Shea Butter A Guide to Production and Marketing - AGOA Export ...
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SHEA BUTTER<br />
A <strong>Guide</strong> <strong>to</strong> <strong>Production</strong> <strong>and</strong> <strong>Marketing</strong><br />
Peace Corps Ghana
Peace Corps Ghana Version 1, March 2008<br />
This manual was developed for Peace Corps Volunteers, by Peace Corps Volunteers,<br />
in an effort <strong>to</strong> preserve the knowledge we have gained from working with groups at<br />
the producer level, companies who buy <strong>and</strong> export shea butter, <strong>and</strong> the various<br />
organizations <strong>and</strong> government agencies that you may encounter when working with<br />
shea.<br />
• Sarah Brabeck, PCV Fiang Upper West Region (2006-07)<br />
• Michael Fravel, PCV Hian Upper West Region (20006-07)<br />
• Bill Reinecke , PCV Savelugu Northern Region (2006-07)<br />
• Paul Sari, PCV Tamale Northern Region (2006-07)<br />
• Jennifer Schneidman, PCV Nangodi Upper East Region (2006-07)<br />
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David McNally<br />
APCD/SED<br />
March 2008
Peace Corps Ghana Version 1, March 2008<br />
Table of Contents<br />
1: The Biology of <strong>Shea</strong> ..................................................................................................4<br />
Where do <strong>Shea</strong> trees live?..........................................................................................4<br />
Life Cycle...................................................................................................................4<br />
Cultivation <strong>and</strong> Transplantation.................................................................................5<br />
How <strong>to</strong> Make <strong>Shea</strong> <strong>Butter</strong>..........................................................................................5<br />
A Little <strong>Shea</strong> Chemistry.............................................................................................6<br />
2: Uses of <strong>Shea</strong>..............................................................................................................7<br />
Traditional Products7<br />
Other Traditional Uses of <strong>Shea</strong> butter .......................................................................7<br />
Traditional Non-<strong>Butter</strong> Uses......................................................................................8<br />
Industrial Uses ...........................................................................................................9<br />
3: The <strong>Shea</strong> Market......................................................................................................10<br />
4: The <strong>Shea</strong> Value Chain .............................................................................................11<br />
5: Working at the Producer Level................................................................................12<br />
Group Dynamics ......................................................................................................12<br />
Roles Within a Group ..............................................................................................13<br />
Identifying Your Market..........................................................................................13<br />
Processing Equipment & Machinery .......................................................................14<br />
Cooperative Registration .........................................................................................14<br />
6. S<strong>to</strong>ries from the Field..............................................................................................16<br />
<strong>Shea</strong> <strong>Butter</strong> Extrac<strong>to</strong>r’s Women’s Group: Lessons Learned ...................................16<br />
AN EXAMPLE OF COSTING ...............................................................................19<br />
Break-Even Analysis from a UNDP study based near Tamale ...............................20<br />
7: Supporting Ac<strong>to</strong>rs in the <strong>Shea</strong> Industry/Contacts....................................................21<br />
NGOs <strong>and</strong> Companies Involved in the Ghanaian <strong>Shea</strong> Industry.............................21<br />
Major International Companies in the <strong>Shea</strong> Industry: .............................................21<br />
Local Buyers in Ghana (Nuts & <strong>Butter</strong>) ..................................................................21<br />
8. Appendices..............................................................................................................23<br />
Appendix 1. Value-added <strong>to</strong> selling price of shea butter cosmetics.......................24<br />
Appendix 2. Ghana <strong>Shea</strong> SS MAP (from SNV Ghana)..........................................25<br />
Appendix 3. Traditional <strong>Shea</strong> Processing (adapted from Dr. Peter Lovett). ..........26<br />
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1: The Biology of <strong>Shea</strong><br />
Where do <strong>Shea</strong> trees live?<br />
Ghana is lucky. Ghana <strong>and</strong> Burkina have the best shea butter in the world. Why?<br />
Because the shea nuts here have the most desirable chemical balance, <strong>and</strong> the<br />
traditional processing methods create a very clean butter.<br />
The shaded areas depict rainfall values. The small grey dots show areas of shea trees<br />
(Vitellaria paradoxa) in West Africa. The white dots are a different variety of shea<br />
trees in East Africa.<br />
Life Cycle<br />
As deforestation becomes a bigger problem in Ghana, the availability of shea nuts <strong>and</strong><br />
butter is directly impacted. Bushfires, cutting of trees for firewood <strong>and</strong> destructive<br />
farming methods are all fac<strong>to</strong>rs that affect the availability of shea nuts. Currently,<br />
local people <strong>and</strong> NGOs are more interested in protecting <strong>and</strong> cultivating shea trees.<br />
Underst<strong>and</strong>ing the life cycle of shea is essential <strong>to</strong> the survival of the shea butter<br />
business.<br />
The number of years for a tree <strong>to</strong> reach maturity, <strong>and</strong> therefore produce fruit, is up for<br />
debate, but it is generally accepted <strong>to</strong> be 3-5 years. Many people will argue that it<br />
requires 15 or even 20 years <strong>to</strong> fruit, but ask them how many trees they have planted.<br />
Information on lifespan of shea trees is sparse.<br />
The shea fruit is generally ripe from mid-May through the end of July. There is some<br />
variation due <strong>to</strong> location <strong>and</strong> rainfall. The fruit is edible <strong>and</strong> tasty. Mature nuts come<br />
from fruits that have fallen <strong>to</strong> the ground, so women will forage for fallen fruit, either<br />
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from the farm or any nearby forest. <strong>Butter</strong> processing is usually performed from June<br />
through August.<br />
Cultivation <strong>and</strong> Transplantation<br />
It has not been a common cultural practice <strong>to</strong> plant shea. Even some areas have strong<br />
taboos against planting shea, but families’ financial needs are beginning <strong>to</strong> overturn<br />
those beliefs. You can now find many people who are eager <strong>to</strong> propagate shea. And<br />
here’s how:<br />
The whole process takes time. Usually around 9 months the seedling will be visible<br />
above ground. And after one year, the seedling can be transplanted in<strong>to</strong> the field.<br />
Transplanting should be done during rainy season, so the roots can fully develop<br />
before the dry season.<br />
How <strong>to</strong> Make <strong>Shea</strong> <strong>Butter</strong> *<br />
The shea nut is chock full of so many things- some desirable, some not. So the<br />
harvesting <strong>and</strong> post-harvest processing affect which of those things, desirable or not,<br />
are in the butter. As quality is the key fac<strong>to</strong>r <strong>to</strong> selling shea butter, it is important <strong>to</strong><br />
