ENHANCING AGRICULTURAL PRODUCTS COMPETITIVENESS IN THE TECHNOLOGY INCUBATION CENTRES IN NIGERIA

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1 ENHANCING AGRICULTURAL PRODUCTS COMPETITIVENESS IN THE TECHNOLOGY INCUBATION CENTRES IN NIGERIA Department of Mechanical Engineering Faculty of Engineering Bayero University Kano Abstract Competitiveness of a product is how the end-customer perceives the offered product based on its important attributes such as quality, price, taste, aesthetics and shelf-life. The most important tenet of the value chain approach is to understand the process of creating and defining competitive landscape effectively. This paper attempt to show how business incubation services offered in the Technology Incubation Centres (TICs) are being use to improve the competiveness of agricultural products incubated. Presently there are about 27 TICs located in various States of Nigeria in which various businesses that process agricultural products and fabricate agricultural machines are being incubated. Business incubation is a public and/or private, entrepreneurial, economic and social development process designed to nurture business ideas and start-up companies, and through a comprehensive business support programme, help them establish and accelerate their growth and success. Keywords: Agriculture, business incubation, Technology Incubation Centres, products. INTRODUCTION The agricultural sector make up the agricultural products/services supply chain which is important to the Nigerian economy and a major driver of economic activity, employment, social cohesion and prosperity in many parts of Nigeria, especially the arid zones of Northern Nigeria. More than 70% of the working adult population of Nigeria are employed in the agricultural sector directly and indirectly. Therefore agribusinesses have a strategic place to drive Nigeria s future economic development (Manyong et al, 2005, Adeyemi et al, 2014). Agribusiness creates important linkages that are keys to fighting food insecurity, not only because they stimulates increased production but also due to their potentials to create wealth for the community. Developing a viable agribusiness sector in Nigeria is a development challenge, but it is also a significant market opportunity for Small and Medium Enterprises (SMEs) who are the largest investors in agriculture. Developing a competitive and sustainable agribusiness sector will require focusing on various components of the agri-food chain. This will include a wide spectrum of initiatives from boosting productivity at farm level to upgrading value chains by empowering SMEs. Key challenges and opportunities for the sector include increasing competition from imported products, new production technologies and consumer attitudes to their application; advances in the digital-economy; increasing globalisation of supply chains and increasing frequency and intensity of adverse weather events. Understanding current and future issues affecting the competitiveness of the agriculture sector will help individuals, industries and governments better respond to these opportunities and challenges. One of the ways of overcoming above challenges are provision of infrastructural facilities (one of such is the TICs) for the development of small-medium-scale industries. The provision of these infrastructures will give an assurance for the development of indigenous methods and technology suited for agricultural sector in Nigeria. 1. Business Incubation The National Association for Business Incubation (NBIA), USA defines Business Incubation in the following manner: 95

2 Business incubation is a business support process that accelerates the successful development of start-up and fledgling companies by providing These services are usually developed by incubator management and offered both in the business incubator and through its network of contacts. A business incubator s main goal is to produce successful firms that will leave the program financially viable and freestanding. These incubator graduates have the potential to create jobs, revitalize neighbourhoods, commercialize new technologies, and strengthen local and national economies. (Monkman, 2010) Business incubation has been identified as a means of meeting a variety of economic and socioeconomic policy needs, which may include: (Lalkaka, 2002) employment and wealth creation; support for small firms with high growth potential; transfer of technology; promoting innovation; enhancing links between universities, research institutions and the business community; industry cluster development. 2. Business Incubation in Nigeria The National Board for Technology Incubation. (NBTI) established in 2005 is an agency in the Federal Ministry of Science and Technology established by the Government to supervise, coordinate and monitor the business incubation programme in Nigeria. The programme is called Technology Incubation Programme (TIP). TIP is an integrated support programme provided by governments, academic institutions and private sector either individually or in partnership with the intention of creating and nurturing of budding valueadded and technology-based enterprises. It is designed to speed up the commercialization of technologies by effectively linking talents, technology, capital and know-how in order to accelerate development of new enterprises. The goal of the programme is to assist small scale budding entrepreneurs to overcome the initial hurdles of carrying viable Research and Development results as well as innovative efforts into profitable enterprises. [FMST, 2005; Gambo 2009; NBTI, 2010). The mandates of the TIP are: Provide a platform for speedy commercialization of technologies by entrepreneurs with an array of targeted resources and services. effectively linking talents, technology, capital and knowledge. Create, nurture and develop value-added technology-based enterprises. Promote the establishment of and management of viable science and technology parks, technology incubators and technology-based enterprises. Enhance linkage of tenant/technology know-how and capital in order to develop techno-entrepreneurship culture based on continuous value addition. Promote and facilitate the application of indigenous technologies and knowledge. Set standards for and regulate the establishment and management of Science and Technology parks and Incubators 3. Technology Incubation Centres (TICs) Technology Incubation Centres are the organizations under NBTI where the business incubation activities are provided in Nigeria. They are technology business incubators whose primary goal is to promote the development of technologybased enterprises, assist in completion of the technologies under development, promote technology transfer, technology commercialization, technology diffusion and encourage entrepreneurship among researchers, academics, engineers. The establishment of TICs in Nigeria began with a UNSFTD attempt to establish a pilot Centre in Lagos State in After several years of little or no action, incubators were eventually established under an umbrella organization created to their development, the Nigerian Incubator System Foundation Board. The Nigerian Incubator System Foundation Board was established in 1993 together with a committee to implement the project set by the foundation. The Foundation Board and Implementing Committee consist of representatives from the private sector, federal and State Governments. They were charged with the responsibilities of establishing the first TIC to be located in Agege, Lagos (1993). The second was in Kano (1994) and third one in Aba (1994). Presently there are 27 TICs located in various States of Nigeria and efforts towards the establishment of TICs in five States are in progress. Fig.1 below show the spread of the TICs across Nigeria. 96

