Agribusiness Profitability and Internationalization Analysis Report

This report presents an analysis of the internationalization potential of Nigerian agribusinesses, drawing on responses from participants in the industry. The report examines the operational history, profitability in the local market, and the perceived benefits and challenges of international expansion. Participants discuss potential strategies for internationalization, including exporting and partnerships, while also identifying key factors that could hinder success, such as infrastructural challenges, lack of market knowledge, and unstable government policies. Recommendations for smoother internationalization include improvements in infrastructure, business environment, and market knowledge. The report highlights the potential benefits of internationalization, such as increased sales, revenue, job creation, and economic growth. The analysis covers various aspects of agribusiness, including palm oil processing, cassava farming, and poultry farming, providing a comprehensive overview of the sector's internationalization prospects and the factors influencing its success.

PARTICIPANTS RESPONSE.
PARTICIPANT 1.
1. How many years has the organisation been operating in this industry?
Ans: 14 years
2. Do you think that the business is profitable enough in the local market?
Ans: the business is profitable but as the economic recession set in Nigeria in 2016, it affected our
earnings drastically. Every household income reduced, higher inflation and cost of doing business went
up which affects our profit margin
3. Do you think that internationalisation can make the business more profitable?
Ans: yes, internationalisation is entering a new market which will give us more sales and increase our
revenue. The bottom line for any business is to generate more sales, increase productivity and earn
more money. Our company is already looking at ways to do this, but it is difficult in Nigeria considering
the infrastructural challenge
4. Do you think the business has potential to internationalise?
Ans: yes but we need to put a lot of things in place. We currently have a country with failing
infrastructure, bad logistics which is very important. To even import or export in Nigeria takes longer
and more expensive than other country. So you need to put a lot of work, design some strategies and
have good infrastructures like increase fleets of trucks, redesign our payment plan and many things. So I
will say we have the potential but we need to work on the potential to be achievable.
5. What are the strategies you want to use for internationalization?
Ans: to be very clear, we have considered a lot like exporting or partnership so that we can produce in
this country but as it stands with our capacity and available resources, exporting is the best. Getting
partners in other countries to ship our products to but in the long run we can embrace technology such
as direct sales using an e-commerce platform
6. What factors can reduce the effectiveness of internationalisation
Ans: there are many factors chief of which is the lack of knowledge about other market which we are
just trying to get. You need to understand the market as well as the customers’ expectations. Also, there
is infrastructure. Everything about successful business comes to good structures, so we need to improve
the infrastructure, get to used to leading technology to market ourselves and track our activities. There
is a lot of barriers now.
7. What are the recommendations for making the internationalization of business smoother?

Ans: I have actually said some of it, infrastructure, improve in business environment, knowledge of the
new market. We also need to improve our strategies to accommodate future business with foreign
markets like increase in productivity, staff training.
8. What other benefits you expect from the internationalisation of agriculture business
Ans: ultimately, going to other market will incr4ease our sales, drive growth and revenues. It will also
enhance our productivity which will also means more job for our people.
PARTICIPANT 2.
Survey Questionnaire
1. For how many years the organization has been operating in this industry?
Our Organisation is over 6 years in the industry but over 20 years on individually level in the industry as
well.
2. Do you think that the business is profitable enough in the local market?
Agribusiness is profitable in Nigeria if done properly.
3. Do you think that internationalization can make the business more profitable?
Yes, international trade will make the business more profitable as you make more money by earning
foreign currency which has more exchange value
4. Do you think the business has potential to internationalize?
Yes, agribusiness has great potentials especially in export of some specific products
5. What are the strategies you want to use for internationalization?
The strategies include;
i. Source for buyers and partners
ii. Identify regulations on trade, food safety and traceability
ii. Collaborate with Laboratories and establish with Government agencies like NAFDAC, SON , NEPC etc
IV. Source for more money from investors and Banks
6. What are the factors that can reduce effectiveness of the internationalization?
i. Unstable government policy
ii. Unstable foreign exchange

iii. Lack of Trade policy to support export of agricultural produce and businesses
iv. Corruption
8. What are your recommendations for making the internationalization of businesses smoother?
i. Reforms to smoothen operations at the different ports in the country (Seaports, air ports etc)
ii. Credits for export of agricultural businesses
iii. Main quality control of produce of entry
iv. Enhance remittance of proceeds from agribusinesses abroad
v. Strengthen the NEPC operations and mandates
9. What other benefits you expect from the internationalization of agricultural businesses?
i. Wealth creation for Small and medium agribusinesses that will provide the stocks for the big
agribusinesses
ii. Create jobs in the Country
iii. Will also balance of international trade
iv. Economic growth and development
v. More funds to government for infrastructure and social investment
PARTICIPANT 3.
What is the nature of your business and how Long have you been in operation?
I am a farmer, and its actually a family business which we have been running for over a decade. We farm
cassava during the rainy season and process it into cassava floor for sale. Sometimes, we sell
unprocessed cassava to wholesale buyers who go on to process it themselves for sale.
Do you make much profit from the business?
Not really, because we are not a big mechanized farm at the moment. We produce just enough for the
local market. Another issue is inadequate infrastructures like the access road to transport the goods out
of the farms and lack of power.
What is the possibility of you making your business international?
I must say there is much potential in cassava farming especially here in our community. This is because
the soil type is good for cassava farming and there is much demand for cassava worldwide both in
Nigeria and abroad. If we are able to access farm loan and expertise, we would be able to produce in
commercial quantity to compete in the local as well as global market.