underst<strong>and</strong> the chemistry behind shea butter. Most women who process shea butter<br />
know all of this practical knowledge, so <strong>to</strong> learn how <strong>to</strong> make shea butter, it is best <strong>to</strong><br />
go watch these local professionals.<br />
Here is a brief summary of the 12 steps <strong>to</strong> make shea butter from harvested shea nuts:<br />
* (see Annex 3 for a more detailed presentation)<br />
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1. Harvest the nuts from the farm<br />
2. Accumulate in piles or pits<br />
3. Heat the nuts – boil (preferred) or roast<br />
4. Dry the whole nuts (if boiled)<br />
5. De-husk the nuts <strong>to</strong> get kernels (usually cracked by h<strong>and</strong>!)<br />
6. Dry the kernels & s<strong>to</strong>re in a secure place<br />
STOP HERE IF END PRODUCT IS NUTS, FOR BUTTER – CONTINUE<br />
STEPS 7-12<br />
7. Crush the kernels<br />
8. Dry roast the crushed kernels<br />
9. Mill or pounded/grind in<strong>to</strong> a paste<br />
10. Kneaded (water-boiled or pressed) <strong>to</strong> form an emulsion <strong>to</strong> separate fats<br />
11. Boil the oil (fat) <strong>to</strong> dry <strong>and</strong> clean by decanting <strong>to</strong> clarify the butter<br />
12. Prepare for use, sale , or s<strong>to</strong>rage (cooled oil will congeal in<strong>to</strong> solid<br />
white/cream colored butter)<br />
Typically the ratio of butter <strong>to</strong> nuts is approximately 3-<strong>to</strong>-1.<br />
A Little <strong>Shea</strong> Chemistry<br />
What are the important chemical components in shea <strong>Butter</strong>?<br />
• Free Fatty Acids<br />
• Peroxides<br />
• Impurities<br />
• Moisture<br />
Free Fatty Acids are undesirable. FFAs cause <strong>to</strong>o much variation in the shea butter,<br />
<strong>and</strong> makes it difficult for production in fac<strong>to</strong>ries. How can we insure less FFAs? Time<br />
<strong>and</strong> heat are both our friends. Producers should select mature nuts instead of unripe<br />
nuts. Women know this, that’s why they forage for fallen ripe fruit instead of picking<br />
them from trees. Heat also denatures FFAs. Boiling is part of the shea butter process,<br />
so it is also important not <strong>to</strong> under boil the butter. Once again, the women know this.<br />
The downside of boiling is an increase in peroxides. Why are peroxides bad? They<br />
denature the antioxidants, which are the natural protection of shea butter. But don’t<br />
fear, most women know how long <strong>to</strong> boil the butter so that the FFAs <strong>and</strong> peroxides<br />
are both minimized.<br />
Impurities such as water, metal, <strong>and</strong> dirt can be difficult <strong>to</strong> keep out. Some<br />
precautionary measures include using sealed containers, taking care when grinding,<br />
<strong>and</strong> filtering butter. A little extra work can go a long way.<br />
Moisture is another enemy. Fungus can easily grow <strong>and</strong> spoil vast amounts of butter<br />
from just a small amount of moisture. This can be prevented by boiling, s<strong>to</strong>ring nuts<br />
in jute sacks instead of fertilizer bags, <strong>and</strong> not adding water <strong>to</strong> the finished butter.<br />
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It may seem like a lot of hard work, but in the end it pays off when you see a<br />
container of beautiful creamy, pure shea butter.<br />
2: Uses of <strong>Shea</strong><br />
<strong>Shea</strong> has so many uses that we turned <strong>to</strong> the experts at Cocoa Research Institute of<br />
Ghana. The following is an excerpt from a case study done in 2002:<br />
The shea nut serves as one of the main sources of livelihood for the rural women <strong>and</strong><br />
children who are engaged in its gathering. <strong>Shea</strong> butter is the main edible oil for the<br />
people of northern Ghana, being the most important source of fatty acids <strong>and</strong> glycerol<br />
in their diet. It is an unguent for the skin. It also has anti-microbial properties, which<br />
gives it a place in herbal medicine. It is also used in the pharmaceutical <strong>and</strong> cosmetic<br />
industries as an important raw material <strong>and</strong>/or a precursor for the manufacture of<br />
soaps, c<strong>and</strong>les, <strong>and</strong> cosmetics. <strong>Shea</strong> butter is used as a sedative or anodyne for the<br />
treatment of sprains, dislocations <strong>and</strong> the relief of minor aches <strong>and</strong> pains. Other<br />
important uses include its use as an anti-microbial agent for promotion of rapid<br />
healing of wounds, as a pan-releasing agent in bread baking <strong>and</strong> as a lubricant for<br />
donkey carts. Its by-products, the brown solid that is left after extracting the oil <strong>and</strong><br />
the hard protective shell, are used as a water-proofing material on the walls of mudbuildings<br />
<strong>to</strong> protect them from the eroding forces of the wind <strong>and</strong> rain. Poor quality<br />
butter is not only applied <strong>to</strong> earthen walls but also <strong>to</strong> doors, windows, <strong>and</strong> even<br />
beehives as a waterproofing agent (March<strong>and</strong>, 1988). In a traditional setting, shea<br />
butter of poor quality is used as an illuminant (or fuel, in lamps or as c<strong>and</strong>les).<br />
Traditional Products<br />
Oil has played an important part in the local economies in west <strong>and</strong> central sub-<br />
Saharan Africa for centuries. It is reported that the initial traditional roles have not<br />
changed significantly since 1830, when the French explorer Roger Caillie described<br />
them during his trek across West Africa. In Roger Caillie’s own words as reported in<br />
Hall et al., 1996, “the indigenous people trade with it, they eat it <strong>and</strong> rub their bodies<br />
with it; they also burn it <strong>to</strong> make light; they assure me that it is a very beneficial<br />
remedy against aches <strong>and</strong> pains <strong>and</strong> sores <strong>and</strong> wounds for which it is applied as an<br />
unguent”. Today the shea tree produces the second most important oil crop in Africa<br />
after oil palm (Poulsen, 1981), but as it grows in areas unsuitable for palm, it takes on<br />
primary importance in West Africa, <strong>and</strong> in regions where annual precipitation is less<br />
than 1000mm of rainfall. However, it loses popularity in urban areas within these<br />
regions due <strong>to</strong> the pungent odor it emits, should it become rancid (Ayeh, 1981b).<br />
Other Traditional Uses of <strong>Shea</strong> butter<br />
As a cosmetic, it is used as a moisturizer, for dressing hair (Dalziel, 1937, Ezema &<br />
Ogujiofor, 1992) <strong>and</strong> for protection against the weather <strong>and</strong> sun. It is used as a rub <strong>to</strong><br />
relieve rheumatic <strong>and</strong> joint pains <strong>and</strong> is applied <strong>to</strong> activate healing in wounds <strong>and</strong> in<br />
cases of dislocation, swelling <strong>and</strong> bruising. It is widely used <strong>to</strong> treat skin problems<br />
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such as dryness, sunburn, burns, ulcers <strong>and</strong> dermatitis (Vuillet, 1911; Bonkoungou,<br />
1987) <strong>and</strong> <strong>to</strong> massage pregnant women <strong>and</strong> small children (March<strong>and</strong>, 1988).<br />
Having a high melting point of between (32-45°C) <strong>and</strong> being close <strong>to</strong> body<br />
temperature are attributes that make it particularly suitable as a base for ointments <strong>and</strong><br />
medicines (Bonkoungou, 1987). It is also used <strong>to</strong> treat horses internally <strong>and</strong> externally<br />
for girth galls <strong>and</strong> other sores. The healing properties of shea butter are believed <strong>to</strong> be<br />
partly attributable <strong>to</strong> the presence of allan<strong>to</strong>in, a substance known <strong>to</strong> stimulate the<br />
growth of healthy tissue in ulcerous wounds (Wallace-Bruce, 1995). It is used as<br />
