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BUSINESS IN AFRICA™
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Businessafrica.net Newsletter
ISSN 1563-4108
INVESTMENT AND BUSINESS PLANNERS Fax: +1 202 478 0432 Click here for contact & support console |
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TAKE CARE OF BUSINESS IN AFRICA™ |
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| STRATEGY AND ECONOMIC ANALYSIS | |||
APPROACH TO A NATIONAL DEVELOPMENT SCHEME
INTERLINKING AGRICULTURE, INDUSTRY AND SERVICES
Strategy for African Countries
(Part
2)
FOR
PART - 1 CLICK HERE
INCOME
BUILDING POWER FOR A COMMUNITY
LESS
THAN 10% ANNUAL GROWTH-RATE? THAT'S PEANUTS
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This
delivery is the continuation of an article first published in French under the
title : "VIVRE
DE LA TERRE ET PROSPERER" in "LA CROIX DU
BENIN" N° 521 (March) - N° 522 (April) - N° 523 (May),1989. A
French version is available : "Le dévelopment économique
par une approche intégrée: l'agriculture, l'industrie et les services."
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Figures, statistics and examples are identical as first published in 1991 in the "International Trade Forum" and "Investors Forum" of CompuServe. Although this development scheme devised for the Republic of Benin it is applicable to any sub-Saharan African country. It can be copied and distributed by all means of media as far as credit is given to the Author Dr. Bienvenu-Magloire Quenum, who is available for further consulting with development agency, government, and import / export banks (Eximbanks). |
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The
implementation of this scheme will request investments in the range of
US$: 1.5 to 5 billions over a period of 10 years - depending on the initial
level of population of the African country considered.
From
the first year of such investment boosting, the country should experience
a yearly two digit economic growth. Click here to see a case study on how to achieve that. |
INTRODUCTION
To break the vicious circle of poverty and pave the way towards general prosperity,
to be enjoyed by every class of society in the nation, we should have a suitable
development strategy. Otherwise, all our efforts will end up without any noticeable
result, not to speak of a failure.
As 80 % of the population of Benin is dedicated to rural development activities;
a suitable strategy should tackle rural development problems and propose sound
solutions to make the country folk's life easy and their activities profit earning.
This document is a draft about such a strategy - based upon experience gained
in consulting for industrial and agro-industrial projects.
The dossier is structured into two principal axis:
| - A major axis. - A minor axis. |
Which exposed
various business and trade opportunities capable of driving the economic development
of the country on a double-digit rate path. To facilitate the success of the
scheme following actions are necessary:
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1-
The rural development activities are organized in such a way that the
farmers benefit from a proper logistics support: |
The
approach above outlined is the only way to establish industrial plants with
appropriate capacity to manufacturing goods for the domestic and foreign
markets.
It should be clearly understood
that the scheme is not aimed at building up a state controlled economy, but
rather a free enterprise one; guided and sponsored by the State as done and
still performed by South-Korea, Taiwan, Singapore and Japan.
The level of state involvement in the scheme will be developed in another
publication.
Centuries are not
always one hundred years old. The twentieth century really started in 1914 -
with the first great world war - and the emergence of the USSR in 1917. It ended
the year of grace 1989 with the collapse of said country and its totalitarian
ideology.
So, we are already in the one and twentieth century.The tremendous collapse
of USSR and its Eastern Europe' satellite regimes created a open and soon to
be a free market to which Western European states and North America shall be
more and more attracted.
If we Beninese want to catch up with the train of progress
and improve the economic development of our country; if we are willing to shake
out poverty not to remain perpetually assisted, we have to act and react fast.
The most efficient way to do so is to take our destiny into our hands. To organize
ourselves as South Eastern Asia nations did, to join, as quickly as possible,
the community of the nations, which broken the vicious circle of poverty.
Table N°1 in part - 1 of the
scheme gives an overall perspective of the industrial utilization of several
main agricultural products.
An industrialization strategy based on regular supply of local agricultural
raw materials to processing units, will help to establish a strong linkage
between agriculture and industry.
A strategy of industrial promotion linked to rural development could be staged
according to two axis:
THE MAJOR AXIS
| - Cereals. - Roots and tubers. - Vegetables oils and fats. - Fruits and vegetables. |
THE
MINOR AXIS
| - Medicinal and
bio-active plants. - Flowers and fragrance plants. |
TOP
Let's consider, in more details, the components of each axis.
