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The Global Charcoal Market Trend

The global demand for charcoal, estimated at $5,882.8 million in 2018, is expected to reach $6,566.5 million by 2024, with a CAGR of 1.9 per cent between 2019 and 2024.

The Middle East & Africa area is expected to see the highest growth in the industry during the forecast period. This can be primarily due to growing demand for barbecue charcoal and rising urbanization throughout the country. According to the United Nations Environment Program (UNEP), almost 40% of the energy generated in Africa comes from fuelwood and charcoal. Besides, carbon dioxide is used as a filtration agent to extract oils, pesticides, salts and hazardous chemicals from the air and water in the area. As a result, the many end uses of charcoal are expected to drive the growth of the charcoal market in the area in the coming years.

Dynamics of the global Charcoal Market

The main trend identified in the charcoal market is the increasing popularity of barbecued food, due to a shift in lifestyles and the introduction of new types of cooking. Increased consumption of barbecued food, highlighted by a live cooking environment, complimented well by a lively atmosphere, a wide range of buffets and great music. The food available in barbecue restaurants includes slow-cooked pork shoulders, briskets, chicken thighs and spare ribs. As a result, the number of these restaurants is rising rapidly in emerging economies, such as India and China, which are boosting the popularity of barbecued food.

One of the primary drivers of the charcoal market is the growing use of fuel in recreation cooking, especially for barbecue and barbecue applications. Growing understanding of a healthier lifestyle and evolving people’s food tastes result in increased consumption of food that is grilled or barbecued, which, in turn, increases the demand for charcoal as cooking fuel.

The expected replacement of coal with charcoal in the production of silicon, to mitigate carbon dioxide emissions, is a lucrative growth opportunity for players operating in the charcoal industry. Companies including Elkem ASA and Simcoe Operations Pty. Ltd. are still using charcoal in its production processes, and research is being conducted on the related technologies to fully substitute coal with charcoal, without affecting the quality of the product.

Charcoal Business Strategy

Charcoal is a very useful fuel for household and industrial usage and has been in use since man began making food. It is the product of unfinished or partial combustion processes, primarily from wood. Typically, it is produced by burning wood from some trees. The method of burning is carried out in a regulated environment with little air supply and a calculated amount of time determined by the manufacturer. Most of the wood used for this activity is obtained from trees of the general group known as hardwoods, primarily found in the North-Central States of Nigeria. Its demand as a source of fuel in Nigeria has remained almost constant over time, for the following reasons.

• It’s cheaper to purchase than other household fuels like kerosene and cooking gas.
• Charcoal cooks Food quicker than kerosene.
• It does not stain black carbon soot cooking pans.
• Its supply is reliable, unlike the supply of other fuels which have unreliable supplies due to factors such as delays in importing or actions taken by local marketers.
• It can be locally sourced and almost anywhere in your location, unlike kerosene and gas, which require special stations or plants to store and sell.
• It can be prepared locally as opposed to kerosene and gas that go through a complex refining phase.
• Several special forms of cooking cannot be done properly and historically without the use of charcoal. This involves typical outdoor grilling and barbecue or roasting of corn and plantain.

Charcoal is a fuel with high demands, particularly in big cities like Abuja, Lagos, Port Harcourt and Kano. It’s because a lot of people in this town eat a lot of roasted food such as roasted cod, corn, plantain and all other kinds of barbecue. Most foreigners in these cities, particularly Italians, find the use of charcoal very essential because they use it to prepare most of their local recipes.

The Business Opportunity

The business opportunity to sell charcoal stems from the fact that, despite its high demand in the cities, its supply is still limited because the manufacture of charcoal is almost impossible. In the citations, there are virtually no tresses to be cut or burned, which means that almost all of the charcoal that is heavily consumed in the citations comes from nearby rural areas. Looking at this, one can already see a market potential in the supply of charcoal, which essentially means going to rural areas, purchasing and selling in towns.

How to go about Buying and Selling charcoal to make money.

The following are the necessary steps to take into consideration when thinking of starting the charcoal business:

Find Interested Buyers by:

• Visiting hotels to find out what their needs for charcoal are.
• Visiting big stores and shopping malls like ShopRite, Amigo (Now 4U supermarket) to find ways of becoming their supplier.
• Visiting several restaurants, especially foreign ones like Chinese and Italian restaurants.

Get a stand or shop in the market where you can offload and sell directly to customers.

Carry out general marketing of your business.

Locate areas where corn, plantain and fish are roasted and ask them if you could supply them with charcoal.

Package your product in small sizes properly sealed because of its dirtying nature and need to keep away from moisture.

