soaps and other toiletries.

FUTURE OF THE INDUSTRY

There have been marked increase of new entrant into the industry over the years and as more investors are putting their seed into this industry. All we see is successes, hope and opportunities. The economy of the country is regaining strength after years of economic hardship. We sincerely believe that with adequate power, infrastructure and manpower development, the industry will go in leaps to for the benefit of all.

It is a huge market and everyone with the necessary capital and knowledge would tap from the business opportunities it presents. Nothing is so powerful than an idea whose time has come; and the time has come to invest rightly by investing in the chemical line of business. Have a nice day.

NIGERIAN STEP-BY-STEP GUIDE TO PRODUCING OVER 100 FAST SELLING CHEMICAL PRODUCTS SUCH AS

Cosmetics,

Adhesives,

Beverages,

Disinfectants,

Auto Car Paints,

Industrial Chemicals,

Printing Inks,

Lubricants,

Decorative Paints,

Soaps & Detergents,

Office/ Stationeries,

Stain Removers,

Wood finishes & Treatments,

Greases,

Bathroom Cleaners

Etc

ADHESIVES (SHORT REPORT)

chemical5

An adhesive, or glue, is a mixture in a liquid or semi-liquid state that adheres or bonds items together. Adhesives may come from either natural or synthetic sources. The types of materials that can be bonded are vast but they are especially useful for bonding thin materials. Adhesives cure (harden) by either evaporating a solvent or by chemical reactions that occur between two or more constituents. Adhesives are advantageous for joining thin or dissimilar materials, minimizing weight, and when a vibration dampening joint is needed.

COSMETICS (SHORT REPORT)

cosmetcs

Cosmetics are substances used to enhance the appearance or odor of the human body. Cosmetics include skin-care creams, lotions, powders, perfumes, lipsticks, fingernail and toe nail polish, eye and facial makeup, towelettes, permanent waves, colored contact lenses, hair colors, hair sprays and gels, deodorants, hand sanitizer, baby products, bath oils, bubble baths, bath salts, butters and many other types of products. A subset of cosmetics is called “make-up,” which refers primarily to colored products intended to alter the user’s appearance. Many manufacturers distinguish between decorative cosmetics and care cosmetics.

Cosmetics can also be described by the form of the product, as well as the area for application. Cosmetics can be liquid or cream emulsions; powders, both pressed and loose; dispersions; and anhydrous creams or sticks. The cosmetic industry is a profitable business for most manufacturers of cosmetic products. By cosmetic products, we understand anything that is intended for personal care such as skin lotions or sun lotions, makeup and other such products meant to emphasize one’s look. The cosmetic industry has grown not only in Nigeria but also in various parts of the world which have become famous for their cosmetic precuts.

DISINFECTANTS (SHORT REPORT)

chemical1

Disinfectants are substances that are applied to non-living objects to destroy microorganisms that are living on the objects. Disinfection does not necessarily kill all microorganisms, especially nonresistant bacterial spores; it is less effective than sterilizations, which is an extreme physical and/or chemical process that kills all types of life. Disinfectants are different from other antimicrobial agents such as antibiotics, which destroy microorganisms within the body, and antiseptics, which destroy microorganisms on living tissue. Disinfectants are also different from biocides — the latter are intended to destroy all forms of life, not just microorganisms.

Disinfectants are frequently used in hospitals, dental surgeries, kitchens, and bathrooms to kill infectious organisms.

TYPES OF DISINFECTANTS IN NIGERIA

Air disinfectants ,

Alcohols,

Aldehydes,

Oxidizing agents,

Phenolics,

Quaternary ammonium compounds,

Silver,

Others

BEVERAGES (SHORT REPORT)

A beverage, is a liquid which is specifically prepared for human consumption. In addition to filling a basic human need, beverages form part of the culture of human society.

TYPES

   Water

   Alcoholic beverages

   Non-alcoholic beverages

   Soft drinks

   Fruit juice

   Hot beverages

   Miscellaneous

INKS (SHORT REPORT)

Ink is a liquid or paste that contains pigments and/or dyes and is used to color a surface to produce an image, text, or design. Ink is used for drawing and/or writing with a pen, brush, or quill. Thicker inks, in paste form, are used extensively in letterpress and lithographic printing. Ink can be a complex medium, composed of solvents, pigments, dyes, resins, lubricants, solubilizers, surfactants, particulate matter, fluorescers, and other materials. The components of inks serve many purposes; the ink’s carrier, colorants, and other additives control flow and thickness of the ink and its appearance when dry.