A - THE MAJOR AXIS
A - 1 -Cereals
Two cereals have great potential in agriculture and industrial transformation
: corn and sorghum.
A - 1 - 1 - Corn
With corn as raw material flour milling and starch based industries can be set
up to provide for:
| - Flour and semolina.
- Proteins and starch. |
The water
extraction process of starch leads to the following byproducts:
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Glutenfeed : a mixture of fibers, broken corn grains and concentrated
swelling in water, currently used for animal feed. |
Chemical
and physical manipulations of starch lead to several other products: a)
Glucose and Iso-glucose syrups, used in food industry (candies and sweet in
general, biscuits, milk products, jellies, jams, fruits and vegetable syrups,
breweries, sauces); b) Natural or transformed starch (oxidized, etherified,
esterified, or gelled) is also used in many industries : pulp, cardboard, colloids,
textiles, oil-drilling, casting and foundry.
Let's make a special mention of dextrose, which is used in pharmaceuticals industry
for the preparation of antibiotics; it is also used in food industry particularly
for meat preparing.
Just to give an idea about the economic and financial impact of a glucose and
Iso-glucose industry, let's consider a plant set up to process 250 metric tons
per day of corn. Its productions will be the following :
| PRODUCTS |
YIELDS
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| Glutenfeed |
45
tons per day
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| Glutenmeal |
10
tons per day
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| Corn sprouts |
11
tons per day
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| Iso-glucose syrup |
150
tons per day at 71% dried component
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| Glucose syrup |
50
ton per day at 80% dried component
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| Natural starch |
15
tons per day at 88% dried component
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Without
delving into the details of a full and complete profit analysis study and
considering an operational period of 24 hours running; 7 days per week and
48 weeks per year i.e. 320 days; 190 employees and workers - the
turnover of the plant to produce glucose and Iso-glucose syrups, and natural
starch will amount to 11.25 millions US dollars. (The contribution
of glutenmeal, glutenfeed and corn sprouts not taken into account in the
estimated turnover.)
TOP
In addition, prior to industrial transformation, rural developers specialized
in corn cultivation would have earned the amount listed below, according to
the size of their holdings. Click
here for specifics
| Cultivated area in hectares |
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| Tons/year x 1,000 |
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| Numbers of developers |
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| Gross earning x 1,000 US dollars |
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A
- 1 - 2 - Sorghum
More than 26,000 species of this graminaceous plant are known and classified.
It is easy to cross one specie with another one. These 26,000 species are classified
in four categories:
| a - Grain sorghum.
b - Sweet sorghum. c - Broom sorghum from which large thick heads can be used as brooms. d - Fodder or forage sorghum. |
We consider
only a) and b) sorghum categories.
Everything said above about corn can be applied to sorghum; but one should bear
in mind that sorghum is more suitable to harsh climatic conditions than corn
and takes over when soils and climatic conditions are no longer favorable for
corn cultivation. Sweet sorghum is a very good agricultural raw material
to set up a glucose, Iso-glucose and starch based industry. But one should remark
that the syrup manufactured from sweet sorghum contains glucose and levulose
which make it difficult to crystallize. The following diagram N°1 points out
to the several business opportunities generated by a sorghum's transfromation
operation with a capacity of 200,000 metric tons / year:
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A plant
to process 200,000 metric tons of sweet sorghum a year necessitate a global
investment of US$ 103 millions for the various productions mentioned in the
diagram above. It needs 500 industrial jobs' creation; and will yield a gross
turnover of about 40 millions US dollars a year. These figures are
only estimates, to be analysed and confirmed by comprehensive Business Plans.
TOP
A - 2 - Roots and tubers
Gari (cassava cooked dried flour) is a national and regional popular food stuff.
We should develop its production together with yam flour and dried cassava cossets.
A starch based industry also could be set up with tubers and roots as raw materials.
The following diagram N°2 shows opportunities available from cassava as raw
material:
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Animal Food |
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Industry |
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agent; constituent; tapioca; glucose; sorbitol; etc. |
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Products |
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Products |
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foufou; attiéké. |
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Utilization |
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textiles; fermentation composites; drilling; etc. |
TOP
A
- 3 - Vegetable oils and fats
Vegetable oils and fats sector is the predominant agent of the major axis. It
will act as a global driving force for the economy of the country.