“white oil” <strong>to</strong> anoint the dead in Niger (Castinal, 1945), <strong>and</strong> is placed in traditional<br />
ritual shrines.<br />
Refuse water from production of shea butter is used as a termite repellent (Dalziel,<br />
1937). In Burkina Faso, shea butter is used <strong>to</strong> protect against insect (Callosobruchus<br />
maculatus) damage <strong>to</strong> cowpeas (Vigna sp.). Research has shown that after treatment<br />
with shea butter a reduction occurs in the life span <strong>and</strong> fertility of the insects <strong>and</strong><br />
hence the infestation rate. <strong>Shea</strong> butter, however, is not as effective as cot<strong>to</strong>nseed or<br />
groundnut oil (Pereira, 1983; Owusu-Manu, 1991).<br />
Traditional Non-<strong>Butter</strong> Uses<br />
The shea tree is sacred <strong>to</strong> many ethnic groups <strong>and</strong> plays an important role in religious<br />
ceremonies (Vuillet, 1911; Millee, 1984).<br />
Flowers, Fruits, <strong>and</strong> Nuts<br />
Some ethnic groups make the flowers in<strong>to</strong> edible fritters (Chevalier, 1949). The fruit<br />
pulp, being a valuable food source, is also taken for its slightly laxative properties<br />
(Soladoye et al., 1989). Although not widespread, shea nut cake is used for cattle feed<br />
(Salunkhe <strong>and</strong> Desai, 1986), <strong>and</strong> also eaten raw by children (Faegri, 1966; Farinu,<br />
1986). The residual meal, as in the case with shea butter, is also used as a<br />
waterproofing agent <strong>to</strong> repair <strong>and</strong> mend cracks in the exterior walls of mud huts,<br />
windows, doors <strong>and</strong> traditional beehives. The sticky black residue, which remains<br />
after the clarification of the butter, is used for filling cracks in hut walls (Greenwood,<br />
1929; March<strong>and</strong>, 1988) <strong>and</strong> as a substitute for kerosene when lighting firewood<br />
(Wallance-Bruce, 1995). The husks reportedly make a good mulch <strong>and</strong> fertiliser<br />
(FAO, 1988b), <strong>and</strong> are also used as fuel on three s<strong>to</strong>ne fires.<br />
Foliage<br />
Leaves are used as medicine <strong>to</strong> treat s<strong>to</strong>machache in children (Millee, 1984). A<br />
decoction of young leaves is used as a vapor bath for headaches in Ghana. The leaves<br />
in water form a frothy opalescent liquid, with which the patient’s head is bathed. A<br />
leaf decoction is also used as an eye bath (Abbiw, 1990; Louppe, 1994). The leaves<br />
are a source of saponin, which lathers in water <strong>and</strong> can be used for washing (Abbiw,<br />
1990). When a woman goes in<strong>to</strong> labor, branches may be hung in the doorway of her<br />
hut <strong>to</strong> protect the newborn baby. Branches may also be used for covering the dead<br />
prior <strong>to</strong> their burial (Agbahungba & Depommier, 1989).<br />
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Roots<br />
The roots are used as chewing sticks in Nigeria, most commonly in savannah areas<br />
(Isawumi, 1978). Roots <strong>and</strong> root bark are ground <strong>to</strong> a paste <strong>and</strong> taken orally <strong>to</strong> cure<br />
jaundice (Ampofo, 1983). These are also used for treatment of diarrhoea <strong>and</strong><br />
s<strong>to</strong>machache (Millee, 1984). Mixed with <strong>to</strong>bacco, the roots are used as a poison by<br />
the Jukun of northern Nigeria. Chronic sores in horses are treated with boiled <strong>and</strong><br />
pounded root bark (Dalziel, 1937).<br />
Bark<br />
Infusions of the bark have shown <strong>to</strong> have selective anti-microbial properties, as being<br />
effective against Sarcina lutha <strong>and</strong> Staphylococcus mureas but not mycobacterium<br />
phlei (Malcolm & Sofowora, 1969). Macerated with the bark of Ceiba pent<strong>and</strong>ra, <strong>and</strong><br />
salt, bark infusions have been used <strong>to</strong> treat cattle with worms in the Tenda region of<br />
Senegal <strong>and</strong> Guinea (Ferry et al., 1974). The infusions have been used <strong>to</strong> treat leprosy<br />
in Guinea Bissau (Dalziel, 1937) <strong>and</strong> for gastric problems (Booth <strong>and</strong> Wickens, 1988)<br />
as well as for diarrhoea or dysentery (Soladoye et al., 1989). A bark decoction is used<br />
in the Cote d’Ivoire in baths <strong>and</strong> therapeutic sitz-baths <strong>to</strong> facilitate delivery of women<br />
in labour, <strong>and</strong> is drunk <strong>to</strong> encourage lactation after delivery (Abbiw, 1990; Soladoye<br />
et al., 1989; Louppe, 1994). However, in northern Nigeria such a concoction is said <strong>to</strong><br />
be lethal, (Dalziel, 1937).<br />
A bark infusion is used as an eyewash <strong>to</strong> neutralise the venom of the spitting cobra<br />
(Soladoye et al 1989) <strong>and</strong> also, in Ghana, as a footbath <strong>to</strong> help extract jiggers.<br />
Greenwood (1929) noted that the stripping of bark for medicinal purposes may have a<br />
severe impact on the health of shea trees <strong>and</strong> may even be fatal. The wood is only<br />
used when individual trees are not valued for butter production. The latex is heated<br />
<strong>and</strong> mixed with palm oil <strong>to</strong> make glue (Hall et al., 1996). It is chewed as a gum <strong>and</strong><br />
made in<strong>to</strong> balls for children <strong>to</strong> play with (Louppe, 1994). In Burkina Faso, Bobo<br />
musicians use it <strong>to</strong> repair cracked drums <strong>and</strong> punctured drumheads (Millee, 1984). It<br />
contains only 15-25% of carotene <strong>and</strong>, therefore, is not suitable for the manufacture of<br />
rubber (André, 1947a,b).<br />
Industrial Uses<br />
Research in<strong>to</strong> the properties <strong>and</strong> potential industrial uses of shea butter began in the<br />
first few decades of the last century. Previously, it was used in edible fats <strong>and</strong><br />
margarine, <strong>and</strong> was only beginning <strong>to</strong> attract the soap <strong>and</strong> perfume industry when<br />
interest ceased because of the 2nd World War. Revival of the shea industry after the<br />
war suffered serious setbacks from an insufficient pricing mechanism, logistical<br />
problems of transport (low availability <strong>and</strong> unpredictable) unable <strong>to</strong> cope with the<br />
supply of the nuts, thus making the ventures economically non-viable. During the mid<br />
1960s shea trade re-emerged when Japanese traders joined their European<br />
counterparts, which saw a considerable expansion of the industry, particularly in the<br />
cosmetics <strong>and</strong> confectionery industry barely a decade thereafter.<br />
<strong>Shea</strong> butter has several industrial applications, but the majority of kernels<br />
(approximately 95%) provide an important raw material for Cocoa <strong>Butter</strong> Replacers<br />
(CBRs), <strong>and</strong> are used for manufacturing chocolate <strong>and</strong> other confectionery. Minor<br />
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uses include cosmetics <strong>and</strong> pharmaceuticals. The export market for CBRs is shared by<br />
Unilever (UK), Arhus (Denmark), Fuji I<strong>to</strong>h <strong>and</strong> Kaneka-Mitsubishi (Japan).<br />
3: The <strong>Shea</strong> Market<br />
The <strong>Shea</strong> Market: Local <strong>and</strong> International<br />
The local <strong>and</strong> international shea markets are two very different buyers with the<br />
international market having strict specifications while the local market uses shea<br />
butter for its traditional uses. These two markets are beginning <strong>to</strong> conflict with each<br />
other as dem<strong>and</strong> forshea butter increases on the international market. As the<br />
international market dem<strong>and</strong> increases, the price of nuts <strong>and</strong> butter in the local market<br />
increases at the same time. The high dem<strong>and</strong>s have made local shea butter <strong>and</strong> nuts<br />
less affordable on the local market creating an interesting situation for local<br />
