As a Commercial Operator, If you have set up your Cassava chips or Garri processing facility in an area with many local processors, I will advise that you engage some of those locals as co-operators in your factory rather than contending with them. This is very crucial especially when you are targeting same market with them.
This is the only strategy that will guarantee your business sustainability until you are able to put in place efficient machines that will put your at pace or above them in terms of cost control. And considering the huge cost of energy and its implications on production cost as applies to Garri and Chip processing, engaging machines to get competitive edge is still yet unrealistic in this our environment.
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For instance; as a commercial Garri processor, until you are able to strategically deploy even your effective garri fryer(s) for usage in such a way that your output value covers and overwhelms your operational cost (which is largely impact by energy cost), your race in same market with local processors is still a struggle. Same applies to deploying a dehydrator for cassava chips Processing without good energy cost control. You will just realize that your total product cost (without margin) is even above the price these locals are offering to sell their own product.
I have once told a story of how changing of my paid manual garri fryers into profit sharing partners helped established my feet at Kajola. I sponsor the purchase of tuber, firewood and other needed materials and they take charge of the manual frying without being paid as a daily worker. I eventually take all the products from the factory at 5-7% below market price. With every material and other production costs calculated and additional charges added as the used facility charges. Total expended cost is removed and returned to me from the total value of goods (already transferred to me 5-7% below market price). It is the left margin that we eventually share among ourselves 3:1. They take 3 parts of the left margin and share among themselves while I keep 1 part as my own profit.
This same method could also be applied for workers engaged for manual drying of cassava chips rather than giving them daily payments. The process can be tweak here and there to suit a particular purpose or operational area. What this does to the commercial Processor is that it helps share the cost burden also with manual workers engaged while it also compensate for the extra efforts put in by the locals engaged by way of profit sharing.
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For Processors who might see this model as complex or inpracticable, I advise that you seek for high end markets away from same markets already dominated by the locals. The truth is that you can not process the way they do and be able to compete with them in same market. The difference in those costs they have been able to cover through self labouring with their sweat is what they will use as an advantage over you.
And with your deployment of mechanical garri fryer(s) in case of garri production and mechanical dehydrator in case of Cassava chips production, I do advise that you calculate and apply your energy cost tightly.
Kazeem Lamidi
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