In Part -1 this
sector is extensively discussed
A
- 4 - Fruits and vegetables
A - 4 - 1 - Vegetables (tomatoes,
gherkins, mushrooms)
Tomato is a very popular foodstuff in Africa and throughout the world. But
Africa, as a whole, is an importer of tomato. A tomato development scheme,
well carried out, could help to gain market shares in Africa.
Let's consider some facts, which show what can be the contribution of a tomato
development program within this development scheme.
1 - The international market of tomato paste
a - Production
Two main regions dominate the production of tomato paste :
- The Mediterranean
basin produces about 1 million tons of tomato paste per year, from 6 millions
tons of fresh tomato. |
The production
of the Mediterranean basin - dominated by Italy, Greece and Turkey - is the
only one which provides for the international trade of tomato paste.
b - The cost of the raw material
The Mediterranean basin tomato paste's industry is a subsidized one. The European
Union ruling body: "The Commission" setup a subsidy scheme, which helps industrialists
of the sector to purchase raw material (fresh tomatoes) at discount-price. That
is the reason why tomato paste produced by the Southern European states are
very competitive on foreign markets; particularly in Africa and the Middle-East.
c - International trade
The international trade of tomato paste is controlled by the Mediterranean basin's
producers and particularly those of the European Union. California is quite
nonexistent.
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Africa
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M/East
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Africa
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M/East
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| France |
2,700
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4,700
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| Italy |
75,500
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57,500
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74,900
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64,500
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| Greece |
45,800
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23,000
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37,100
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11,500
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| Spain |
4,300
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1,700
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4,200
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200
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| Portugal |
2,000
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800
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2,400
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800
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| Turkey |
2,700
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42,500
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27,700
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25,000
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| TOTAL |
133,000
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125,000
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151,000
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102,000
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Africa and
Middle-East import small cans for final consumption. America imports in bulk
(barrels) for further reconditioning or transformation to more elaborated tomato
products. Saudi Arabia market stands for 40 % of the Middle-East market and
is a very attractive one if prices are competitive.
TOP
2 - Peeled tomato market
The European Union is the first producer of peeled tomato. Its production amounted
to 1 million tons in 1986 and exports to 550,000 tons. The producers from other
regions of the world are not big exporters, except the United States of America,
which exports about 150,000 tons per year to Canada and South America. The European
Union (Italy, Spain, Greece, France) exportations in 1986 (550,000 tons / year)
were mainly intra-community exchanges (two third) dominated by Italy up to 90
% of the total. North America imports 110,000 tons of the European Union's exportations.
Middle-East imports 30,000 tons and Africa 3,500 tons. Italy offered prices
on Africa and Middle-East markets are very competitive.
3 - Gherkins, mushrooms, onions
These are three opportunities to consider carefully. The North European and
American markets are fond of good quality and well packed gherkins. To take
over a slice of the market, contracts should be signed with big German importers
and those of Northern Europe. Onion is a popular and necessary foodstuff
for African meal preparations. Onion cultivation should be promoted and developed
for the national and African markets. There is a great variety of mushrooms;
we should select a few with good potential and promote their production.
A - 4 - 2 - Fruits
Exotic fruits are becoming more and more popular with European and North American
consumers. This is an important opportunity to earn hard currencies as global
demand is far beyond total international offer, quantity or quality wise. Any
newcomer to the market could make abundant profit if quality, quantity and supplying
are secured.
1 - The market of exotic soft drinks and pulps
It is quite a new booming market; but except for citrus, bananas and pineapples,
all the other categories (mango, guava, papaw) are not separately classified
by customs services. Passiflora juice accounts for more than 50 % of the market;
mango, guava and papaw standing for the rest. Passiflora juice - because of
its good flavor and high acidity percentage - is used to blend other fruit juices.
Products based on exotic fruit juices and pulps account today, on the European
market, for more than 30,000 tons per year; concentrates representing 50 % of
said amount i.e. 60,000 to 70,000 tons / year of simple fruit juice. The market
is sustained an increase of 15 % a year.
The Netherlands and particularly West Germany play a leading role in the industry
of exotic fruit juices and pulps. The two countries are big importers; they
blend and process further for other European countries. France and West Germany
are the main consumers.
Thailand is the leader for the production and exportation of mango. South America
dominates the passiflora business.
