HomeNigeriaHow to Start a Charcoal Business in Nigeria

How to Start a Charcoal Business in Nigeria

The charcoal business is very lucrative in Nigeria. The charcoal business is more profitable when you are exporting your charcoal to other countries. Charcoal is a beneficial fuel because it makes a long-lasting smokeless fire. Charcoal has several uses, some of the most common uses in Nigeria are:

  • Charcoal can be used as a teeth whitener when used to brush your teeth, 
  • Charcoal can be used when curing a person that has ingested poison through the mouth,
  • Charcoal can be used to treat skin-related issues,
  • Charcoal can be used for cooking.

Charcoal is very important for cooking especially in the rural parts of Nigeria. The charcoal business is profitable in Nigeria because you can sell to several places like households, restaurants, barbecue shops and so on.

The amount of capital you will need to start a charcoal business in Nigeria depends on if you want to start on a large scale or a small scale. The amount of capital you will need also depends on if you want to be a wholesaler of charcoal, a retailer of charcoal or a distributor of charcoal in Nigeria. 

To start a charcoal business in Nigeria either as a wholesaler, retailer or distributor of charcoal you will need a starting capital from NGN 200,000 – NGN 1,000,000.

The charcoal business in Nigeria is capital-intensive and many Nigerians tend to stay away from the charcoal business because they may not be financially buoyant.

Charcoal does not have a fixed price in Nigeria. Charcoal can be cheaper in some states such as Benin, Oyo, etc because charcoal is mostly produced in those states in Nigeria. 

Types of Charcoal in Nigeria 

The different types of charcoal are mainly determined by their different sizes. These types of charcoal are suitable for international trade as well. There are three main charcoal types in Nigeria and they can be produced both locally and industrially, they are:

  • Restaurant charcoal 
  • Barbecue charcoal 
  • Shisha charcoal 

Restaurant Charcoal 

This charcoal type is usually 4 mm and above. It can be made from a hardwood tree or a softwood tree.

Barbecue Charcoal

This charcoal type is usually less than 4 mm in size. It can be made from a hardwood tree or a softwood tree.

Shisha Charcoal 

This charcoal type comes in a cylinder shape. It can only be made from a hardwood tree.

Charcoal Production in Nigeria 

The charcoal business is one of the most profitable businesses anyone can start in Nigeria today. Charcoal can be produced locally at a cheap amount in Nigeria as long as the required wood is available. It also requires a lot of personal labour with free and natural tools and equipment and everything can be done without spending a lot of money.

Some of the tools and equipment used for the local production of charcoal include:

  • Sand 
  • Leaves
  • Shovel

There are some advantages and disadvantages when it comes to the production of charcoal locally. The advantages are:

  1. There is a high chance that you can produce high-quality charcoal.
  2. The tools and equipment that are used for the local production of charcoal can be gotten for free.
  3. It gives you room for temperature regulation during the process of production of charcoal.
  4. It can help to maximize your profits.

The disadvantages are:

  1. It requires a lot of labour.
  2. You can only produce limited types of charcoal.

Charcoal can be produced industrially as well in Nigeria. The steps that are involved in the industrial production of charcoal include:

  1. Charring the wood. In this step, manufacturers use either the kiln\batch method or they use the continuous method. 
  2. Coal carbonation 
  3. Briquetting
  4. Bagging

Charcoal Companies in Nigeria 

There are a lot of charcoal companies in Nigeria today. Here are some Charcoal Companies in Nigeria:

  • Dotwan Ventures
  • Anamelo Limited 
  • Kausraaq Nigeria Limited Industry 
  • Eighteen O Six Nigeria Limited
  • Banmark International 
  • Librazain Enterprises 
  • Ladayo Global Services 
  • Jolasbakk Ventures Nigeria 
  • LULI Logistics Nigeria Limited 

Charcoal Stove

Charcoal stoves are lightweight and portable. All the charcoal that is required for the cooking process is filled in a container and then lit when starting the cooking process. The heat emitted from the burning charcoal is mainly transmitted through radiation, this means that the cooking pot has to be placed close to the burning charcoal.

A lot of traditional charcoal stoves are made from scrap pieces of metal without the option to regulate the burn rate of the charcoal and most of the time they are made without pot-resters which means that the pot sits directly on the charcoal, this eventually leads to high release of lethal carbon monoxide.

