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SME Guide

Setting Up a Profitable Tomato Processing Plant in Nigeria: A Guide

With Nigeria being the largest tomato producer in sub-Saharan Africa, establishing tomato processing plants presents a lucrative opportunity for value addition, import substitution, and export revenues. However, setting up a globally competitive tomato processing operation requires careful planning, sizable investments, strategic partnerships, and robust implementation.

This guide covers key aspects to consider when establishing a world-class tomato processing plant in Nigeria to ensure profitability and sustainability.

Overview of the Tomato Processing Industry in Nigeria

Tomato processing involves converting harvested tomatoes into various processed products like tomato paste, puree, ketchup, sauce, juice, pickled tomatoes, etc. Nigeria’s tomato processing industry holds good potential but currently operates far below capacity.

Huge Tomato Output Yet Low Processing

Nigeria produces about 2.3 million metric tonnes of tomatoes annually, making it Africa’s leading tomato producer. However, only 2% of the output gets processed domestically. Most tomatoes are consumed fresh or wasted. This underscores massive opportunities for tomato processing.

Rising Domestic Demand for Processed Products

With increasing urbanisation and changing consumer food preferences, demand for processed tomato products is rising in Nigeria. Domestic demand for tomato paste has reached 600,000 metric tonnes annually, while local production lags at 400,000 metric tonnes.

High Export Prospects

Increasing global demand for tomato paste and Nigeria’s cost advantages augur well for export competitiveness. With sufficient capacity and quality, Nigerian processors can tap major markets like the EU.

Favourable Government Policy Push

The Nigerian government aims to expand the agriculture processing industry under its economic diversification drive. Tomato processing has been identified as a priority sector. Recent policies like FX easing for equipment imports aim to boost processing investments.

Key Tomato Processing Plant Requirements

Setting up an efficient tomato processing plant in Nigeria requires ensuring various prerequisites are in place. These include:

Suitable Processing Location

The plant should be proximate to tomato farms for easy raw material access. Good connectivity to transport arteries, power, water, and workforce availability determine site suitability. Northern tomato belt states like Kaduna, Kano, and Jigawa work best.

Adequate Raw Material Supply

Reliable access to a high volume of fresh tomatoes at competitive rates year-round is crucial. Contract farming or on-farm aggregation arrangements with farmers can secure supply. Adequate collection centres and cold chains help reduce spoilage.

Skilled Workforce

The plant needs professionally qualified personnel for technical roles like processing technology operations, quality control, maintenance, etc. Investing in skilled manpower development is a must.

Robust Infrastructure

Uninterrupted power, sufficient water, steam generation, cold storage, wastewater treatment, cleaning systems, etc. need provisioning for 24×7 operations. Loading bays, warehousing, etc. enable smooth logistics.

Compliance with Standards

The plant must comply with food safety norms, environmental regulations, labour laws, and other statutory requirements. Relevant quality and export certifications build market access.

Tomato Processing Technology Selection

The capacity, efficiency, and product range of the tomato processing plant depend significantly on the technologies deployed. A suitable tomato processing technology should be selected based on:

Required Output Capacities

The production volumes, i.e., tonnes per day or year, determine the processing line capacity and equipment sizing. Phased capacity expansion plans must also be considered.

Target Product Mix

The desired product portfolio, like tomato paste, sauce, juice, etc., guides technology specifications for peeling, pulping, evaporating, blending, bottling, etc.

Level of Automation

Manual, semi-automatic, and fully automatic tomato processing lines are available. Higher automation boosts productivity, consistency, and labour cost benefits but requires high capital.

Cleaning and sanitation needs

Aseptic processing allows longer shelf life for tomato-based products. But aseptic technologies need complex, high-precision equipment and cost more.

Energy Optimisation

Opting for energy-efficient equipment like steam-based evaporators and optimising plant layouts to recycle heat lowers energy usage and costs.

Water Management

Water recycling systems and minimising water use in cleaning processes through dry cleaning methods optimise utilisation.

Waste Management

Integrating skin, seed separation, and converting waste into byproducts like pectin, animal feed, etc. boosts resource efficiency.

Key Tomato Processing Equipment

Tomato processing plants require installing a range of equipment. Some key machines and systems needed are:

Sorting Systems

Automated sorting lines using weight, shape, size, optical sensors, etc. remove foreign matter and grade tomatoes.

Washing Units

Industrial tomato washers fitted with water jets and cleaning mechanisms hygienically clean tomatoes prior to processing.

Crushers

Crushers break down tomatoes into pulp and separate out the seeds and skin. Hammer and screw-based crushers are commonly used.

Evaporators

Multi-effect evaporators concentrate tomato pulp by removing excess water to produce a thick paste. They use steam heating and operate under vacuum.

Aseptic Sterilisation

Sterilisers using high-temperature steam treatment package tomato puree aseptically to maintain a longer shelf life.