Guava is a difficult product to deal with; as quantity, quality and delivery
are not assured. Nevertheless, that is an opportunity for a newcomer, particularly
for the red specie.
As Africa, Caribbean and Pacific (ACP) states stand for only 2 % of the world
market, there is plenty of room to take a share of the market. We should
not hesitate to enter this venture. The ACP states benefit from 22 to 23 % tax
deduction to enter the European Union's market. Table below shows the cost,
insurance and freight (CIF) prices in US dollars per ton of the main exotic
fruit juice delivered to European harbors:
|
1985
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1986
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1987
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| Mango pulp 16°bx |
600
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825
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1,300
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| Guava pulp 16°bx |
750
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600
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650
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| Passiflora concentrate 30°bx |
2,800
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2,000
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8,000(50°bx)
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The above
listed prices are very interesting; but one should bear in mind that there is
a gap between offer and demand; the latter being far more important than the
former. According to the traders, prices will stop climbing; only mango may
sustain a minor improvement. Passiflora price certainly reached a maximum.
TOP
The European market is not
the only promising one. There is also the Middle-East market, and particularly
the Saudi Arabia market, on which good profit could be made by any newcomer
to the business who proposes good quality product at competitive price.
So we should not hesitate to propose good quality new exotic fruit, with new
flavor. Just as an example let's mention the prickly pear which could give
a good flavor juice or pudding. Prickly pear is the fruit produced by the
cactus plant specie one can see on beaches along the Gulf of Benin.
2- The market of dehydrated fruits
Nowadays, in Europe, when you are invited by friends for dinner it is frequent
to have dehydrated exotic fruit at cocktail-time. It is becoming more and more
popular and some industrialists established processing units specialized in
the production of desiccated exotic fruits.
The international trade of desiccated fruit is in the range of 20,000 tons a
year; exotic dehydrated fruits representing 35 % of the total.
The main importing countries are the European Union's countries, the United
States of America, Saudi Arabia, Kuwait, Japan, Hong-Kong which import globally
for about 10,000 tons / year.
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| Pineapple |
1,000
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The
Philippines, Thailand
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| Banana |
3,000
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Costa
Rica, Ecuador
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| Guava |
500
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China,
India, Taiwan
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| Mango |
1,500
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The
Philippines, Thailand, Brazil
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| Papaya |
3,000
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Thailand,
Pakistan, Malaysia, Vietnam, The Philippines
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| Other |
1,000
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Mediterranean
basin
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Banana
and papaw are the most promising on the market of dehydrated fruits. They can
yield good profits. Desiccated banana is well established on Northern Africa
and Middle-East markets.
TOP
In addition to dehydrated papaw one could also manufacture another industrial
product: freeze-dried (lyophilized) papain which is processed from the
latex of the green papaw fruit. Freeze-dried papain has a superior active power
in comparIson to atomized papain, which is, for the time being, prevalent on
the market.
There is a possibility to enter the European Union market of dehydrated fruits
for a new ACP's producer, as ACP states benefit from 25 % tax deduction to enter
the EEC market. CIF prices, European's harbors deliveries, are in the range
of US dollars 2,000 per ton for the dehydrated papaya and pineapple; about 4,000
for mango. Freeze-dried papain selling price is in the range of US dollars 7,500
per metric ton. Please note that the dehydrated fruits business is strongly
related to the production of crystallized fruits and candies.
3 - The market of dried fruits (nuts and hazel nuts)
There is a lot of nuts species around the world; and Benin, presently, has broad
expanses of cashew tree plantations uncared-for. It will be useful for the economy
of the country not only to rehabilitate such vast plantations, but also to increase
the acreage as cashew tree is a multi potential tree. A pleasant flavored soft
drink can be obtained from the pulp of the cashew tree fruit; and further processing
of said soft drink leads to a good quality drinkable alcohol; the cashew nut
itself being in great demand around the world.
Let's consider the international market of cashew nut
a - Generalities
The world production of cashew nut averages 300,000 metric tons concentrated
among few countries : - two countries : India and Brazil produce 64 % of the
world output. - five countries : India, Brazil, Tanzania,
Mozambique and Kenya
account for 95 % of the world production. Production fluctuates from year to
year (550,000 tons in 1974/75 against 260,000 in 1987/88). This decline in production
level is the consequence of the collapse of Tanzania and Mozambique outputs.