If you were planning on going international, what strategies will you employ?
I would draw up a business plan that would outline the structure of the farm in terms of size quantity
and quality of yield. Amount of investment needed and a market survey to know the type of cassava to
grow that would meet international standard. The plan will also include compliance with all business
regulations on doing business locally and internationally
What will you consider to be the Barriers of internationalizing small scale businesses like yours?
The competition I would say and the political barrier to access government loans in Nigeria. The issue of
corrupt practices has prevented small farmers like us to access government facilities to grow our
business due to mismanagement. For instance, fertilizers meant for farmers are diverted by middlemen
and sold at a high cost to farmers. Also, farm tractors and machinery are diverted by politicians for
personal use instead of making them available to the farmers. The best cassava yields are also diverted
for personal use. This leaves the farmers in a situation where they are even less capable of producing
enough for the local market.
What do you think might be the benefits of internationalizing your business?
There is a whole lot of benefits doing business at the global level. Business at the global level will access
a larger market for profit as well as the ability to reinvest in my farm. Also, it will create more jobs and
opportunities locally.
PARTICIPANT 4.
We are a partially new agro product company and our business is particularly processing and production
of palm oil. The business is still at an early stage that is less than 5 years old. So we have the desire to
expand in the future as we build up our consumer base. We source our raw material locally and also
distribute our product locally too.
So far we have not been realizing much profit from running the business. The profit after running cost is
still very little and not as much as we want it to be yet. But it is prospective because in as much as the
profit is still very little, it is usually constant and we believe that if we maintain such pace, we will in no
distant time start to see an increase in profit. I will also like to state that profit is slow but sure as low
profit at the initial stage is mainly because agricultural production is very time consuming and demands
a high level of man power. Hence the less profitable in our local trading areas and community. Imagine
an area where you have a few other smaller businesses like mine all struggling to have a slice of the local
market share. Because of this, competition is very high amongst us. We mainly make enough profit to
keep the business moving.
We have been in operation mainly in our immediate market and are making plans to expand to other
areas in Nigeria. We have the potential to internationalize in the future when we have put enough
resource together. Expanding locally is a bit easier to do than going international because of certain

capabilities which we do not have. The international market have a high standard like production
quality, capital, and insight to the foreign market which we are not capable of meeting now.
The most important strategy that comes to mind is business when thinking of making your business
international is becoming and exporter, setting up your business internationally or exporting your
products to other markets. But this will require means like meeting up with standards and technology so
they can be more efficient in production and distribution of products.
Market insight is a big issue for internationalizing our business because we have little knowledge of what
exporting or the international market is like. We also do not have the technology to meet with the
demand and production as well as standardization of produce. Again is the finance. Most small
agricultural business like ours don’t grow beyond a certain point because the only make enough profit to
keep them afloat and may not have the financial resource to establish their business outside the
country. So even if there is a demand now for us to supply products, we may not be able to meet the
demand or standard. Also, the government is not doing enough to support small businesses like granting
them loans to expand operations, and even when they do, they require huge collateral which most small
business owners do not have.
There is no limit to the benefit of taking a business outside your locality and expanding your business
operations. This is because, when you take your business international, it will bring about growth in
ways such as returns of investment, a larger labor force, and more skilled workers who will have to
manage the advance technological machinery used for production. Another aspect you benefit from is
the Brand name. People like companies that are known internationally because it make them feel like
they are buying a trusted, reliable and well-known brand product. Also the business will be exposed to
more challenges that will enable them improve on their product and work force. The company will also
have the ability to make more profit as they expand operation internationally.
PARTICIPANT 5.
1. For how many years the organization has been operating in this industry?
My organization had been into poultry farming for the past ten years. We usually grow more during the
festive periods like Christmas and the Easter period where there is much demand for poultry products.
2. Do you think that the business is profitable enough in the local market?
No longer profitable enough. We do make a profit but not as much as we would like to. There has been
a remarkable decline in profit due to the economic recession. The cost of growing the chickens has
increases which make sales difficult as the customers are not willing to buy at an increases price. For
example, there is an increase in the cost of drugs feeds and fuel to power the light in the farms. These
factors have been a challenge to maximize profit
3. Do you think that internationalization can make the business more profitable?

There is a possibility for every business to produce enough for export if there is access for investment.
The limitations are the inability of local farmers to produce at commercial quantity to the infrastructural
limitations. Additionally, loan facilities are not accessible to local farmers. And lastly, the competition at
the Global level would be against who are able to produce in large quantity and are already even
exporting to Nigeria until to the recent ban on poultry product by the government.
4. Do you think the business has potential to internationalize?
Yes! This is because the demand for poultry meat and eggs is expected to continue increasing due to
population growth and rising individual consumption locally and internationally.
5. What are the strategies you want to use for internationalization?
I will come up with a business plan that would access investment to expand locally and grow the
business to be able to export.
6. What are the factors that can reduce the effectiveness of the internationalization?
The factors that can reduce the effectiveness to expanding my business are poor infrastructure in terms
of power and government support. Lack of loan facilities and government support to farmers.
8. What are your recommendations for making the internationalization of businesses smoother?
I think it is a combination of several problems which makes it hard for businesses to
internationalize. I will recommend, organizations make contacts to foreign countries. This can reduce
the risk in several ways. First of all they provide security, because if the contacts are trusted
partners they can enable the company to get knowledge from them which can be used in the
internationalization process.
7. What other benefits do you expect from the internationalization of agricultural businesses?
New markets...Are key for generating growth for agricultural businesses especially considering the
ability to generate higher profits in foreign markets due to varying price elasticity’s, it might be
possible that the same products can be sold at a higher price if the demand exceeds the supply.