consumers <strong>and</strong> producers.<br />
The Local Market:<br />
The local shea market exists because of the women of Ghana. There are men who<br />
trade in nuts <strong>and</strong> work in processing but women are the primary pickers, processors<br />
<strong>and</strong> sellers of shea butter in the local marketplace. The majority of shea butter<br />
consumption in Ghana is in the raw form for cooking <strong>and</strong> skin care. Some local shea<br />
butter is processed <strong>to</strong> make soaps that are sold in the market as well. The processors<br />
sell directly <strong>to</strong> the end consumer in the local market. Very little is packaged, labeled<br />
or certified before sale <strong>and</strong> it is sold in small balls or bowls in major markets<br />
throughout the country (Northern regions?).<br />
The International Market:<br />
The world’s biggest international markets for shea butter are in Europe <strong>and</strong> North<br />
America. <strong>Shea</strong> is used primarily for skin care cosmetics <strong>and</strong> for medicinal <strong>and</strong><br />
cooking products. The industry is extremely competitive <strong>and</strong> is dominated by about<br />
six large international companies (see section 7). Supply <strong>to</strong> the major companies on<br />
the international market is typically done by another organization within Ghana that<br />
buys nuts <strong>and</strong> processes butter <strong>to</strong> the specifications of the major buyer. These<br />
contracts are very big <strong>and</strong> have extremely strict quality requirements. Communities<br />
in Ghana generally supply the nuts <strong>to</strong> local buyers who in turn supply the international<br />
companies with bulked shea nuts or butter. There are also certain organizations<br />
buying shea butter from individual communities but st<strong>and</strong>ard quality is a challenge.<br />
Increasingly due <strong>to</strong> corporate responsability, certain companies like Savannah Fruits<br />
Company, although relatively small, have been working <strong>to</strong> attain quality commercial<br />
production while supporting rural women’s groups.<br />
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The number one concern for international buyers is “perceived quality” before price.<br />
For edible products the major market is in Europe <strong>and</strong> India <strong>and</strong> the butter extraction<br />
<strong>and</strong> refining is done there. The major cosmetic <strong>and</strong> soap industry is in the United<br />
States <strong>and</strong> is known as the most lucrative global shea butter market. The majority of<br />
shea butter consumed internationally is mixed in<strong>to</strong> a finished product containing a<br />
percentage of shea butter. The finished products in North America tend <strong>to</strong> have high<br />
tech containers <strong>and</strong> extensive marketing campaigns behind them <strong>and</strong> are high end<br />
products. Less than ten percent is used by the final consumer in its raw form.<br />
<strong>Shea</strong> nuts grow in 20 countries in the world, all of which are in Africa. The <strong>Export</strong><br />
season is from August <strong>to</strong> April each year. It is estimated that 150,000 – 200,000<br />
<strong>to</strong>nnes of nuts are exported each year from West Africa, 50,000 <strong>to</strong>nnes (approx. 33%)<br />
coming from Ghana alone. The nuts are shipped out of West Africa mainly from<br />
ports in Dakar, Senegal, Lome, Togo <strong>and</strong> Tema, Ghana.<br />
4: The <strong>Shea</strong> Value Chain<br />
What’s a Value Chain?<br />
PCVs see shea butter at both extremes. Here in Ghana, we see it in the form of balls<br />
of local butter sold for around GH 0.50. In the US, we saw fancy cosmetic products<br />
sitting on supermarket shelves that sold for around $20. Where is that value added <strong>to</strong><br />
the product? Who is making that profit?<br />
It will help <strong>to</strong> look at the shea butter value chain. A Value Chain includes all those<br />
groups involved at different levels of producing a single product. When considering<br />
shea, the members in a value chain are usually as follows:<br />
Nut<br />
Producers<br />
Nut<br />
Traders<br />
<strong>Butter</strong><br />
Producers<br />
Each member of the chain affects the product. Each member also depends on the<br />
other members of the chain for supply <strong>and</strong> income. A chain is not supposed <strong>to</strong> be<br />
intra-competitive. Instead, the entire chain functions in union <strong>to</strong> compete with other<br />
chains (e.g. in other countries/markets). The value of the product is shared along the<br />
chain, meaning each member of the chain receives some income for their work. That<br />
causes the increase in price from local <strong>to</strong> foreign markets<br />
Strengths <strong>and</strong> Weaknesses of a Value Chain<br />
Although the members of the Value Chain are not intended <strong>to</strong> compete, the system is<br />
not perfect. Each member will have needs that counter the needs of other members.<br />
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<strong>Butter</strong><br />
Traders<br />
Nut <strong>and</strong><br />
<strong>Butter</strong><br />
<strong>Export</strong>ers<br />
Producers<br />
of Food <strong>and</strong><br />
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For example, The butter buyer wants <strong>to</strong> buy butter at the lowest price. Meanwhile the<br />
butter seller wants <strong>to</strong> sell at the highest price. Still there are many benefits <strong>to</strong> a Value<br />
Chain as compared <strong>to</strong> a traditional business relationship. First, Value Chains provide<br />
for better information sharing among all members. A butter buyer will offer quality<br />
feedback or make packaging requests of the butter seller. The butter seller can ask the<br />
buyer for help with transportation. Also, the Value Chain as a whole is competing<br />
with other chains, so the focus will shift from profit <strong>to</strong> quality. If the end result is poor<br />
quality butter, consumers won’t be interested <strong>and</strong> the whole chain will suffer.<br />
As you go up each step of the chain, the level of education, time, <strong>and</strong> other resources<br />
increases. When deciding where on the Value Chain you want <strong>to</strong> be, consider the<br />
level of education <strong>and</strong> resources available <strong>to</strong> the group. It may not be possible for<br />
your group <strong>to</strong> export directly <strong>to</strong> a US company, but maybe you can connect them <strong>to</strong> a<br />
buyer of shea butter, educate producers on quality st<strong>and</strong>ards, provide local producers<br />
with market information, link producers <strong>to</strong> buyers, or help source funding for a<br />
grinding mill or other equipment <strong>to</strong> increase production.<br />
In rural villages, price is definitely the most talked about problem. The most<br />
important thing is <strong>to</strong> account for all costs in the production of the butter <strong>and</strong> cross<br />
check for profit or loss. <strong>Butter</strong> buyers complain more about consistency <strong>and</strong> quality.<br />
At the end of the chain there is a huge fac<strong>to</strong>ry processing chocolate, <strong>and</strong> they want all<br />
ingredients <strong>to</strong> be st<strong>and</strong>ardized. And the occasional stick or dead bug may seem like no<br />
big deal <strong>to</strong> the market women, but L’Oreal will freak out.<br />
5: Working at the Producer Level<br />
Most likely, as a Peace Corps Volunteer, you will be working with Producer Groups.<br />
This section addresses some of the issues <strong>to</strong> consider when working at this end of the<br />
Value Chain.<br />
Group Dynamics<br />
Most communities have women's groups that form <strong>and</strong> come <strong>to</strong>gether for a<br />
variety of reasons, but most likely for economic support. When considering shea<br />
butter processing as an economic venture, forming establishing a well structured<br />
women's group is imperative. As with any group that aims <strong>to</strong> be functional <strong>and</strong><br />
