Nigeria’s struggle with economic development, unemployment, and various setbacks stem partly from its slow move towards a well-diversed economy. Since the public sector has failed in that regard, the responsibility falls in the hands of the local entrepreneurs to create the wealth that will grow the economy.
One of the ways Nigerian entrepreneurs can achieve this goal is to invest in industries with large markets but low local production costs. An example of such industries is the tissue paper production business.
In 2004, Tissue papers were placed on the list of banned items to encourage local production and supply. It worked to an extent, but then, the few tissue paper manufacturers in the country cannot keep up with the local rising demands.
There is a huge gap between tissue paper demand and supply which is a great business opportunity. In Nigeria, the consumption rate is over 1 billion units monthly, yet, production rates are less than 150 million. Before taking advantage of what this venture has to offer, knowing the right steps to take to start a tissue paper production business in Nigeria is key.
What Is The Tissue Paper Production Business About?
A tissue paper production business manufactures, packages, and distributes different forms of soft, hygienic papers. It is a lucrative long-term investment that requires substantial initial capital for production. Starting a small or medium-scale business can cost as much as N2 million – N7 milion. Large-scale tissue companies begin production with about N15 – N20 million naira.
Tissue papers are also called toilet papers, toilet rolls, and tissue rolls.
The raw materials for the production of toilet papers are various quantities of whitened wood pulps or recycled papers which are processed into soft, bulky, and absorbent disposable paper. The production process involves either manual or automated machines.
Business Opportunities In Tissue Production Business Around The World
Some of the lucrative opportunities of the tissue paper production business in Nigeria and other parts of the world are:
1). Toilet Rolls Production Business:
Toilet rolls manufacturers have the largest tissue paper consumers in Nigeria and most parts of the globe. It is a sanitary product found in most homes, offices and public restrooms. Every year, the consumption rates increase by 10% to 12%, adding to the GDP of most tissue paper export countries.
These yearly upturns provide an excellent business opportunity for potential entrepreneurs in Africa. Still, establishing a successful tissue roll factory requires information, sufficient funds, and some technical training.
2). Table Napkins Production:
These tissue papers have one to four interwoven layers (plies) with varied designs, sizes, colours, and textures. The raw materials used in production are either chemical or recycled pulp depending on the manufacturer’s choice.
In recent years, the tissue table napkins production business has experienced remarkable market growth and increased profitability. This is because they are a more affordable and low maintenance form of table napkins. Tissue napkins are used to clean up the mouth and fingers during and after a meal. And, they can be folded and bent into different decorative shapes.
The food service industry i.e. catering, eateries, hotels, restaurants, fast foods, and bar joints generate a huge market for this product. Event decorators also buy different types of these napkins and use them to enhance the beauty of table centrepieces.
3). Paper Towels Production:
A paper towel is an alternative and disposable form of kitchen/hand cloth towel. Unlike cloth towels, it does not require frequent washing, making it an easier and more hygienic option. Because of its lightly woven fibre structure, paper towels absorb liquid better than toilet rolls. Its uses include cleaning, dusting, wiping, and drying various surfaces.
Tissue factories manufacture paper towels, package them in folded stacks or rolls and then sell them to wholesalers and retailers. These towels have the second largest consumer base in the tissue paper production industry. The market for paper towels is divided between domestic and public buyers.
Domestic buyers are consumers who buy directly from retailers and use these products in their homes or personal spaces. Commercial consumers buy in bulk from factories, wholesalers, or large retail outlets. Paper towels bought for commercial uses are found in public restrooms, hotels, restaurants, and their kitchens.
Paper towels are made from 100% recycled fibre or chemical pulp. Some manufacturers combine both pulp and fibre raw materials in production. The result is a more durable and stronger paper towel stack. They usually weigh 20-24 g/m2 and are generally two-plied (double layered).
4). Wrapping Tissue Production:
Another lucrative tissue paper product is the wrapping tissue paper. These are lightweight, semi-transparent papers between 17 to 40 grammages. There are several kinds of wrapping tissues; soft, shining, hard, and rough. Some are a combination of textures and looks. An example are the soft and shiny tissues found in bags.
Wrapping tissues are personalized with colours, logos, and brand names of the companies that buy them. This variety of tissues is usually mass-produced and supplied to businesses that package their goods by cushioning or wrapping them. Wrapping tissues are stuffed in bags/shoes, laid around delicate objects or wrapped around items to prevent damage. Clothing lines also use these tissues to protect garments from creases and keep them safe.
5). Customised Wrapping Tissue Business:
The market for customized wrapping tissues is expanding due to the rising levels of demand. Customization companies make considerable profits from producing personalized wrapping tissues. Their client base includes boutique owners, fashion product companies, retail outlets, and domestic consumers.
Durable customized printed tissue wrapping papers are printed with soy-based ink on non-acidic tissue papers.
6). Face Wipes Production Business:
Facial tissues are the ultra-soft, absorbent, and disposable substitutes of cloth handkerchiefs. This variety of tissue rolls are used for facial cleansing, hands, and nasal wiping. Though it’s mostly a personal-use product, facial tissues can also be found in offices and beauty salons. This business has a considerable market size; online retail outlets, supermarkets, shops, and pharmacies.
Paper handkerchiefs are manufactured from 14-18 g/m2 (lowest base weights) tissue papers. As a result of its high-quality requirements, base tissues are made from pure chemical pulp. In some cases, recycled fibre might be added to it for strengthening.
A facial tissue has two to three plies and is lightly calendered to achieve a light, smooth surface. Some producers add fragrances, lotions, softeners, and liquefied herbs to give it a certain texture or scent. Also, facial tissues come in different boxes or portable sachet packs with partial openings as dispensers.