3 Figure.1: Technology Incubation Centres (TICs) in Nigeria (NBTI, 2014) 4. Agricultural Products Incubated in the TICS According to Marchet et al (2001), Agribusiness in Nigeria constitutes 70% of businesses operating in the country. In a survey, NISER (1999) observed that 41 percent of agro industries are sole proprietorships, while another 41 percent are private limited liability companies [9]. The 2013 annual report of NBTI shows that businesses involve in production of consumer goods, agro-allied and food products account for 40% of the businesses presently being incubated at the TICs in Nigeria as shown in Figure 2. Figure 2: Categories of products incubated at the TICs (NBTI, 2014) In the TICs the business involve in production of consumer goods, agro-allied and food products can be divided into the following components: farming inputs supply companies; producing farm firms, processing agribusiness firms and food marketing and distribution. Farm Input Supply Businesses: This encompasses agricultural chemical inputs producers such as pesticides and 97

. herbicides, feed concentrate producers, agricultural machinery and equipment fabricators, veterinary products manufacturers.

chocolate, cakes, biscuits; leather and footwear manufacturers, essential oils production. Currently over 200 agribusinesses are being incubated in Nigeria.

Some of the incubated businesses include: Dandago Agricultural Machinery Ltd incubated at TIC Kano: The business is involved in fabrication of Agro allied processing

Plate 1: Agricultural products incubated at the TICs: oil extractor, crop thresher and rice process equipment (TIC Kano, 2013) Kamilu welding services an incubatee of

Plate 2: Food processing equipments by Kamilu Welding Services, Packaged food by HOMIP and Avian egg Hatchery by AgriTech Ltd (TIC Kano, 2013) 5.

competitiveness of Competitiveness is the power of an individual incubated businesses in the TICs are: product or a group of products offered by certain company

4 . herbicides, feed concentrate producers, agricultural machinery and equipment fabricators, veterinary products manufacturers. Food Processing Businesses: This includes food and fruit juice packaging; manufacturer s tea such as Moringa olifera tea; producers of confectionary such as chocolate, cakes, biscuits; leather and footwear manufacturers, essential oils production. Currently over 200 agribusinesses are being incubated in Nigeria. These businesses are scattered all over the TICs in Nigeria. Some of the incubated businesses include: Dandago Agricultural Machinery Ltd incubated at TIC Kano: The business is involved in fabrication of Agro allied processing machines: grains threshers, stalk grinding machines, small oil extraction machines, rice de-stoners, cleaners, etc. Plate 1: Agricultural products incubated at the TICs: oil extractor, crop thresher and rice process equipment (TIC Kano, 2013) Kamilu welding services an incubatee of TIC Kano. The enterprise is in fabrication of food processing equipments such as mixers, Pasteurizers, grinders. Plate 2: Food processing equipments by Kamilu Welding Services, Packaged food by HOMIP and Avian egg Hatchery by AgriTech Ltd (TIC Kano, 2013) 5. Facilities and Services Offered at the TICs to Enhance Product Competitiveness Some of the services provided by the TICs around Nigeria to enhance product competitiveness of Competitiveness is the power of an individual incubated businesses in the TICs are: product or a group of products offered by certain company satisfies existing customers, and also 1. Product quality control laboratories and services: If a product fulfils the customer s expectations, attracts potential customers to purchasing. the customer will be pleased and consider that Competitiveness is a dynamic concept. It is a favourable cycle between customer satisfaction and the product is of acceptable or even high quality. If his or her expectations are not fulfilled, the customer attraction (UNIDO, 2006) 98