Ink formulas vary, but commonly involve four components:

  • Colorants
  • Vehicles (binders)
  • Additives
  • Carrier substances

Inks generally fall into four classes

  • Aqueous
  • Liquid
  • Paste
  • Powder

Colorants:Pigment inks are used more frequently than dyes because they are more color-fast, but they are also more expensive, less consistent in color, and have less of a color range than dyes. [1]

Pigments: Pigments are solid, opaque particles suspended in ink to provide color. Pigment molecules typically link together in crystalline structures that are 0.      1–2 µm in size and comprise 5–30 percent of the ink volume. Qualities such as hue, saturation, and lightness vary depending on the source and type of pigment.

Dyes:  Dye-based inks are generally much stronger than pigment-based inks and can produce much more color of a given density per unit of mass. However, because dyes are dissolved in the liquid phase, they have a tendency to soak into paper, making the ink less efficient and potentially allowing the ink to bleed at the edges of an image.

LUBRICANT (SHORT REPORT)

lubricant

A lubricant is a substance introduced to reduce friction between moving surfaces. It may also have the function of transporting foreign particles and of distributing heat. The property of reducing friction is known as lubricity.

One of the single largest applications for lubricants, in the form of motor oil, is protecting the internal combustion engines in motor vehicles and powered equipment.

Typically lubricants contain 90% base oil (most often petroleum fractions, called mineral oils) and less than 10% additives. Vegetable oils or synthetic liquids such as hydrogenated polyolefins, esters, silicones, fluorocarbons and many others are sometimes used as base oils.       Additives deliver reduced friction and wear, increased viscosity, improved viscosity index, resistance to corrosion and oxidation, aging or contamination, etc.

Lubricants such as 2-cycle oil are added to fuels like gasoline which has low lubricity. Sulfur impurities in fuels also provide some lubrication properties, which has to be taken in account when switching to a low-sulfur diesel; biodiesel is a popular diesel fuel additive providing additional lubricity.

Non-liquid lubricants include grease, powders (dry graphite, PTFE, Molybdenum disulfide, tungsten disulfide, etc.      ), teflon tape used in plumbing, air cushion and others.Dry lubricants such as graphite, molybdenum disulfide and tungsten disulfide also offer lubrication at temperatures (up to 350 °C) higher than liquid and oil-based lubricants are able to operate. Limited interest has been shown in low friction properties of compacted oxide glaze layers formed at several hundred degrees Celsius in metallic sliding systems, however, practical use is still many years away due to their physically unstable nature.

Another approach to reducing friction and wear is to use bearings such as ball bearings, roller bearings or air bearings, which in turn require internal lubrication themselves, or to use sound, in the case of acoustic lubrication.

In addition to industrial applications, lubricants are used for many other purposes. Other uses include cooking (oils and fats in use in frying pans, in baking to prevent food sticking), bio-medical applications on humans (e. g.  lubricants for artificial joints), ultrasound examination, internal examinations for males and females, and the use of personal lubricant for sexual purposes.

PAINTS (SHORT REPORT)

paints

Paint is any liquid, liquefiable, or mastic composition which after application to a substrate in a thin layer is converted to an opaque solid film. One may also consider the digital mimicry thereof. It is most commonly used to protect, color or provide texture to objects.

COMPONENTS:

Pigment.

Binder, vehicle or resins.

Solvent.

Additives.

Etc

WOOD FINISHES & TREATMENT (SHORT REPORT)

wood finish

Wood finishes refers to a chemical for embellishing and/or protecting the surface of a wooden material. The process starts with surface preparation, either by sanding by hand (typically using a sanding block or power sander), scraping, or planning. Imperfections or nail holes on the surface may be filled using wood putty or pores may be filled using wood filler. Often, the wood’s colour is changed by staining, bleaching, ammonia fuming and a number of other techniques. Some woods such as pine or cherry do not take stain evenly, resulting in “blotching”. To avoid blotching, a barrier coat such as shellac or “wood conditioner” is applied before the stain. Gel stains are also used to avoid blotching.