The global international almond market for all kinds of nuts i.e. walnut, Brazilian
nut, hazel nut, cashew nut averages 400,000 metric tons in a good production
year; cashew nut almond representing 17 % of the said total.
b - Specificity of the market
Only 5 % of the cashew nut production is sold as cashew nut. The bulk 95 %
is sold after processing to cashew almond. The main importers of cashew nut
almonds up to 90 % of the production are the United States of America, Western
Europe countries and Japan. The United States market represents 50 % of the
said total. It is a fundamental market, which heavily influences the purchasing
price of cashew nut almond. United States market is dominated by Brazil's exportations.
USSR market accounts for 25 % of the world market of cashew nut almond i.e.
20,000 tons (which are equivalent to 83,000 metric tons of cashew nuts). India
is almost the sole and unique supplier of the USSR market on which 40 % of
its production of cashew nut almond are sold.
The USSR market plays a disturbing
part on the world purchasing price of cashew nut almond. Offered purchasing
prices are high when USSR is on the buying market. its absence leads to the
decline of prices and strongly reveals the dominant position held by the United
States market, which share of the cashew nut almond market therefore accounts
for 80 % instead of 50 %.
On Western Europe's market, the percentage of cashew nut almonds among dried
fruits, in general, is insignificant: only 3 % of the total imported dried fruits;
supplied by India (20 %), Brazil (20 %), Africa (60 %); the importers being
West Germany (30 %), United Kingdom (25 %), France (10 %), The Netherlands (25
%), and 10 % for the other European countries. Globally Western Europe countries
import for 10,000 tons per year of cashew nut almonds.
In Asia, the Japanese market is the most significant, accounting for 4 to 5
% of the world market of cashew nut almonds i.e. 3 to 4000 metric tons per year.
c - Selling prices and trend
The international selling prices of cashew nut and cashew nut almond depend
on two factors :
| - The comeback on
the market of countries like Tanzania
and Mozambique. - The increase of planted areas in India and Brazil. |
The combination
of these two factors may lead to an increase of the available tonnage from 400,000
metric tons (1984) to 600,000 in the early 90's; which means a 100 % of almonds
tonnage (70,000 to 145,000 tons per year). The availability on the market of
such quantities of both products has, doubtless, a negative impact on the selling
prices. We should bear that in mind when undertaking the rehabilitation of our
cashew nut plantations.
In addition, as explained above, the USSR's market
plays a disturbing role; under its influence, the international purchasing price
of cashew nut almond goes through wide fluctuations in the range of +/- 20 %
in average. And above all, one should also remember
that cashew nut almond is considered by consumers as a top class almond - quite
a luxury - in comparIson to other kinds of nut almonds.
Its selling price is quite the double of the others, which are evidently more
competitive on the international market of almonds.
Offered prices for cashew nuts depend on their origin (production countries).
For India, prices fluctuate between US dollars 1,188 and 1,012; for Mozambique
330 and 315; for Guinea Bissau
they average US dollars 700 per metric ton free on board (FOB).
d - Cashew nut and almond prices
comparIson
The technical yield of the transformation of cashew nut to almonds being 0.21
(plus almond balm), it is necessary to check the profitability of the operation
before undertaking it; to know if it is better to sell bulk cashew nut or almonds.
Table below gives the various categories of marketable cashew nut almonds (in
kg - second column) obtained from one ton of cashew nut and their value in US
dollars (last column):
| Whole white |
63
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286
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| Scraped white |
42
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181
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| End pieces and crackled white |
38
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156
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| End pieces scraped and crackled white |
25
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85
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| White morsels |
25
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80
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| Scraped morsels |
17
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47
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| CNSL oil or cashew balm |
70
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21
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That
is to say from one ton of cashew nut, which value is US dollars 700 for instance,
one obtains 280 kg of products priced US dollars 856 on the market.
The processing will yield profits if the raw material (cashew nut) purchasing
price is below the international offered price.
TOP
B - THE MINOR AXIS
B
- 1 - Medicinal and bio-active plants
Good and top quality medicinal plants are more and more requested by professionals
in Europe and America. There is an opportunity to enter the market but only
if cultivation contracts are signed with the leading international importers
and users; with specified conditions concerning variety stability and performances,
phytosanitary treatments. A methodical organization shall be necessary to enter
the market.