effective in its capacities, certain roles <strong>and</strong> responsibilities must first be designated <strong>to</strong><br />
rightful people in that group. Having proper knowledge of the personalities <strong>and</strong><br />
characters of the group is a great asset in learning who would best assume a particular<br />
leadership role.<br />
Women already have deep relationships with the other women in their communities<br />
<strong>and</strong> know who the natural leaders of the group are. Sometimes, however, members are<br />
elected <strong>to</strong> higher positions of the group based on social st<strong>and</strong>ing in the community<br />
(for example being the wife of a big man in the community) <strong>and</strong> not necessarily the<br />
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leadership skills that would designate her as the right person for the position. This is<br />
a delicate issue, but may require attention <strong>to</strong> ensure the vitality of the group.<br />
Roles Within a Group<br />
Try holding a meeting with interested women in your community <strong>and</strong> discussing the<br />
roles necessary for group management. When becoming engaged in shea processing<br />
with bigger buyers, groups should have at least the following positions <strong>to</strong> help<br />
manage the group:<br />
1. A Chairwoman <strong>to</strong> call <strong>and</strong> facilitate meetings, communicate current<br />
information, <strong>and</strong> guide the larger decisions of the group<br />
2. A Vice Chairwoman <strong>to</strong> assist the Chairwoman <strong>and</strong> <strong>to</strong> serve as Acting<br />
Chairwoman in her absence.<br />
3. A Treasurer <strong>to</strong> collect <strong>and</strong> record meeting dues <strong>and</strong> money distribution<br />
amongst the group<br />
4. A Secretary <strong>to</strong> write minutes, moni<strong>to</strong>r producing groups (if in different<br />
locations), <strong>and</strong> keep records of the activities of the group.<br />
Identifying Your Market<br />
One of the most important things <strong>to</strong> do in establishing your group is <strong>to</strong> identify your<br />
markets. Different markets require different levels of group development, skills <strong>and</strong><br />
resources <strong>to</strong> satisfy the dem<strong>and</strong>s for that particular market. For example, some women<br />
come <strong>to</strong>gether <strong>and</strong> produce butter in larger quantities for local markets around their<br />
area striving for a reputation as having better butter quality than their local<br />
competi<strong>to</strong>rs. Other groups who have more resources <strong>and</strong> management knowledge may<br />
gain access <strong>to</strong> medium size buyers within the region <strong>and</strong> be able <strong>to</strong> sell in quantity at<br />
whatever desired quality. Some well developed groups have earned the trust <strong>to</strong><br />
contract with larger private companies that might have more strict dem<strong>and</strong>s on<br />
quantity at quality with strict deadlines <strong>to</strong> fulfill orders. What is best is a matter of<br />
opinion <strong>and</strong> depends on whatever circumstances face your particular group <strong>and</strong><br />
processing location.<br />
Assessing your group's capacity is vital <strong>to</strong> determining your markets. Here are some<br />
key questions <strong>to</strong> ask:<br />
• What is the level of commitment <strong>and</strong> seriousness upon your group?<br />
• Is there strong leadership?<br />
• How many available processors are there <strong>and</strong> what are their time constraints?<br />
• Do your women pick their own nuts during the season or do they buy them<br />
from surrounding communities?<br />
• What level of quality are you capable of producing?<br />
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Processing Equipment & Machinery<br />
Once you have assessed your capacity, you should be able <strong>to</strong> make some decisions<br />
about the needs of the group in order <strong>to</strong> serve the market you are targeting. You may<br />
consider acquiring machinery in some cases <strong>to</strong> speed up the processing, for example.<br />
Machines are expensive, but so are milling charges in many producing areas,<br />
especially smaller villages where people don’t produce commercially <strong>and</strong> competition<br />
is little. You may want <strong>to</strong> do a cost/benefit analysis based on the quantity your buyers<br />
are requesting <strong>and</strong> the price they are offering. Each situation is unique. Machinery<br />
may be beneficial, or it could be an added burden <strong>to</strong> the group.<br />
Cooperative Registration<br />
Another thing <strong>to</strong> consider for your group/groups is cooperative registration. Acquiring<br />
the status as a legitimate cooperative offers many benefits. For instance, coop status<br />
qualifies you <strong>to</strong> receive check ups, moni<strong>to</strong>ring <strong>and</strong> trainings from the Cooperative<br />
Office in your district. Every district should have a District of Cooperatives Officer<br />
who you can contact <strong>and</strong> learn about the necessary procedures <strong>to</strong> apply for coop<br />
status. They can visit <strong>and</strong> interact with the groups <strong>and</strong> walk them through the steps<br />
required for registration. Once registered, The District Cooperative Officer will come<br />
periodically or upon request <strong>to</strong> share new information <strong>and</strong> opportunities with the<br />
group. They can provide information regarding new loan programs or other forms of<br />
support that the coop may qualify for.<br />
Being listed under the Cooperative Department allows district officers <strong>to</strong> more easily<br />
identify viable communities in the district <strong>and</strong> extend the benefits that come their<br />
way. Cooperative registration can also increase the marketability of the group. Several<br />
bigger buyers require or prefer <strong>to</strong> work with coops, as it denotes a higher level of<br />
organization within the group, creditability <strong>and</strong> accountability. Coops are a legal<br />
entity of their own. Groups that register as coops also enjoy access <strong>to</strong> more forms of<br />
support. If you want <strong>to</strong> apply for a loan <strong>to</strong> acquire processing machinery or some<br />
working capital, this title will pave your way.<br />
There are some requirements <strong>to</strong> gain cooperative status. The group has <strong>to</strong> prove their<br />
creditability by demonstrating solid organization <strong>and</strong> management skills within their<br />
circle. That requires strong leadership <strong>and</strong> elected roles, an active bank account (at a<br />
Rural Bank is fine), proof of record keeping from their meetings, his<strong>to</strong>ries including<br />
minutes <strong>and</strong> collected dues, <strong>and</strong> a registration fee. This fee is a one time up front fee<br />
of 5 new Ghana Cedis (2007) paid <strong>to</strong> the district office. It puts you in the system <strong>and</strong><br />
lines you up for all the perks listed above. In my personal experience, the cooperative<br />
officer in my district has been extremely helpful <strong>and</strong> responsive <strong>to</strong> our needs.<br />
Many times, very few of the women you work with are educated or literate.<br />
Developing the necessary management skills is a challenge in such cases, but<br />
organizing training on recordkeeping, financial planning, <strong>and</strong> small business<br />
management will benefit the group greatly in the long run. Start with inquiring at your<br />
local district assembly on current programs for these trainings. They often have<br />
funding for such things <strong>and</strong> links <strong>to</strong> other local organizations who work directly with<br />
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building groups organizational capacity. I have found NBSSI (National Board for<br />