Charcoal Business Summary

In summary, this market is all about buying, shipping and selling charcoal. A dealer purchases charcoal from rural areas near Towns makes plans to move it to the city where he sells to customers. The basic steps to carry out the charcoal business are:

• Inquiring about where to buy, ideally rural areas within a 200 km radius of the city. This can be achieved by visiting these areas and by performing the requisite investigations. If you’re in Abuja and you want to do this business, Nasarawa, a town about 55 kilometres from Abuja, should be the right place to buy.
• To ask the producers/sellers to know the right time to purchase.
• Having ample start-up capital available. The sellers don’t sell on credit, and you’re more likely to buy from a lot of sellers to make up the total quantity you need. It’s a cash trade.
• Actively searching for quality and cheap charcoal to buy. By eye inspection, you can select the ones which are lighter in colour because they have higher carbon content. Knowledge of the type of tree from which it was made is also very essential.
• Payment is not usually a problem because a lot of money is not generally involved in this business so that payments can be made on the spot immediately after purchase.
• Making plans for transporting the charcoal includes hiring a suitable truck or pick up from the nearest location to the point of purchase. Most of the sellers are situated along the main roads, so it’s easy to pick up the charcoal bags as you drive along.
• Supply to consumers who have already reported their interest.
• Storage should be away from water.

Who can do this business?

Government staff, students, teenagers, school leavers, bankers, investors, supply chain managers, paid-for employees, pensioners, entrepreneurs, everyone interested in making a financial breakthrough the establishment of a profitable Charcoal business.

When to do this business

The Charcoal business can be done anytime of the year. However, it is best done during the summer

Where to do this business

The charcoal business can be done anywhere; however, we recommend doing this business in the big metropolitan cities and doing on a large scale.

Who to know

The best people to connect with are buyers, sellers, transporters, and local producers

Start-Up Capital

Recommended start capital for this business is between $100 – $2000, and now this depends on your region and location.

Returns on Investment

100 per cent-600 per cent (depending on the initial capital and the form of the purchaser). The price of a bag of charcoal in rural areas is approximately $50. The bag can be repackaged in 7 smaller bags sold for $25 each. So basically a bag that was purchased is sold for $75. That’s a benefit of $20 per bag without transport or other logistics.

Business registration/company name

This is not required for this kind of business, especially when you’re starting on a smaller scale; however, should you wish to expand, you can learn more about it.

Where to stay

You can stay at a hotel in the town where you travelled to make purchases. However, most of the time, buying and shipping can be finished in one day, so there is little to no need to stay in a hotel.

Demand

The charcoal market has always been heavy all year round, particularly during festive seasons and periods when kerosene and cooking gas are scarce. Typically, demand has remained stable over a long period.

Price Negotiation

Price deals should be achieved based on the current market value and the buyer’s negotiating power. There are no fixed prices imposed.

Transaction completion period

Buying: this requires a minimum of 1 day, depends entirely on the purchaser’s price cap and the proximity to the sellers or producers. If he/she came from a distance, he/she does not want to stay wherever he/she is going to stay for too long, so it depends to a large degree on the buyer. It is advisable to find buyers closer to cities (less than 200 km away)

Selling: requires between 1-2 days determined by the market price goal of the trader and the volume of charcoal originally bought.

Where best to buy/Location of Charcoal Producers

You can get the best charcoal in rural areas with a 200km radius to the major city or visit.

Storage

Charcoal is fuel and therefore should be safely stored from any moisture or other fuel and from any fuel that may cause it to burn.

Business risks

Business is a risk they say, and all businesses have risks. Still, the ability to identify them avoids the ones that need to be avoided or take calculated risks makes one successful. Here are some identified risks:

• Be careful not to be scammed in any way.
• Make sure the charcoal is of good quality with high carbon content, from a good type of hardwood and is properly prepared.
• Be extra careful not to make any transactions over the internet or phone, visit the sellers or producers to make your purchase.

Security and safety tips

• As much as you can, avoid night trips
• Don’t move around with cash all the time
• Use the hotel,  when possible
• Always use the banking hall for your payments

Three Reasons to Start Charcoal Business

The business is profitable: unlike some other companies that you need to operate for a month or even a few years before you start seeing profits, you can start a charcoal business and start making profits almost instantly, because of the high demand for charcoal products. Also, you’re going to make sales all year long, particularly during the winter, because making charcoal is not a seasonal company.

Easy to Start: You don’t need to undergo any rigorous training to start this company; basic knowledge of how to burn wood to become charcoal is all you need to do to start this business.

Availability of Basic Raw Material: the basic raw material required to start the production of charcoal is wood; and depending on the type of wood you need, there are enough supplies of wood all year round. Also, the company is not capital intensive; you can start with a small capital on a small scale and turn the company into a larger business venture.