Charcoal stoves could be improved when it comes to durability and better use of heat. Air is the major agent that controls the burning of charcoal. To regulate the heat from the burning charcoal the airflow has to be adjustable.

The average cost of charcoal stoves ranges from NGN 5,000- to NGN 40,000.

Charcoal Export in Nigeria 

The charcoal business is very profitable in Nigeria and a person can make a lot of money exporting it to other countries that depend on it for different reasons from Nigeria. The charcoal business is more lucrative if you’re involved in exporting it to other countries such as the United Kingdom, Belgium, Greece, Spain, some Asian countries and so on.

A person might not be able to run a successful exportation business in Nigeria without getting their business registered with the Corporate Affairs Commission (CAC) and their exportation business registered with the Nigeria Export Promotion Council (NEPC). After registering you can start to search for reliable charcoal suppliers. Once your business is registered and you have been able to find your charcoal suppliers, you need to find buyers of exported charcoal. You can find some international buyers on online platforms. 

Nigeria is known to have unlimited access to charcoal because of its widespread forest areas. The charcoal export business involves the movement of charcoal from an area that has unlimited access to coal to an area that has a high demand for the product for several important reasons.

Charcoal is used as an ingredient in some kinds of toothpaste. Charcoal is also used in some cosmetics.

International trade is not the easiest thing to do which means you will require advice from experienced exporters of charcoal to help you avoid mistakes. If you’re a beginner in the charcoal business you may find it challenging. It is good to do your research and have an idea of what you are getting involved in and prepare yourself for the risk.

As an exporter of charcoal in Nigeria, it is your job to find quality charcoal, search for buyers in foreign countries and convey the charcoal to them while you receive payment from them for your goods and services.

Foreigners buy charcoal for several reasons and they usually pay a huge amount of money for charcoal. Most of the Asian and European countries have very long and cold winter seasons, so to keep warm they make use of charcoal because it is a lot cheaper than paying electricity bills. Nigerian charcoal is in high demand because most of the charcoal is made from hardwoods which are long-lasting and give off more heat than charcoal made from any wood type.

Companies require charcoal to make gas masks because charcoal absorbs poisonous fumes and gases naturally. Companies that manufacture gas masks require large quantities of charcoal. 

Is Charcoal Exportation Banned in Nigeria?

In Nigeria, there is currently a ban on the production of charcoal for exportation. However, local production of charcoal is still allowed. This ban was placed as a way to curb deforestation and to reduce the climate change impacts that are already threatening the livelihoods and survival of people. The destruction of forests for the production of charcoal leads to the decrease of forest resources and it is a cause of climate change.

How to Start a Charcoal Business in Nigeria in 2022? Write a Charcoal Business Plan

Before starting any business you need to have a business plan. Having a business plan for your charcoal business is very important especially if you are going into the charcoal business in Nigeria as a wholesaler or an exporter of charcoal. Having a good charcoal business plan will help your business be on the right track when you finally start. If you are starting as a retailer, you do not necessarily need to have a business plan as long as you have done enough research. 

Locate Markets for Charcoal:

After making your charcoal business plan, you should find a reliable charcoal supplier near you if you are starting your charcoal business in Nigeria as a wholesaler or an exporter. 

Raising Funds for your Charcoal Business in Nigeria:

Getting capital for your charcoal business is very important. You must have the funds to start up your charcoal business in Nigeria. 

Register your Charcoal business: 

You will need to register your charcoal business in Nigeria under the Corporate Affairs Commission (CAC). This is to assure that your charcoal business runs legally and smoothly.

Find a Good Location for your Charcoal Business in Nigeria: 

The location of your charcoal business will determine whether you will make profits or losses in your charcoal business in Nigeria. When choosing a location, you have to pick an area where the people there can not afford gas or electricity. Your business location has to be in a rural area.

Advertise your Charcoal Business: 

You could create a website for your charcoal business or you can create an account on any online platform to advertise your charcoal business. You can also advertise using signboards, flyers, posters and so on.

Investing in the charcoal business in Nigeria is a very good and profitable idea. Charcoal can last for long periods without getting spoiled. Charcoal is as important as any other cooking agent, especially in rural areas. The charcoal business can stand the test of time.

The charcoal business in Nigeria is very profitable if you are willing to work hard. If your charcoal business is done well it can take care of all your personal needs and family expenses. 

Jakub Borowiec
Jakub Borowiec
Financial markets enthusiast. I studied management at the University of Economics in Wroclaw.
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