Small Scale Industries), SNV (a Dutch NGO), Technoserve <strong>and</strong> World Vision, among<br />
others, <strong>to</strong> be very active players involved with group development.<br />
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6. S<strong>to</strong>ries from the Field<br />
<strong>Shea</strong> <strong>Butter</strong> Extrac<strong>to</strong>r’s Women’s Group: Lessons Learned<br />
One of my counterparts <strong>and</strong> I propositioned a private company (we’ll call it ABC<br />
Company) about providing them with high quality shea butter for export <strong>to</strong> U.S. <strong>and</strong><br />
European markets. The owners of the company were out of the country <strong>and</strong> the<br />
company was in a crunch <strong>to</strong> fulfill an order. The field assistant agreed <strong>to</strong> meet with us<br />
about the possibilities of working <strong>to</strong>gether. We let the representative know that we<br />
had 30 women ready <strong>to</strong> make shea butter under their strict quality control guidelines<br />
<strong>and</strong> within the timeframe needed. The company agreed <strong>to</strong> test the women’s ability<br />
<strong>and</strong> quality of butter with a 2,000 kilogram order (that’s 2 <strong>to</strong>ns or 4,000lbs) at a preset<br />
price. The women would get half of the money up front <strong>and</strong> then the rest upon<br />
delivery. The company would provide packaging <strong>and</strong> pick up the butter from the<br />
village. My counterpart <strong>and</strong> I figured the costs of production <strong>and</strong> profit desired <strong>and</strong><br />
decided the price the company was willing <strong>to</strong> pay was worth it.<br />
Everyone seemed happy. The women were especially excited <strong>to</strong> be a part of a group<br />
(this is an understatement – they were thrilled!). The women were now the Kalpohin<br />
<strong>Shea</strong> <strong>Butter</strong> Extrac<strong>to</strong>rs Association! More importantly, <strong>to</strong> them, they could tell other<br />
women of their village of 5,000 that they belonged <strong>to</strong> something. They were so<br />
proud. Note <strong>to</strong> self – It was time <strong>to</strong> set expectations <strong>to</strong> the group that this is a new<br />
venture <strong>and</strong> we must proceed carefully <strong>and</strong> with much caution. Who could know if<br />
this was something that would continue? Constant communication would prove <strong>to</strong> be<br />
key.<br />
As a requirement from the company, my counterpart set up a bank account for the<br />
newly formed women’s group. The bank in turn required GH¢200 <strong>to</strong> get the account<br />
up <strong>and</strong> we used the women’s own money. The account was necessary for<br />
transparency purposes for the company <strong>and</strong> made good sense <strong>to</strong> the group so they<br />
could easily receive <strong>and</strong> keep track of monies received <strong>and</strong> earned. My counterpart<br />
would act as the accountant, manager, <strong>and</strong> liaison between the group <strong>and</strong> any outside<br />
buyers for the women since none of the women spoke English.<br />
Once the money was received from ABC Company, the women went right <strong>to</strong> work.<br />
This was where problems started. Not until after the money was received <strong>and</strong> the<br />
women were well in <strong>to</strong> production was the group informed that they needed <strong>to</strong><br />
provide their own scale <strong>to</strong> weigh the butter for packaging. My counterpart tried for<br />
two weeks <strong>to</strong> find a scale <strong>and</strong> when he did, the women were nearly done making the<br />
butter. The women even used their own money <strong>to</strong> buy more nuts <strong>to</strong> cover the <strong>to</strong>tal<br />
amount needed <strong>to</strong> complete the order. I was unaware they spent their own money <strong>to</strong><br />
complete the order, but was impressed at their eagerness <strong>to</strong> finish the product in the<br />
timeframe requested by the buyer.<br />
Once the scale was in place my counterpart <strong>and</strong> the women began weighing <strong>and</strong><br />
packaging the butter. Everything seemed on track until the ABC Company sent one<br />
of their field assistants out <strong>to</strong> check the status of the order. When they weighed the<br />
order, it was below the required amount by 25%! We concluded that the scale that the<br />
villagers used was faulty. The second blow was that the women spent all the money<br />
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they were given <strong>and</strong> half of their own money (the money they assumed the company<br />
would reimburse them), but they only produced 1,500kgs of butter. If ABC Company<br />
paid them for only 1,500kgs the women would be at a loss! Oi!<br />
This was a crisis <strong>and</strong> the owners of the business were still out of country. What<br />
would we do!? We were in limbo for some weeks. I met with my counterpart <strong>to</strong> go<br />
over all our numbers <strong>and</strong> costs. We spent hours <strong>and</strong> hours double checking figures.<br />
Everything seemed fine with our calculations. I met with the women multiple times<br />
<strong>to</strong> talk with them about the situation. I learned that they had informed others of the<br />
village <strong>and</strong> that the whole village was on st<strong>and</strong>-by <strong>to</strong> see how the ABC Company,<br />
made up of non-Ghanaians, would h<strong>and</strong>le the situation. I’m not sure what the<br />
implications were, but I know that they were not happy <strong>and</strong> it seemed like bad things<br />
could happen if things weren’t resolved amicably.<br />
After hours of pouring over the cost data I acquired from the company <strong>and</strong> our own<br />
calculations, it appeared it was really no one’s fault except for a weighing scale’s.<br />
That coupled with low yielding shea nuts (this particular season was now proving <strong>to</strong><br />
yield low butter from nuts due <strong>to</strong> lack of rains).<br />
The good news was the women produced excellent butter in a timely manner. It was<br />
packaged neatly <strong>and</strong> ready for delivery even before the company was ready <strong>to</strong> receive<br />
it.<br />
The main lesson learned for me as a facilita<strong>to</strong>r: Nothing Ventured, Nothing Gained<br />
(even if it’s just knowledge). When you go in<strong>to</strong> a new venture, you take chances <strong>and</strong><br />
even if you are very careful <strong>to</strong> reduce your risks, there are still risks. This entire issue<br />
may have been avoided had the company doubled checked the village's scale<br />
measurements upon the first batch of butter made, but would that have been a<br />
reasonable expectation? Perhaps yes, for a newly formed group such as ours,<br />
however, the company was spreading itself thin trying <strong>to</strong> cover this particular order.<br />
But then again the scale issue was uncommon; why should the company think that a<br />
scale would be off by 25% when it hadn’t happened before? Even if an issue was<br />
detected, this may have meant the order would have been cancelled because the<br />
problem then would lie with the nuts that the women purchased which were yielding<br />
low butter. Then the women would have been left with a bunch of nuts <strong>and</strong> a<br />
cancelled order.<br />
Communication with my counterpart <strong>and</strong> the women was important during this entire<br />
process. This is where I feel things went well. I stayed in constant contact with them<br />
through the process <strong>and</strong> met with them frequently <strong>to</strong> insure them that we were all in<br />
this <strong>to</strong>gether <strong>and</strong> my counterpart <strong>and</strong> I were working hard <strong>to</strong> represent them <strong>to</strong> this<br />
outside foreign company. I did not want them <strong>to</strong> think I was conspiring with anyone<br />
<strong>to</strong> take advantage of them.<br />
Also, my relationship with the company helped smooth things over, as well. I knew<br />