B - 2 - Flowers and fragrance plants
Here is a sector with tremendous opportunities to have a share of the pie,
producing a large spectrum of aromatic or essential oils for the international
market. The reforestation policy should be undertaken, planting trees species,
which could be used as raw material for the production of aromatic oils. The most
promising speculations are essential oils from : geranium, citronella, lemon
grass or sweet calamus, eucalyptus.
B - 2 - 1 - Product definition
Essential oils are composed of aromatics from fragrant, odoriferous and sweet
scented plants. They are chemically different from "stable oils" described in
the chapter concerning vegetable
oils and fats of part - 1
of this scheme.
Essential oils are generally volatile in water steam. This physical property
being largely used to extract them from plants. They exist in a great number
of plants' parts: flowers, leaves, roots, wood, bark, grains. Each type of essential
oil is a complex mixture of many chemical constituents - some rare time two
or three - but often more than a hundred.
B - 2 - 2 - Utilization
Many industries make use of essential oils:
| - The industry
of perfume for ambiance and atmosphere. - The industry of fragrance for soaps, detergents, paints and rubber manufacturing. |
Both categories
of utilization stand for a great percentage of the world production of aromatic
or essential oils.
But other areas of utilization are rapidly developing:
| - The industry
of cosmetics (hair lotion and tonic, make-up and body care). - Food industry (beverages, milk products, sweet in general, tobacco aromatization). |
B - 2 - 3 - International market
The main consumption areas of essential oils are: Europe, The United States
of America and Japan. Seven multinational companies dominate world wide the
production and distribution of essential oils :
In Europe, QUEST, a subsidiary company of UNILEVER is the most important. ROURE
BERTRAND DUPONT (France); GIVAUDAN (Switzerland); HAARMAN and REIMER (West
Germany) are also great dealers in the international trade of essential oils.
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INTERNATIONAL FRAGRANCE and FLAVOURS dominates the USA's market. /
In Japan TAGASAGO is the leader.
These big corporations and several other small ones purchase semifinished or
finished essential oils from a great number of specialized production companies;
many of the later are in France (in the region of the city of Grasse); and
numerous others in The United Kingdom, West Germany and elsewhere in Europe.
TOP
Let's consider the international
trade of the five most used essential oils
1 - Geranium
Geranium essential oil is one of the most marketed and its components, citronellol
and geraniol, are used for the synthesis and manufacturing of a great number
of high grade and superior quality perfumes. Taking into account all brands
and origins, the world production of geranium essential oil total up to around
400 metric tons a year with a monetary value in the range of 20 - 30 millions
US dollars. La Réunion - an island in the Indian Ocean, a French territory -
produces the best quality geranium essential oil in the world. Its production
level is around 50 - 60 metric tons per year. Second in quality are the North
African countries' productions; Morocco and Algeria together account for 10
to 20 tons; Egypt for around 70 tons. China provides for 100 - 150 tons yearly
of a less good quality geranium essential oil comparatively to the other origins
above mentioned. Kenya and
Tanzania were exporters
some time ago; their share plummeted on the marketplace.
The geranium essential oil produced by the East European countries - USSR included
- is totally used for their internal consumption.
The largest importers are the USA (around 65 metric tons per year); France (95
tons); United Kingdom (20 tons); West Germany (15 tons); Japan (20 tons). East
European countries barter also great quantities. Réunion's superior quality
geranium essential oil is sold around 90 US dollar per kilo; Egyptian origin
one 65 US dollar per kilo; Chinese brand 50 - 55 US dollar per kilo. Prices
fluctuate according to China's production level and sales on the international
market.
The decline of the production in La Réunion and Egypt combined with the increasing
level of the Chinese internal consumption make it possible for a newcomer to
enter the international market of geranium essential oil.
2 - Eucalyptus
Only few of the 400 species of eucalyptus are used to produce eucalyptus' essential
oil. Among those are Eucalyptus Globulus, E. Smithii and E. Australiana, which
are used in the pharmaceuticals' industry. Eucalyptus Citriodora is used in
the fragrance industry as the main source for citronellal. The total world's
production of all categories is around 2,000 metric tons a year; but E. Citriodora
accounts for less than 200 tons. Portugal and Spain are the largest producers
(400 and 200 tons respectively); Brazil, Australia and South
Africa are also large producers. Zaïre
used to be on the market. France is the leading importing country (approximately
600 metric tons per year); followed by the USA (around 300 tons); West Germany
(230 tons) and the United Kingdom (150 tons).