5 customer will consider that the product is of low This means that the quality of a product may be defined as its ability to fulfil the customer s needs and expectations. Quality needs to be defined firstly in terms of parameters or characteristics, which vary from product to product. For example, for a mechanical or electronic product these are performance, reliability, safety and appearance. Example, for pharmaceutical products parameters such as physical and chemical characteristics, medicinal effect, toxicity, taste and shelf life may be important. For a food product they will include taste, nutritional properties, texture, and shelf life and so on. The TICs have well equipped quality control laboratories with Scientific and Technical Officers who assist the Entrepreneurs in ensuring their products meets the required standards. And also the TIC assists the Entrepreneurs in obtaining product registration and certification such as SON, NAFDAC etc. 2. Product design services The specifications and drawings produced by the designer should show the quality standard demanded by the customer or marketplace in clear and precise terms. To achieve the above, the TICs have technical staffs that are responsible for design, production and quality of products. They assist the Entrepreneurs in making the product design meets the individual characteristics of the product such as dimensions, physical properties, appearance, functional qualities, effects on service, such as taste, feel or noise level, raw materials. 3. Product manufacturing Assistance: The TICs have central workshops equipped with manufacturing equipments. The Technical and Scientific officers in TICs assist the entrepreneurs in: Deciding on the method of manufacture. methods that permit processes to make the product in the quickest, easiest and effective way, including preparation of manufacturing instructions, setting up procedures, Providing the necessary machines, plant, tooling and other equipment. The TIC assist in equipment that are required for quality. manufacturing and are capable of achieving the standard of quality demanded of the products Obtaining satisfactory raw materials. The TIC ensures that the satisfactory raw materials are made available to the enterprises incubated. 4. Business Support services: The TICs provide the following services to their tenants: business planning and skills development that will help its tenants to overcome the common barriers to start-up, for the survival of their products and to attract investor who may be willing to invest as business partner in the tenants businesses. Other business support services are preparation of business plans, financial documentation, market research, feasibility studies, management skills training, business consultation, mentoring, coaching, matching events for Incubatees and potential investors, advice on funding strategy, library services, ICT services etc. 5. Financial Aid Package Assistance: Incubatee may have access to a package of financial aid during the incubation period such as PSCII grant, NERFUND loans. The aid can help Incubatees cover part of the cost of the business support and development services. Financial networking of the entrepreneurs with banks, funders, associations, investors, government agencies to acquire capital, grants, loans, equity for the tenant companies. 6. Linking the Tenants with suppliers, customers and investors: The TIC facilitates linkages between its tenants and key industrial sector players of the locality in areas of raw material sourcing, machines and equipment supply, potential users and buyers of tenant s product, stock brokers. 7. Linkage to Knowledge providers: The TICs assist its tenant to establish linkages with educational institutions such as colleges, training institutions, vocational institutions, universities and polytechnics which can provide technology, research resources and R&D outputs for their product improvement. 99

Plate 3: Quality Control Laboratories and a CNC machine tool in a Central workshop of the TICs (NBTI, 2014) 6.

graduating??? various types of consisting 333 beneficiaries.

country and generated wealth for the country.