one of the owners <strong>and</strong> one of the field assistants. We discussed things thoroughly <strong>and</strong><br />
we all came <strong>to</strong> an agreement <strong>to</strong> chalk this up <strong>to</strong> no one’s fault, but it would mean a<br />
loss for the company. They graciously agreed <strong>to</strong> reconcile the initial amount agreed<br />
<strong>to</strong> be paid <strong>to</strong> the women without making the women produce more butter, which<br />
would mean a loss <strong>to</strong> them. I knew this would provide a hit <strong>to</strong> the company, but<br />
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luckily, the company had the vision <strong>to</strong> see that the right thing <strong>to</strong> do was take the loss<br />
<strong>and</strong> move on.<br />
The bad news is that the company will mostly likely not use this group again. While<br />
they are in a village, they are so close <strong>to</strong> a large <strong>to</strong>wn they have <strong>to</strong> go <strong>to</strong> markets <strong>to</strong><br />
buy nuts, which mean they pay more, <strong>and</strong> therefore the shea butter costs more. If they<br />
were more remote, they could collect the nuts themselves, cutting out the middleman<br />
(or middlewoman) so <strong>to</strong> speak.<br />
The good news is the group is not through. We are on hold though, <strong>and</strong> we have<br />
learned quite a bit in our new experience. There is plenty of dem<strong>and</strong> for shea butter.<br />
My next step is <strong>to</strong> work with my counterpart on contacting other organizations who<br />
would like <strong>to</strong> purchase shea butter where production cost is not as much of an issue.<br />
This should not be <strong>to</strong>o difficult.<br />
One more lesson learned is costing the production of the butter <strong>to</strong> insure the women<br />
receive a fair price. This is not easy. I worked with my women <strong>to</strong> figure out every<br />
cost in detail. Even when I did this, I later learned there were other costs (hidden<br />
costs). Hidden costs can be a women feeding someone or paying them <strong>to</strong> assist them.<br />
Or, variable costs; for example, the price of nuts is hard <strong>to</strong> determine – are they<br />
buying a rounded bowl or flat bowl? Our buyer wanted <strong>to</strong> price things by bag of shea<br />
nuts, but the women buy in bowls – another potential issue. In addition, in leaner<br />
seasons where there may be less rain, the nuts may yield less butter <strong>and</strong> you may not<br />
know this until you produce the butter. All these fac<strong>to</strong>rs need <strong>to</strong> be taken in <strong>to</strong><br />
consideration.<br />
I’m wrapping up my service so I haven’t had time <strong>to</strong> resolve all these issues. One<br />
thought would be for a firm they work with <strong>to</strong> purchase the nuts up front <strong>and</strong> simply<br />
pay the women for their labor <strong>and</strong> cost of production.<br />
There is big potential for village women <strong>to</strong> get more involved in the shea butter export<br />
industry. Especially due <strong>to</strong> the rise of large <strong>and</strong> small businesses alike wanting <strong>to</strong><br />
purchase anything from low quality shea butter <strong>to</strong> high quality certified organic or<br />
certified fair trade shea butter for use in their products. Don’t underestimate the<br />
dem<strong>and</strong> from small companies willing <strong>to</strong> pay slightly higher prices for more niche<br />
markets. Opportunities selling shea butter, both in country <strong>and</strong> <strong>to</strong> exporters, is<br />
growing rapidly. It’s up <strong>to</strong> the new wave of PCVs <strong>to</strong> continue <strong>to</strong> help improve <strong>and</strong><br />
support the women <strong>to</strong> insure they are truly getting fair prices while giving them the<br />
satisfaction <strong>and</strong> pride of being a part of a team; helping them improve the lives of<br />
their families; <strong>and</strong> passing on the shea butter production trade <strong>to</strong> future generations.<br />
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AN EXAMPLE OF COSTING<br />
SHEA BUTTER COST OF PRODUCTION<br />
(Kalophin <strong>Shea</strong> <strong>Butter</strong> Extrac<strong>to</strong>rs Assoc)<br />
Order = 2 TONS (4000 Lbs or 2000 Kgs)<br />
40 WOMEN TOTAL<br />
50 Kgs EACH = 2000 Kgs<br />
Cost breakdown <strong>to</strong> produce 1 kg of shea butter for a 2000 kg order, as<br />
of 24 July 2007<br />
Cost<br />
Cost Item Cost Per Kg<br />
Bowl of shea nuts<br />
Firewood<br />
7,500.00<br />
30,000.00<br />
7,500.00<br />
15.00<br />
Assuming 1<br />
bowl nuts = 1<br />
kg butter<br />
Milling<br />
Transportation <strong>to</strong><br />
30,000.00 15.00<br />
processing point 15,000.00 7.50<br />
DA Tax 1,000.00 0.50<br />
Total Cost 7,538.00<br />
Profit Item<br />
Profit<br />
Per Kg Total<br />
Profit For Administra<strong>to</strong>r 50.00 100,000.00<br />
Profit For Women 1,000.00 2,000,000.00<br />
Total Profit Per Woman (40 women) 50,000.00<br />
Total Cost with Profit 8,588.00<br />
Other possible variable:<br />
Packaging<br />
Transportation <strong>to</strong> Buyer<br />
For those interested in creating shea butter women’s groups, this is an opportunity <strong>to</strong><br />
develop the skill set of an administra<strong>to</strong>r <strong>and</strong>/or help a group of women improve their<br />
lives <strong>and</strong> their families. Another benefit is that if the group is successful, the younger<br />
women of the village would be more likely <strong>to</strong> continue with this craft <strong>and</strong> less likely<br />
<strong>to</strong> flee the village <strong>to</strong> head south for what they think are bigger <strong>and</strong> better<br />
opportunities. The women that leave the village are at a higher risk of prostitution,<br />
becoming pregnant or getting AIDS. Overall this is a very positive opportunity, but<br />
be very aware of what you <strong>and</strong> the group is embarking on.<br />
Here are a few suggestions <strong>and</strong> general information;<br />
• Assuming your women’s group do not speak English <strong>and</strong>/or are uneducated,<br />
you will need <strong>to</strong> look for someone <strong>to</strong> h<strong>and</strong>le the management <strong>and</strong><br />
administration of the women’s group within the community.<br />
• The administra<strong>to</strong>r should be able <strong>to</strong> open a bank account, do the accounting<br />
for the income <strong>and</strong> outflow of money, be able <strong>to</strong> determine costs in detail <strong>to</strong><br />
make sure the group is making money, etc. The administra<strong>to</strong>r should receive a<br />
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percentage of the profit (I suggest 5% - 10%). Finally, the administra<strong>to</strong>r<br />
should be trusted by the women <strong>and</strong> able <strong>to</strong> communicate effectively with the<br />
women in order <strong>to</strong> set realistic expectations.<br />
• Be prepared for the unexpected <strong>and</strong> possible major issue <strong>to</strong> occur, such as a<br />
possible loss on a particular order.<br />
• If a firm will pay 50% (for example) of the money up front so the women can<br />
get started, moni<strong>to</strong>r if the women are starting <strong>to</strong> use there own money <strong>to</strong><br />
complete the order <strong>and</strong> how much so they don’t exceed an amount that would<br />
eliminate their profit. Also, moni<strong>to</strong>r what a the nuts are yielding in butter by<br />
weighing them on initial production. You may want <strong>to</strong> double check the<br />
figures as you continue production.<br />
• 1 rounded market bowl of nuts (a bowl of nuts that are piled above the rim of<br />
the calabash) produces approximately 1 kilogram of butter<br />
• 30 rounded bowls of nuts equals one bag of nuts<br />
• 40 flat bowls of nuts (a bowl of nuts where they level the nuts off <strong>to</strong> the equal<br />
the rim of the calabash) equals one bag of nuts<br />