Once the wood surface is prepared and stained, a number of coats of finish may be applied, often sanding between coats. Commonly used wood finishes include wax, shellac, drying oils (such as linseed oil or tung oil), lacquer, varnish, or paint. Other finishes called “oil finish” or “Danish oil” are actually thin varnishes with a relatively large amount of oil and solvent. Water-based finishes can cause what is called “raising the grain” where surface fuzz emerges and requires sanding down.

Types of finishes

There are basically three types of finish:

  • Evaporative
  • Reactive
  • Coalescing

NIGERIAN STEP-BY-STEP GUIDE TO PRODUCING OVER 100 FAST SELLING CHEMICAL PRODUCTS SUCH AS:

Adhesives (Multi-Purpose white glue, leather and rubber/PVC adhesives, polyester/car body filler, office gums, clear/swam glue, putty, super glue, gasket gum, casein glue, wall poly filler, cassava starch adhesives etc).

Beverages (Fruit juice, ice creams, fruit/flavoured drinks, standard yoghurt, zobo fruit drink, cocoa beverage powder, standard soya milk drink, full fat soya powder, custard powder, baking powders, ice lolly etc).

Cosmetics (Spray perfume, hair shampoos, hair creams, moisturizing creams & lotions, deodorants & medicated powders, instant hair conditioners, nail polish cleaner etc).

Disinfectants (antiseptic disinfectants, germicides, toilet bowl cleaners, mentholated spirit, hydrogen peroxides solution, liquid air refreshers, insecticides etc).

Auto Car Paints (Auto base, auto lux, auto cryl, auto flex, auto cellulose, auto primer etc).

Industrial Chemicals (Petroleum jelly, cobalt drier, zinc stearate, industrial perfume, white cement etc).

Printing Inks (Nylon ink, plastic/PVC inks, flexo ink, web-offset ink, corrugated corrugated carton ink, marker inks, textiles/fabrics ink, food grade/edible inks, gravure inks, UV inks, Tin/metal inks, flexographic inks etc).

Lubricants (Motor engine oils, Brake/clutch fluid, automatic transmission fluid(ATF), radiator coolant, chain lubricant, lubricating/penetrating oils, cutting oils, mould release agents, automobile gear oil, industrial gear oil, motorcycle engine oil etc).

Decorative Paints (Gloss, acrylic & normal Emulsion, textured, flexure, P. O.P Emulsion, marble, primers/antSoaps & Detergentsi-rusts etc).

Detergent(Bar/laundry, toilet, medicated/antiseptic, powder detergents, scouring powders, multi purpose liquid detergents, dish washing liquid, hand wash liquid, black herbal soap etc).

Office Stationeries (Toner ink, ribbon ink, stamp pad/endorsing inks, marker inks, artist paint/poster colour, black board renovator, school chalk & crayons etc).

Stain Removers (Fabric stain removers, domestic stain removers, organic & inorganic stain removers, tiles and marble stain removers, rust & paint removers, perfumed laundry bleach etc).

Wood finishes & Treatments (Laquer, stain, sanding sealer, primer, varnish, polish, cellulose, wood preservatives etc).

Greases (Sodium grease, calcium grease, white grease, graphic grease, lithium grease, axie grease etc).

Etc

INCLUDES

Where & how to source for Raw materials, Equipment, & Funds.     

Rules of Chemical Business. 

Guide to product Branding.

NAFDAC, SON (Standard organization of Nigeria) & DPR  Requirements and how to meet them.     

Guide to registering your Chemical Business.    

Chemical Business Plan format

Sample Chemical Business Plan

Loans and Business financing including 14 Alternative ways to raise capital without visiting the Bank.     

Etc.     

pdf

The Chemical Manuals/Guides/Materials are comprehensive format prepared both in soft and hard copies and can be ordered whole or in parts to be delivered to you.    Also has in all, the Production Procedures, Formulations, Raw materials, Equipment, Sources of Raw Materials, Resource Materials and Contacts.

Call 07033097160 before placing any order. Cost: N6500.   

  

Have a nice day.  

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