Homogenizers

Homogenizers break down tomato particles into uniform particles with smooth texture and color. They use pressure and turbulence.

Fillers and packaging

Automated filling and sealing systems package tomato products into retail and bulk packs like cans, drums, pouches, etc.

Sourcing Tomato Processing Plant Equipment

While some basic equipment can be fabricated locally in Nigeria, most processing technologies need importation. Some guidelines for importing tomato processing machines:

Assess Leading Global Suppliers

Research and evaluate major international tomato processing original equipment manufacturers (OEMs) for product quality, capacity, energy efficiency, pricing, etc.

Specify custom requirements.

Provide design specifications aligned with your capacity, product mix, degree of automation, waste management needs, etc. to manufacturers.

Evaluate demo units.

Examine demo units of shortlisted equipment at trade fairs or factory visits overseas to assess build quality and performance firsthand.

Leverage Expat Expertise

Work with Nigerian expats with technical expertise in food processing to evaluate equipment and engage with suppliers to get optimal configurations.

Negotiate Favourable Equipment Costs

Leverage competition among OEMs and the bulk purchase of an end-to-end processing line to negotiate economical pricing and payment terms.

Facilitate secure shipping.

Ensure proper packing, shipping insurance, customs clearance, inland transport, and on-site storage of imported equipment with the help of freight forwarders.

Planning the plant layout

An optimal factory layout facilitates a sequential flow of production processes, an efficient man-machine interface, and compliance with hygiene and safety norms. Key layout planning steps involve:

Analysing Process Flow

Map out the end-to-end tomato processing workflow from raw material receiving to finished goods dispatch.

Determining spatial requirements

Calculate the floor area needed for equipment, workers, aisles, control rooms, storage, etc. based on capacities and throughput.

Developing Initial Layout Plans

Use production flow data to make layout sketches indicating the positioning of machinery, utilities, walls, offices, waste zones, etc.

Simulating Material Movement

Analyse material movement patterns and distances using simulation software. Modify layouts to smooth flow and minimise transport distances.

Incorporating regulatory requirements

Ensure the layout adheres to food safety, fire safety, worker safety, and other statutory norms like access, ventilation, sanitary spaces, etc.

Detailing infrastructure plans

Integrate support infrastructure plans for water, power, drainage, lighting, control rooms, etc. with the floor layout.

Provisioning for Expansion

Consider expected capacity increases and provide adequate vacant space to accommodate additional equipment in the future.

Essential Utilities and Support Infrastructure

Ensuring optimal design, supply, and integration of plant utilities is vital for efficient operations. Major utility planning aspects include:

Power Load Assessment

Estimate the power requirement for running all equipment, cooling, lighting, etc. InstallCaptive generation will offset erratic grid supply.

Water Planning

Source adequate water for processing needs and scrubbers. Bore wells and water treatment are required. Rainwater harvesting pits can supplement

Steam Generation

Install boilers and steam generators to produce high-pressure steam for evaporators, sterilisers, etc. Opt for energy-efficient models.

Effluent Treatment

Plan drainage networks and effluent treatment plants meeting pollution control board norms to treat process wastewater.

Cleaning Systems

Incorporate CIP units, pressurised jets, sanitising systems, etc. for efficient cleaning of equipment and floors.

Material Handling

Deploy conveyors, forklifts, cranes, etc. to enable the smooth movement of raw materials and finished products across production.

Warehousing and cold storage

Provide sufficient food-grade warehousing for input raw materials, intermediates, and processed stock. Integrate cold rooms.

Sourcing Raw Material for the Plant

An uninterrupted supply of fresh tomatoes at optimal cost is essential for the plant’s viability. Some effective raw material sourcing models include:

Contract Farming

Enter into contracts with identified farmers to supply agreed-upon tomato quantities as per quality standards and provide agronomy support.

Cooperative Procurement

Engage organised farmer cooperatives to leverage collective cultivation, harvest, and bulk procurement of tomatoes.

Partnerships with Food Markets

Tie up with existing tomato wholesale markets in major growing belts to tap their aggregated supply.

Captive Cultivation

Undertake direct, controlled cultivation of tomatoes on leased farmland close to the plant for steady supply security.

Local Collection Centres

Establish tomato collection points equipped with sorting, grading, and cold storage near key production clusters.

Diversified Sourcing

Adopt a mixed-sourcing strategy across multiple geographies to minimise the risk of localised crop failures or price spikes.

Funding for Setting Up the Tomato Processing Plant

The project requires a sizeable capital investment. Some options to fund setting up the processing plant include:

Bank Loans

Approach banks like BOI, CBN, and commercial banks that provide dedicated agriculture processing loans at concessional interest rates and flexible tenures.

Private Equity

Attract private equity investors looking to fund promising food processing startups by demonstrating project viability and growth potential.

Venture Capital

Venture capital firms investing in agriculture technology can provide capital for innovative tomato processing ventures with scalable business models.