The utilization of eucalyptus' essential oil by the pharmaceuticals' industry
increased steadily over the years, particularly for its constituent cineol.
The Citriodora had not followed the same trend; but with the new tendency to
use natural products instead of chemically synthesized ones, the demand for
E. Citriodora shall increase to produce citronellal. Selling prices of eucalyptus
essential oils increased slowly from US dollar 6 per kilo in 1980 to 8 by 1989;
and as the production cost is rising in Spain, Portugal and Australia, the prospects
for new suppliers are good, particularly if Cinnamomum Camphora is accepted
as a source of cineol for medicinal uses.
3 - 4 - Citronella
Two kinds of citronella's essential oils dominate the world market: the Cympobogon
Nardus from Sri Lanka and the Cympobogon Winteranus from Java. The former produced
exclusively in Sri Lanka. Both are profusely used in the fragrance's industry,
particularly for the manufacturing of soaps, detergents, household and cleaning
products. Two constituents of citronella essential oils: the Citronellal and
the Geraniol are also very used in the fragrance industry. Indonesia is the
leading producer and main exporters of citronella essential oil. But its exportations,
which reached the peak of 800 metric tons in 1986 is declining as home consumption
increased. China exports quite the same quantity as Indonesia. Guatemala is
on the market for 200 tons / year. Brazil and India are also important producers;
but mainly only for their home consumption.
The main importers are Japan (around 180 tons /year); USA (150 tons); France
(140 tons); The Netherlands (140 tons); United Kingdom and West Germany (100
tons each). Selling prices during the beginning of the 1980's were around 6
to 8 US dollars per kilo and hit 10 US dollars in 1987-88; but the competition
of synthesized citronella oil will have a moderation impact on the price evolution.
5 - Lemon grass
Two specimens of lemon grass essential oils dominate the market: the one produced
from the Cympobogon Flexnosus, a lemon grass originated from Eastern India,
and the other produced from the Cympobogon Citratus (Western India); but the
commercial distinction between the two kinds of lemon grass essential oil is
quickly fading. The lemon grass essential oils are directly used in a wide range
of low grade, inferior quality perfume and household products; they are also
the main source for citral which is one of the raw materials used to produce
ionones and vitamins A and E.
Lemon grass' essential oils dominated the essential oils' market over twenty
years but suffered a harsh competition from synthesized essential oils and the
Chinese essential oil made from Litsea Cubeba (another raw material for citral).
There are constant commercial disputes over lemon grass' essential oil because
of the uncertainty created on the market by India, which uses a great portion
of its production (750 tons /year) for its home consumption and exports the
remaining to USSR under barter agreement. Nowadays, the Republic of Guatemala
is the leading exporter (250 tons). China is on the market for 80 to 100 tons
per year. USA and USSR import each around 70 tons per year; the United Kingdom
65 tons; France and Japan 35 tons each; and West Germany around 20 tons.
Selling prices fluctuate according to the quantity of lemon grass essential
oils put on the international market by India. India's brands are sold around
US dollars 17 per kilo against 9 per kilo for Guatemala's brand. Traders are
foreseeing a price increase because of the shortage of the product on the market.
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CONCLUSION
Market figures and related pricing of the several and diversified opportunities
outlined in this paper to illustrate the development scheme are out of date.
A thorough updating will be necessary to make the scheme applicable with great
chance of success. Dr. Quenum
and Associates
- Investment and Business Planners - are
available for further consulting with interested parties (African government,
international development agency, and import /export banks - EximBanks).
However, even with outdated figures, statistics and pricing estimate this delivery is still useful. It is packed with hard to find business development information and technicalities. It can assist African economists and agro-economists devising appropriate schemes. It can be copied and distributed by all means of media as far as credit is given to the Author Dr. Bienvenu-Magloire Quenum |
We are of the opinion that there is no poor African nation. One should erase
that untruth from one's thinking. Underdevelopment and its consequent poverty
are not fatal. Transition from poverty to prosperity is just a question of method,
efficient organization, hard work, rigorous behavior and thinking; and good
political choices. The combination of which will break the vicious circle of
poverty and establish foundations for a prosperity to be enjoyed by every class
of society in any African nation.
Dr. B.M QUENUM.
Investment and Business Planner
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