7). Wet/Baby Wipes Production:
Tissue factories make huge profits from producing and distributing wet wipes in bulk to wholesale or large retail outlets. Wet wipes are small, moist tissue paper used to clean surfaces and for personal hygiene. It also comes in small cardboard boxes or plastic packages with dispense openings at the top or sides.
Nowadays, parents use it to clean up their infant or toddler’s backsides during diaper swaps. Wet wipes are recommended by experts for other baby care activities such as cleaning pukes, and wiping dirty hands, or faces. Special baby wipes come with cleansing agents that are either mild or alcohol-based.
Other types of special wet wipes are industrial wipes, cleansing pads, and medical wipes.
Types Of Tissue Paper Production Business
The types of tissue paper production businesses in Nigeria include:
1). Large/Medium-Scale Tissue Paper Production:
For those who started small, this business type is an expansion of your company. In large/medium-scale tissue production, tissue papers are manufactured independently and the machines are sole-owned. However, these machines could be automatic or manually operated and of foreign or local variety.
Overall, there is a chance to quickly take advantage of the large market and extend into large-scale production. You are also free to control the quality, brand, and profits of your products.
Small-scale tissue paper producers are not directly involved in the manufacturing process. They buy jumbo rolls from large-scale tissue paper production companies, cut them down to regular sizes with automated machines, package, brand, and then sell their tissue products.
This type of tissue paper production business is cheaper but challenging. The first problem is the inability to control quality and profits. Small-scale producers often get frustrated sharing profits with larger companies while dealing with poorly manufactured jumbo rolls.
How To Start A Tissue Production Business In Nigeria: A Step By Step Guide
Here are the steps on how to start a tissue production business in Nigeria:
1). Choose A Tissue Paper Variety:
The first step towards starting up this business is to decide on what variety of tissue paper to produce. If it’s a small or medium-scale business, pick an option that fits into your available capital. A large-scale tissue paper production business can decide to manufacture more than one variety of tissue papers without financial issues.
2). Training And Experience:
Effectively managing a tissue paper production process requires technical knowledge and hands-on experience. It would be very useful to obtain some training or hands-on experience on how to handle production equipment, raw materials, and manufacturing process.
3). Secure A Good Location:
Setting up a factory in the commercial hub of a town or city is the best way to secure a good site. Commercial hubs with access to enough power supply will boost productivity, bring in more market traffic, and increase profits.
The interior space of the factory should be large enough to store products/machines and accommodate employees.
4). Carry Out A Market Research:
To establish a successful toilet paper business, first organize a detailed market research. Inadequate information and knowledge will only result in business struggles or failures. Some aspects to focus on are machinery costs, technical operations, initial/working capital, production processes, capital, registration requirements, and cost of the required machinery.
5). Raise Capital:
The capital required for a tissue paper production business is determined by the scale and type of business you decide to start up. A market research would give you an idea of how much is needed and what execution is required to make the business successful. Making sure your business is not underfunded is critical at this point. Your business capital must cover the different financial aspects of the business from production to distribution.
Personal wealth or savings is an option if you choose to start small whereas a large scale business could require a large loan or investment. Commercial banks or co-operatives can provide loans with an good business plan and collateral.
6). Purchase The Production Equipment:
Buying the production equipment will not only take most of the capital, but also requires careful consideration. That’s because the success of your business depends on purchase durable, high-quality equipment.
The right set of machines and tools will enhance productivity. It would also reduce the workload of your workers which in turn increases their efficiency. Poor quality machines would definitely require constant repairs and lower the quality of your products.
Furthermore, the scale of your tissue paper production business will determine the number of equipment needed. Large-scale production would require larger scale automated machines while small tissue paper businesses would need less equipment and capital.
Some of the equipment and materials for a tissue paper production business are;
Recycled fibre or pulps
Tissue paper folding machine
High-speed toilet paper machine
Industrial roll rewinding and slitting machine
Pulp and waste paper recycling jumbo roll machines
Core making machine
7). Employ workers:
No doubt, the tissue paper production process requires more than on one person. Hiring skilled workers makes tasks easier to manage and is cost-effective. While in training, unskilled employees can handle other jobs like heavy liftings, transportation, packaging, and boxing.
A good marketing strategy basically outlines the achievable and effective ways to promote your business. Without that, the rate at which a venture grows its customer base will be slow and unstable. At this point, hiring a sales expert would be the best decision for start-up entrepreneurs.
On the other hand, using platforms such as social/print media, online websites, and blogs can create awareness for your products. Discounts and promotional offers also are effective means of attracting customers.
Challenges Of Tissue Production Business In Nigeria
Some prospective entrepreneurs are challenged with sourcing for funds to purchase automated, high-quality machinery.
Lack of constant and stable electricity to power machines and reduce extra costs from daily diesel purchase.
Small and medium-sized tissue paper production businesses struggle with quality control because of the unavailability of affordable, local machines.
Numerous red tapes and protocols delay business registration process in Nigeria.
Locally-produced tissue production machines produce low-quality tissue products in insufficient amounts.
Obtaining loans from commercial banks without collateral is often problematic for budding entrepreneurs.
The tissue production business in Nigeria needs more investments and factories to cope with ever increasing demands. This overlooked industry has the potential to improve the economy by providing job opportunities, boosting domestic production and generating wealth for African entrepreneurs.
Anyone searching for a profitable, long-term investment could consider the toilet paper production business. With sufficient funding, knowledge, and patience, you could grow a successful business from tapping into its huge domestic and global markets.