Inside Nigeria, Fish Report 2006
As published in www.nigeriafish.org

Nigeria has been a major importer of fishery products given its ever increasing consumption and lack of sufficient internal sources - Market size - 1 million tonnes pa.

Market Dynamics & Regulations

Since the time the Government of Nigeria made a tariff reduction on all fishery products in 2001 from 25% to 5% in 2001, Nigeria has become a major destination for imported seafood. The total market demand in Nigeria according to industry sources have grown to more than one million tones per annum, making it the largest market in West Africa in the industry.

There are various species of frozen fish being imported into Nigeria i.e., herring, Horse Mackerel, Mackerel, Croaker, Sardinella, Blue Whiting etc., and specie like Mackerel (TITUS), Horse Mackerel (KOTE) and Croaker are expensive compared to the other Species. Some canned products are also imported. Tilapia and catfish are the major species farmed by local fish farmers.

Given its relatively cheaper cost, fish has become the major source of nutrition for the people of Nigeria, most of who are not economically well off. Fish remains the main product consumed in terms of animal protein in Nigeria.

As fish is a natural product, the nature decides the supply levels. The supply decides the price levels, subject to the buying power. When there is excess catch of particular specie and the end markets are glutted with that specie, the trawlers are under pressure to off-load the fish and return for their refill / production. At that point of time, the prices will be cheaper. At the same time when the season is over or the particular specie in short supply, the prices will be at a premium.

The major portion of frozen fish is sold at traditional open markets. Wholesalers or retailers are located at these markets but they purchase from importers/distributors cold storage facilities. Those owning usually, small cold store located within the market area, have the product delivered directly to them.

The Characteristic and price of the same specie of fish differs based on the country of origin i.e., which country the fish is caught. Hence the price of the same specie will differ based on the country of origin of the fish. For example, the Mackerel (TITUS) caught in European waters is more expensive than the Mackerel (KAMPALA) caught in the Mauritanian waters.

The same specie of fish from same country of origin, still differ in characteristic like fat/oil content, roe content etc from time to time throughout the year based on spawning, weather changes etc., The fish with low oil content / low roe content will be priced less, as predominantly fish is smoked in Nigeria and with low oil content it is not possible to smoke the fish.

The EU is the dominant supplier of frozen seafood products with more than 70% of market share in the country. Other supplying countries include China, Korea, Brazil, Paraguay, Uruguay, USA & Gambia, Mauritania, Namibia, Angola, Morocco, etc. Suppliers in the EU countries arrange frozen seafood products from different loading ports around the world and are therefore, able to sell larger quantities shipped in large river vessels of 3,500-4,000 MT reducing ocean freight costs significantly.

Imported frozen seafood is usually shipped to Apapa-Lagos, Port Harcourt and Warri and are inspected, passed through custom clearance. After clearance the products are transported in refrigerated trucks to cold storage warehouses located within Lagos and other urban centers. Wholesalers, usually have their cold storage facilities and purchase as the product is offloaded or take stock from importers' cold stores.

For health reasons, the Nigerian Government classifies port clearance for fish landings at Nigeria's ports as "Priority". Importers are allowed to transport their consignments to their warehouses even upon a partial payment of duty and port charges (usually 80%)--the remainder to be paid later at an agreed time. Imported seafood products are shipped in branded boxed packages of 20kg, 25kg and 30Kg and the number of fish per box varies with fish sizes - small, medium or large, which range from 80 to 120 pieces per carton.

Frozen seafood imports are widely distributed in the country, through a network of privately-owned cold stores located in major cities. The seafood is available frozen in city markets, and also smoked for rural village markets. Sub-wholesalers or Super-retailers always buy from wholesalers to break bulk further except for promotional sales. The wholesaler is the nucleus of distribution channels in Nigeria's retail sector and serves nearly every member in the distribution channel.

Wholesalers often site their cold storage facilities in the traditional markets. More than 80 percent of distribution channel members in Nigeria's traditional market are retailers.

Product prices are about 20-30 percent lower in the traditional markets than in convenience stores and supermarkets. Pricing in Nigeria's traditional markets is usually negotiated on the spot.

The Federal Fisheries Unit of the Federal Ministry of Agriculture and Natural Resources (Nigeria's Department of Agriculture) regulate Seafood imports. The Federal Fisheries Unit issues import licence to local firms applying to import after due certifications. The Nigerian Customs Service is the government agency for import duty collection.

Due to the competition in the market, the margins are pretty thin in fish business of Nigeria. For example, the Herring is sold in Nigeiran market, retail for N30/piece, whereas, the same specie is sold in European retail market for about N430/piece where the fish is produced. Same is the case for the Mackerel which is caught in Europe - the local price of Mackerel is sold for N100/piece, whereas in UK retail market for N630/piece.

It is also a very difficult task to maintain low temperatures of the cold stores due to frequent power failure, manual loading process (wherein temperature is lost due to opening and closing of the door), failure of machinery due to voltage fluctuation etc. If care is not taken, the fluctuation in cold - store temperature will affect the quality of the fish adversely.

In most of the countries, esp. European countries, frozen fish is palletized and handled with forklift, whereas in Nigeria, fish is off-loaded carton by carton into the lorries. The pilferage at the port side is too much for each vessel, especially when high value fish like Mackerel/Croaker is discharged.

In Nigeria, mostly frozen fish is transported in covered / open trucks but without refrigeration. Hence, one should be careful about the time it takes, to load, transport and off - load the fish within a reasonable time frame. If by any chance the fish is not offloaded on the same day and left outside the cold- stores overnight, the recovery from that fish will be less than 50% of the cost value.

Therefore there are significant barriers to entry at the importer level.

Market Players

Amongst the major importers the Stallion Group has the widest located infrastructure in form of cold rooms, transport and staffing in country. Through it long standing relationships with suppliers from the EU particularly from The Netherlands, UK, Ireland, Mauritania etc., and Stallion has established itself as the market leader commanding more than 40-45% market share according industry sources.

It is estimated that the group owns more than 60,000 tonnes of cold room capacity in key Nigerian locations. Moreover, Stallion's presence in the regional African markets as well as in the Middle East provides them the ability to commit large quantities with the suppliers and achieve economies of scale. Stallion has deployed best technology on supply chain management to gain competitive advantage and meet supplier standards.

Stallion is owned by the Vaswani Brothers Sunil, Haresh and Mahesh have established total dominance of the market in Nigeria over the years. Stallion is also into a host of other business lines including rice, automobiles, textiles, plastics, chemicals, fertilizers, construction, shipping etc., in Nigeria and other West African countries like Ghana, Ivory Coast, Senegal, Cameroun and Angola.

Seafood Products Ltd., is the second largest player with an estimated market share of about 25% and with about 20,000 tonnes of coldroom capacity. They source from The Netherlands, UK and Mauritania the entire range of species.

The third largest is POF Nigeria Ltd., although their market focus is primarily the city of Lagos. This company imports European and Mauritanian shipments and has a cold room capacity of around 12,000 tonnes.

The other importers include African Fish Ltd., Onward Fisheries, Fiogret Nigeria and Primlex Nigeria.