• 1 bag of nuts produces approximately 30 kilograms of butter<br />
Be sure <strong>to</strong> measure <strong>and</strong> check your local measuring system.<br />
Break-Even Analysis from a UNDP-JICA study near Tamale<br />
(Personal communication via Oliver Hoellige (DED Wa NBSSI Regional Office)<br />
Preliminary findings:<br />
Sagnarigu:<br />
I started the study around May-June this year when price of shea nuts is GHc 20 per<br />
jute bag (between 90-94 kg). Daily wage rate was computed at US$1=GHc 0.92.<br />
Semi-mechanized processing. Yield=40%.<br />
Break-even is GHc 0.97/kg of shea butter.<br />
Walewale:<br />
The same activities were conducted in Walewale (100km further north of Tamale)<br />
around the same time. The price of a jute sack of nuts is GHc 25 per jute bag<br />
(between 92-95 kg). Semi-mechanized processing. Yield=33%.<br />
Break-even is GHc 1.63/kg shea butter.<br />
This higher break-even price might be attributed <strong>to</strong> transportation costs of firewood,<br />
water, <strong>and</strong> milling station.<br />
Note: Break-even price for unrefined shea butter in these two examples does not<br />
include packaging, marketing expenses, etc.<br />
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7: Supporting Ac<strong>to</strong>rs in the <strong>Shea</strong> Industry/Contacts<br />
NGOs <strong>and</strong> Companies Involved in the Ghanaian <strong>Shea</strong> Industry<br />
1. SARI (Savannah Agriculture Research Institute)<br />
2. JICA – Village group training programs<br />
3. Africa 2000 has some <strong>Shea</strong> programs (Office located in Kalpohene Estates)<br />
4. SNV – shea is a focus product in their private sec<strong>to</strong>r development program.<br />
Chris Bakaweri is the Tamale coordina<strong>to</strong>r for their Private Sec<strong>to</strong>r<br />
Development program working in shea. cbakaweri@snvworld.org. Balma<br />
also works with him at the SNV Tamale office.<br />
5. NGO Ride – this is the social responsibility arm of the Company. Katharina<br />
Woener is the Country Direc<strong>to</strong>r, telephone number: 020 932 2693. e-mail:<br />
katharinawoener@gmx.de. Kwabena Badu-Yeboah is the Direc<strong>to</strong>r, F&A, tel<br />
0244 523 594 <strong>and</strong> 020 813 1258, e-mail: kwabena_yeboah2001@yahoo.com.<br />
Major International Companies in the <strong>Shea</strong> Industry:<br />
1. L’OReale<br />
2. L’Occitane<br />
3. AarhusKarlshamns- in Denmark / Sweden<br />
4. IOI group (Loders-Croklaan in Holl<strong>and</strong>)<br />
5. Feeds, Fats & Fertilisers in India<br />
6. The Pure Company<br />
(International Market Dem<strong>and</strong>s high butter content, stearin rich, boiled, sun-dried,<br />
low free fatty acid & no foreign bodies<br />
Local Buyers in Ghana (Nuts & <strong>Butter</strong>)<br />
1. Bosbel Industries<br />
Email: bosbelus1962@yahoo.com<br />
Phone: 0244-864799<br />
Tamale<br />
2. Kassardjian Industries Limited<br />
PO Box 2246, Accra, Ghana<br />
Tamale<br />
3. Ghana Nuts<br />
Techiman<br />
Buying <strong>Shea</strong> Nuts, Cashews, Groundnuts, <strong>and</strong> Soybeans<br />
4. Savannah Fruits Company – <strong>Shea</strong> <strong>Butter</strong><br />
Pre-finances groups of rural women <strong>to</strong> supply quality <strong>Butter</strong> <strong>to</strong> Company<br />
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Peace Corps Ghana Version 1, March 2008<br />
Peter Lovett, <strong>Production</strong> Manager<br />
peter@savannahfruits.com<br />
Tamale (Peter): 0244292898<br />
Accra: 0246360185<br />
5. Ghana Specialty Fats Industries LTD. - <strong>Shea</strong> Nuts<br />
(Plant capacity: 25,000 Tonnes in 2008), Plant Near Tema<br />
K.V. Shevaa – Northern Region Agent/Buyer<br />
Address: P.O. Box TL 2178<br />
Tamale, N/R<br />
Ghana, West Africa<br />
Contacts: Mobile: 0244 315267<br />
Email: shevaa3@yahoo.com<br />
6. Centre For Agriculture <strong>and</strong> Rural Development (CARD)<br />
Manager: Naresh Shukla<br />
Address: P.O. Box TL 1504<br />
Tamale, N/R,<br />
Ghana, West Africa<br />
Contacts: Office: 071 23512/24939<br />
Mobile: 0244 716849<br />
Fax: 071 26566<br />
7. K.I. Ghana – Wa (Formerly Kassardjian)<br />
Mr. Tewiah<br />
Wa, Upper West Region<br />
027 22261 (Wa)<br />
0243 435312<br />
0756 22656<br />
0209 069044<br />
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8. Appendices<br />
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Appendix 1. Value-added <strong>to</strong> selling price of shea butter cosmetics.<br />
<strong>Shea</strong> Nut<br />
0.1 €<br />
<strong>Production</strong><br />
0.5 €<br />
<strong>Shea</strong> <strong>Butter</strong><br />
0.3 €<br />
Other Raw<br />
Materials<br />
0.7 €<br />
Bulk<br />
Finished<br />
Product<br />
50ml<br />
1.5 €<br />
Bottle<br />
1 €<br />
Packaging<br />
0.5 €<br />
Car<strong>to</strong>n<br />
0.5 €<br />
<strong>Marketing</strong><br />
Step 1<br />
Packaged<br />
Finished<br />
Product<br />
3.5 €<br />
Producer’s<br />
Margin<br />
1.5 €<br />
Finished<br />
Product<br />
Sold<br />
by<br />
Producer<br />
5 €<br />
Cost of the legal files<br />
<strong>to</strong> permit selling<br />
1 €<br />
Transport<br />
<strong>and</strong> Import<br />
costs<br />
1 €<br />
Imported<br />
Finished<br />
Product<br />
6 €<br />
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<strong>Marketing</strong><br />
Step 2<br />
Advertising Costs<br />
5 €<br />
Finished<br />
Product<br />
Sold <strong>to</strong><br />
Retailer<br />
by<br />
Importer<br />
12 €<br />
Retailer’s<br />
Margin<br />
9 €<br />
(13 times the initial<br />
price of shea butter<br />
production)<br />
Finished<br />
Product<br />
Sold Tax<br />
Exclusive<br />
<strong>to</strong> the<br />
Public<br />
21 €<br />
Taxes, VAT<br />
4 €<br />
Finished<br />
Product<br />
Sold Tax<br />
Inclusive<br />
<strong>to</strong> the<br />
Public<br />
25 €
Peace Corps Ghana Version 1, March 2008<br />
Appendix 2. Ghana <strong>Shea</strong> SS MAP (from SNV Ghana).<br />
End Use?<br />
<strong>Export</strong>ing<br />
<strong>Butter</strong><br />
Trading<br />
<strong>Butter</strong><br />
<strong>Production</strong><br />
(In country)<br />
Nut<br />
Bulking<br />
Small scale<br />
Nut Trading<br />
Primary<br />
Processing<br />
<strong>Production</strong><br />
Private<br />
<strong>Export</strong>ers<br />
Indivi<br />
dual<br />
Women<br />
(rural &<br />
Urban)<br />
Individual<br />
Rural<br />
women<br />
Cosmetics<br />
(US, CD)<br />
Private<br />
Agents<br />
Body<br />
Shop<br />
Women<br />
Groups<br />
Individual Rural Women<br />
Regional?<br />
Emerging?<br />
Markets<br />
Secaf,<br />
Akoma<br />
SFC<br />
NASFPB<br />
AAK<br />
NASFPB<br />
Food Sec<strong>to</strong>r (EU)<br />
Loders<br />
Croklaan<br />
Loders<br />
Croklaan<br />
IBG?:(
Peace Corps Ghana Version 1, March 2008<br />
Appendix 3. Traditional <strong>Shea</strong> Processing (adapted from Dr.<br />
Peter Lovett).<br />
1. Harvest: fall fruit<br />
picked from the ground<br />
2. Accumulate: Fresh fruit<br />
heaped for 1-2 weeks<br />
3. Boil: Boil sheanuts with water<br />
for ~ 90 min. at temps >95 o C<br />
4. Dry Nuts: Whole nuts spread<br />
in the sun on a hardened mud or<br />
concrete surface<br />
5. De-husk: Nuts are h<strong>and</strong>pounded<br />
<strong>to</strong> remove husks<br />
6. Dry Kernels: Kernels spread<br />
in the sun for s<strong>to</strong>rage, sale, or<br />
further processing.<br />
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7. Crush kernels:<br />
H<strong>and</strong>-pounded.<br />
8. Dry-roast kernels: Dryfried<br />
in large iron. pots.<br />
9. Milling: Milled in<strong>to</strong><br />
paste, usually by<br />
commercial opera<strong>to</strong>r.<br />
10. Kneading: Vigorously, h<strong>and</strong>beaten<br />
for 30-60 minutes until fats<br />
form emulsion, washed, &<br />
removed<br />
11. Boil fat: Cleaned by boiling on<br />
an open fire with decanting stages <strong>to</strong><br />
clarify the oil.<br />
12. Prepare for use, sale, or<br />
s<strong>to</strong>rage: Liquid is left <strong>to</strong><br />
cool <strong>and</strong> stirred in<strong>to</strong> a<br />
smooth, creamy butter<br />
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9. NOTES:<br />
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