Bakery business in Nigeria is the largest industry in food processing sector. Bakery products have become very popular throughout the country. Bakery is one of the most profitable food processing business opportunity one can initiate by having owned or rented space. Selecting the right product and proper marketing strategy are the major deciding factor in getting success in the bakery business. According to the demand and financial aspect you will need to choose the specific products for your bakery business.
Bread and biscuits are the most common products but other items like cakes, pastries, cream-rolls, cookies etc. are also very popular in Nigeria. People almost prefer to have fresh products and this nature increased the popularity of bakery products.
BAKERY BUSINESS MARKET OPPORTUNITY
Though, there are sufficient automatic and semi-automatic bread as well as biscuit manufacturing units in Nigeria but there are still a number of people prefer fresh bread and other products from the local bakery. Bakery products are an item of mass consumption in view of its low price and with rapid growth and changing eating habits of people, bakery products have gained popularity among masses. The bakery industry has achieved the third position in generating revenue among the processed food sector. The per capita consumption is very high in industrialized States like Lagos and Anambra. The Biscuits are becoming quite popular in rural areas as well. Nearly 55% of the biscuits are consumed by rural sector.
The market size for the industry is pegged at US$ 4.7 billion in 2010 and is expected to reach US$7.6 billion by 20120. It also mentions that the shining star of the sector remains the biscuits industry, which is expected to outperform the growth of the sector overall. Thus, opening a bakery business is considered as a promising and profitable business venture for new startup entrepreneurs.
LICENSE REQUIRED TO OPEN A BAKERY BUSINESS
In starting a bakery business, you will need to register the business first with CAC – Corporate Affairs Comission. You have to apply for a Food Business Operating License from NAFDAC – National Agency for Food & Drug Administration. You would also require individual licenses for the delivery boy or delivery vehicle. You will need to ensure the compliance of all the fire safety guidelines. Obtain Vat Registration. You also need to have clearance from Pollution Control Board.
BAKERY BUSINESS FINANCE
In initiating a bakery business, you will need to arrange two types of capital. One is fixed capital for setting up the unit and purchasing machinery. Second one is working capital. Hire purchase leasing is available from banks for machinery purchase. You can avail a cash credit or overdraft account to serve the requirement of working capital.
BAKERY BUSINESS UNIT ESTABLISHMENT
It is always recommended to have customized project report in hand. It will help you in arranging finance, preparing the unit, purchasing and installing the right machinery and in another operational aspect. It is better to establish the unit in industrial are where you can arrange worker and transport facility. Before installing the machinery, having a layout plan and implementation schedule are essential.
BAKERY BUSINESS MACHINERY
According to the desired product and production output, you can establish bakery unit by two ways. One is fully automatic setup and another one is semi-automatic setup. Generally for making biscuits, wafer, bread etc following machinery are required:
- Wafer biscuit making machine.
- Butter Mixing Machine
- Sugar grinding machine
- Planetary mixer machine
- Sealing machine
- Working table with S.S./Aluminium top
- Weighing Balance platform type
- Aluminium vessels, Mats, cups, Mugs, ladle, spoons, gloves, etc.
Apart from these, you will need to arrange electrification and water supply.
RAW MATERIAL & PRODUCTION PROCESS OF BAKERY BUSINESS
The major required raw materials are wheat flour, sugar, eggs and ghee. Other items like milk powder, yeast, salt, assorted fruits, baking powder, caramel colour, vanilla, butter, cream, etc. shall be required in small quantity. You can procure all the raw material from local wholesale market. For medium scale unit, you can procure major raw material from direct manufacturer. In establishing a large scale bakery business, you can also setup your own flour mill included.
In making biscuits, The calculated amount of maida, starch, vanaspati, water etc. are mixed in a mixer to form paste. The paste so formed will be poured into pre-heated mould to bake wafer sheet. The other ingredients like sugar, vanaspati, colours, essence are mixed in a planetary mixer to form cream. The cream so prepared will be applied on the sheets to form sand witch. Thereafter the sandwich will be cut into biscuits and packed in pouches.
To make cakes, wheat flour and baking powder along with cream, sugar and ghee are mixed thoroughly till it becomes fluffy. Then mixture of beaten eggs is added to it along with caramel colour and chopped fruits before the mixture are poured into cake pans and baked for around 30-40 minutes. Pastries are made in different shapes like square, rectangular etc. from thick cake sheets, buttercream, jam etc. is placed between layers of cake. The layered cake is then chilled and cut with sharp knife in the required shape and size. Sides of the pieces are iced with buttercream or fudge and topped with finely ground cake crumbs or pieces of fruits or chocolate strips and decorated with proper design, colour and garnish. This is a semi-automatic process, You can also go for a fully automatic bakery business production setup.
COST OF STARTING A BAKERY IN NIGERIA
It is no hidden fact that the bakery business is one of the most lucrative businesses anyone can get into in Nigeria. It is easy to see why a lot of bakeries have emerged in the country over the past 10 years. While some people have made it big time in the industry, some others still find it difficult to find and stamp their feet in the market. The demand for baked products will always be on the rise, so is the need for more bakeries. Bread, cakes, and other bakery-related foods/snacks are rated among the most in demand in the market.
If you are among those that thing starting up a Bakery comes cheap, then you have either been fed with wrong information or have decided to ignore the obvious. Truth is, starting a bakery doesn’t come cheap. In fact, they are among those businesses you venture into with some basic capital.
Don’t get this wrong, you can start a mini bakery for with a low as a hundred thousand naira or even lower, but be sure it might not go beyond the name and level – mini. You will need a minimum of N500, 000 – N700, 000 and as high as N6 million, depending on the size and scale you want, to start a proper and standard bakery in Nigeria.
It is actually difficult to make an exact estimate of how much you will spend when setting up your bakery. This will be based on your personal plan and the type and scale of bakery you are looking a. This post highlights the major things you need and the steps you need to take when starting a bakery business. Based on past experience and people’s testimonies, you will need a minimum of N700, 000 to start a bakery business. On average, one needs to have between N1,000, 000 – N5,000,000 depending on the scale of the business.
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