7 Ways to Market Your Charcoal Business

Making your outdoor coal can be a convenient and cost-effective way to fuel your barbecue fire. It can also be a way to make a little extra money on the side with some jobs. When marketed in the right way, you can create a convincing brand of homemade charcoal that people in your region would be interested in buying. To do that, you’re going to have to employ innovative marketing strategies that create awareness and translate into sales.

1. Identify the market: Knowing who is going to buy the product is key to decide how you’re going to deliver the product to them. If you’re selling your charcoal to farmers ‘ markets, you’re going to have to bring marketing materials with you every time you go and consider advertising your presence at events beforehand. If you sell it from your home or local site to people in your town, you can create a more permanent marketing presence.
2. Build a brand, please. Although your homemade charcoal might not be too different from the products of the business, you can set it apart. Offer your charcoal a catchy name and highlight the handmade component. It confers the quality and integrity of the product when consumers see handmade goods. Please make a list of why your product is different. Highlight the posters, brochures and ads as to what these characteristics are. If you’re using an odd method to produce charcoal, mention it. If some of the products you use are special, mention them as well.
3. Highlight the advantages of your charcoal: The chances are that your homemade charcoal would have some advantage over the competition, whether it’s a superior barbecue experience or a product that’s slightly safer or cheaper than the products you’ve purchased. These advantages should be illustrated on any posters, brochures or online ads that you use.
4. Using creative marketing tactics: Common products like iPods can be sold on their “cool factor” alone. Homemade charcoal does not have such luxuries. But exposure will improve the product in several settings. Use activities to show off your charcoal, such as group grilling sessions or barbecue classes that you sell to people in your neighborhood. These events allow you to speak about your charcoal while giving potential buyers an added value.
5. Making the most of online marketing: One of the best things about online marketing is that it’s cost-effective. Post a few ads on Craigslist selling your charcoal using the same techniques as those described above. Craigslist ads are localized so that you can sell people in your region that can come and pick up charcoal orders in person if you’ve created a convincing brand of charcoal, set up a brand Facebook page to attract new customers.
6. Marketing Consultants: As a small business owner, it’s dangerous to assume that you have what it takes to market your brand successfully. Ok, maybe you do. However, in our understanding, there is no replacement for enlisting the services of a trained marketing consultant. Best consultants possess a variety of skills, including the ability to communicate accurately essential brand characteristics of your charcoal company. Without the involvement of an experienced expert, it’s easy to miss out on business opportunities and concentrate your attention on obsolete strategies. As we continue to encounter changes in the charcoal business field, it should be a top priority to expose your approach to the power of a competent marketing professional.
7. Use of low-cost promotional strategies: Collect the email addresses of buyers who stop by your table or drop by your home so that you can send email marketing messages to warn them about the places where you’re selling your charcoal, the advantages of using natural charcoal and tips for using the product. Let customers know when you’ve made a new batch so they can book a bag or two. Create a website or use social media to become a resource people recognize when they need fuel for their barbecue. Add content that describes the process of producing charcoal so that potential buyers can understand the time and types of wood that make your product and the advantages of using it.

Exploring Export Opportunities

Register Your Charcoal Business

For you to be taken seriously as regards exportation, you have to register your business with your country’ corporate affairs. A registered business is 50 times more likely to secure international contracts with multinationals than an unregistered business.

Get a supplier

The next step after registering your business is sourcing for a good supplier, i.e. a direct charcoal producer. This is one of the most important stages of this business; no foreign customer will want to patronize you if he notices that your products are in genuine.

You can get this by searching the internet for trusted charcoal dealers. Please, also endeavor to read reviews from other customers that must have patronized them before.

Source for buyers

You can easily get buyers by registering on websites like alibaba.com and exportersindia.com. Social networks like LinkedIn and Facebook can also go a long way towards landing you, good customers.

Start exporting

This is the last step in the exportation of charcoal from Nigeria, and it involves sending it to your customers in various parts of the world.

Charcoal importation can be done in two ways:

• Free on Board (FOB) basis: This involves the exporter covering the cost of the goods and every other thing till its arrival at the shipping point.
• Cost, Insurance and Freight (CIF) basis: This involves the exporter taking care of the cost of everything, including insurance and transporting the goods to the buyer’s port of destination.

Conclusion

Starting a charcoal business can set you up financially, especially if you do things right. Given the statistics, you will never run out of business; however, sometimes, this depends on your location. In more advanced economies, profitability would require that you start this business on a large scale. Nevertheless, in places like Africa, the terrain is different, and you might easily break even.

Agriculture

Tags: Agricultural business ideas, Business ideas, Charcoal