6 Plate 3: Quality Control Laboratories and a CNC machine tool in a Central workshop of the TICs (NBTI, 2014) 6. Achievements of the TICs in making Fabrication and distribution of crop residue crushing agricultural product competitive in Nigeria machines by NBTI to cooperatives in Zaria The TICs have being graduating??? various types of consisting 333 beneficiaries. The advantages business among which are the agribusinesses who include processing waste from farms for animal have created over one million jobs across the feed, feed provision for cattle rearers and country and generated wealth for the country. resolution of conflicts between cattle rearers and Some of the achievements of the TICs in the farmers and development of appropriate incubation of agribusinesses are given below: technology.. (NBTI, 2014) Dandago Agricultural Machinery Ltd is an enterprise Fabrication and distribution of multipurpose involves in fabrication of agricultural machinery in TIC Kano. He came into the TIC with just very little working capital and few types of equipment for a start-up. Currently the enterprise has 33 full time threshing machines for 218 beneficiaries in Gombe, Gombe State (North East). The aim of which is the substitute of manual labour with appropriate technologies. (NBTI, 2014) staff. He had empowered over 200 youths in the Fabrication and distribution of Bee-keeping area of fabrication of agricultural equipment in technologies for 312 beneficiaries in Osogbo, Ogun Kano State Government-NEPAD-TIC tripartite State (South West). The aim is to promote of the agreement. His performance in 2013 include the use of local sugar through modern bee keeping fabrication of 186 crop threshers, 162 stalk technology, classification, granulation and grinding machines, 187 oil extraction machines, 77 rice process equipment and 42 tractor traction packaging.. (NBTI, 2014) Fabrication of Essential Oil Plant at TIC Kano aimed aids in which it was able of generate wealth of at the provision of new materials for N143,758,000 and created about 1649 direct and indirect jobs (TIC Kano, 2013) Some Entrepreneurs participated in the 2013 trade pharmaceutical and cosmetics industries that are in higher demand. The project was carried out in collaboration with NARICT has also attracted the fairs at Accra and Lome respectively in attention of Federal Polytechnic, Kazaure and is collaboration with Nigeria Export Promotion generating new economic activities within Kano Council. All their goods taken to the fair were sold and Jigawa States. (NBTI, 2014) and trade ties established between participating 7. CONCLUSION entrepreneurs and the clients. (NBTI, 2014) Austin Laz (Nig. Ltd.) post incubatee from TIC Benin has been listed in the Nigerian Stock Exchange. This paper assessed howthe Technology Incubation Centres under the National Board for Technology Incubation in the Federal Ministry of Science and The company is into food processing and Technology had been providing facilities and preservation products such as thermal cool, services under the Technology Incubation warmers and ice block making machines.. (NBTI, Programme of the Nigerian Government to 2014) Spectra Industries Ltd., a post Incubatee from TIC Lagos has been invited for listing in Nigerian Stock businesses engaged in production of agricultural products and provision of agricultural services in Nigeria. The paper illustrated the type of agricultural Exchange (NSE). The company is into the production of food processing using local raw materials.. (NBTI, 2014) products/services fabricated at the TICs and the services provided by the TICs to the businesses in order to make their products competitive in the 100

7 market. The success of some incubated agribusinesses in the TICs around Nigeria was stated ACKNOWLEDGEMENT I would like to thank the Centre Manager of TIC Kano, Engr Abdullahi Maiturare and the staff of the centre who helped in gathering some of the information used to write this article. Would also in the paper. like to thank the Federal Ministry of Science and Technology for given me the opportunity to work as Deputy Director of Operation at NBTI in Abuja, the experience which I used to write this paper. REFERENCES Adeyemi, K S and Abiodun, A J (2014), Development of the non-oil sector in Nigeria: challenges & lessons for less developed countries. Covenant journal of business and social sciences (cjbss) vol. 5, no. 1, January, FMST (2005), Policy functions structure and operational guidelines of Technology Incubation Programme in Nigeria. Federal Ministry of Science and Technology (FMST), Abuja Gambo L.A (2009), Progress report on Technology Business Incubation Programme presented at the National Council for Science and Technology meeting, Enugu. Lalkaka R (2002), Technology business incubators to help build an innovation-based economy. Journal of Change Management, vol.3, No.2, pp Manyong V M, Ikpi A, Olayemi J K, Yusuf S A et al. (2005), Agriculture in Nigeria: Identifying opportunities for increased commercialization and investment. International Institute of Tropical Agriculture (IITA), 2005, Ibadan, Nigeria. Monkman, D (2010), Business Incubators and their Role in Job Creation, President& CEO National Business Incubation Association (NBIA), Athens, Ohio. June 30, 2010, < NBTI (2010), National Policy on Technology Incubation Programme, NBTI, Abuja. NBTI (2014), TIP progress report presented at the 2014 National Council for Science and Technology held in Minna, Niger State. May TIC Kano (2013), Annual Report of TIC Kano submitted to NBTI Abuja, 2013 UNIDO (2006), Product Quality: A guide to Small and medium-sized Enterprises, a working paper. UNIDO, 2006, Viena 101

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