Government Schemes

Leverage government schemes like CBN’s Commercial Agriculture Credit Scheme, which provides subsidised credit for agriculture projects.

Development Finance

Seek loans from development finance institutions like AFDB that support agriculture value chain infrastructure development.

Strategic Partnerships

Form partnerships with foreign tomato processing companies willing to make equity investments to enter the Nigerian market.

Attracting the Right Plant Management Talent

The project’s success hinges greatly on putting together an efficient management team with cross-functional expertise spanning operations, food technology, supply chain, marketing, etc. Some tips to attract the best talent:

Map Key Positions

Define major roles like general manager, operations head, quality control head, agriculture sourcing manager, etc., along with the qualifications and experience levels needed.

Highlight Company Vision

Communicate your vision and mission to inspire and attract talent passionate about driving the growth of Nigeria’s food processing industry.

Offer competitive salaries.

Offer remuneration benchmarks comparable to similar roles in major consumer food companies to hire qualified professionals.

Recruit across channels

Leverage professional networks, job portals, agriculture university alumni databases, recruitment firms, etc. for a strong candidate pipeline.

Assess Capability Fit

Beyond formal qualifications, evaluate each candidate’s problem-solving skills, leadership potential, integrity, passion, and cultural fit with your organisation.

Create a stock option plan.

Offer senior hires employee stock options with a vesting timeline to incentivize their long-term association.

Implementing food safety and quality assurance

Adhering to stringent quality and food safety norms is imperative for winning customer trust and access to export markets. Key elements include:

HACCP Implementation

Implement a Hazard Analysis and Critical Control Points (HACCP) system for science-based control of physical, chemical, and biological hazards.

Block Contamination Entry Points

Prevent contamination through airlocks, sterilisation zones, elimination of metal-metal contact, restricted material movement, etc.

Lab Testing

Set up an in-house lab for microbiological testing of raw materials, processing environment and finished products to ensure safety.

Certifications

Secure internationally recognized certifications like FSSC 22000, ISO 22000, SQF etc to demonstrate compliance with global food safety standards.

Quality Control Automation

Deploy automated systems and inline sensors for continuous monitoring of process parameters like temperature, pressure etc.

Hygiene Protocols

Institute testing-based cleaning procedures, sanitization schedules, pest control, personal hygiene rules etc to maintain stringent hygiene levels.

Product Traceability

Implement batch/lot coding, and labelling systems to enable tracing product history across the value chain. It helps quickly isolate and recall tainted batches.

Strategies for Product Marketing and Distribution

An optimal sales and distribution strategy is key for the processed tomato products to reach target consumer segments across Nigeria and export markets.

Brand Development

Create a distinct tomato product brand conveying quality assurance, nutrition, taste etc through packaging design and targeted promotion.

B2B Marketing

Business marketing involves appointing distributors, pitching to food companies and retailers, participating in trade fairs etc to build wholesale product offtake.

B2C Marketing

Promote the brand directly to end consumers via digital campaigns, social media engagement, contests etc to drive product trials and pull demand.

Modern Trade Linkages

Forge supply contracts with large modern retail chains rapidly expanding their presence in Nigerian cities offering branded shelf space.

Traditional Channel Partners

Appoint area distributors, wholesalers and dealers with networks across wet markets, kirana stores etc to ensure wide product availability.

E-Commerce Platforms

Listing products on leading e-commerce sites like Jumia, Konga generates additional online sales, especially for niche premium product variants.

Export Market Development

Register with trade promotion bodies like APEDA and participate in international food fairs in target export countries to build market linkages.

Steering the Tomato Processing Project to Success

Some key steps that can help steer your tomato processing business to success include:

Iterative Project Planning

Adopt agile methodologies by dividing the project into small milestones, piloting via minimum viable plants, and scaling gradually based on empirical learning.

Building farmer linkages

Invest significant time to educate, train, and build trusting relationships with tomato farmers to secure their loyal supply commitment.

Automation in Phases

Pilot with manual or semi-automatic lines to stabilize operations and scale cautiously to high automation levels to optimize productivity without sacrificing control.

Talent Development

Set up a dedicated training centre and implement a skilled workforce development program right from the construction stage to create a talent pipeline.

Cost Leadership

Continuously optimize production processes, source strategically, minimize wastage etc. to achieve lowest costs and competitive pricing power.

Differentiated Products

Keep innovating to extend product lines with value-added offerings like convenience packaging, organic variants etc. to access premium segments both locally and overseas.

Conclusion

The tomato processing industry in Nigeria holds strong potential for value addition, import substitution and profitable exports given the huge local output. This guide covers key aspects like plant infrastructure, funding, talent and technology sourcing, quality assurance and marketing strategies for establishing a successful tomato processing plant in Nigeria.

With appropriate planning and robust execution, tomato processing promises to be a sustainable and rewarding business opportunity. By delivering quality products, Nigerian processors can play an influential role in developing the nation’s agro-processing sector.

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