How to Start Ethanol Production Factory In Nigeria Using Cassava As Raw Material
Also known as ethyl alcohol, ethanol, is one of the most widely used industrial chemicals in the world.
Ethanol is classified into two main types: edible and industrial. Edible ethanol is primarily used in the production of alcoholic beverages, while industrial ethanol is utilized in sectors such as cosmetics, perfumery, and as an additive in refined petroleum products.
Generally edible ethanol, which is the focus of this guide, is produced by fermenting sugars and starches. It can also be extracted from cellulose-based materials, predominantly non-food plant materials such as wood, cotton, hemp and agricultural residue. Ethanol is also found in certain bacteria and marine animals like tunicates.
Ethanol In Nigeria
In Nigeria, production of starch based ethanol is common, perhaps owing to the abundance of such raw materials as cassava, maize, guinea corn and other starchy crops. For example, Nigeria is world’s largest producer of cassava, producing about 60 million mt per annum. This account for approximately 20% of world cassava output. In spite being World’s largest producer of cassava, Nigeria still imports most of its needed cassava derivates such as starch and ethanol due to inadequate processing capacity.
Estimated at about 200 million liters annually, the demand for ethanol in Nigeria is high and continues to grow. This demand is driven by its diverse applications across sectors like pharmaceuticals, beverages, cosmetics, food processing, and renewable energy.
However, domestic production at a paltry 9 million liters per year, lags far behind demand estimated at about 400 million liters annually. This has led to heavy reliance on imports mostly from Brazil and India, presenting a huge investment opportunity for local production—especially using cassava, a readily available and abundant raw material in Nigeria.
This article provides a step-by-step guide on how to set up a cassava-based ethanol production plant in Nigeria, focusing on a small-scale operation of around 2,000 liters per day (LPD). Whether you are an investor, or an entrepreneur, this post will give you insights into the market, technology, setup requirements, cost estimation, and profitability potential.
Industrial Applications
Ethanol serves a wide range of industrial purposes across various sectors.
In the pharmaceutical industry, it is widely used as a solvent and disinfectant. In cosmetics, ethanol is a key ingredient in products such as perfumes, lotions, and deodorants. The food and beverage sector uses ethanol in spirit (alcholic beverages) production and as a preservative.
It also plays a vital role in the energy sector, where it functions as a biofuel—either as an additive or a substitute for petrol. In addition, industrial manufacturers widely use ethanol, especially in producing paints, inks, and cleaning agents.
Ethanol Production: Sources and Process
Producers make ethanol from a variety of feedstocks, including sugarcane, molasses, cassava, maize, and sorghum. They also use materials like wood and agricultural waste, especially in advanced ethanol production.
In Nigeria, cassava is the preferred raw material for ethanol production. This is due to its high starch content, rapid growth cycle, abundant local availability, and a well-established supply chain that supports consistent sourcing.
The production process of cassava-based ethanol involves several key steps.
The process begins with preparing the cassava tubers—workers thoroughly wash, peel, and chop them. Next, they mill the chopped cassava to extract the starch. In the liquefaction and saccharification stage, they introduce enzymes to break the starch down into fermentable sugars.
During fermentation, they add yeast to convert the sugars into ethanol. After fermentation, the team distills the mixture to separate the ethanol from water and other impurities. Finally, they dehydrate the ethanol and store it in tanks, ready for distribution.
What You Need to Start
The following are what you need to start ethanol production factory.
| Facility/Item Required | Remark |
| Land & Building | · 1 – 2 plots
· Construct factory building, fermentation unit, distillation room, boiler house, laboratory/testing area · Locate your factory close to cassava producing belt |
| Equipment | · Cassava Washer & Peeler
· Hammer Mill/Grater · Slurry Tank · Cooking/Gelatinilization Tank · Enzyme Dozing Unit · Fermentation Tanks · Distillation Columns · Storage tanks · Boiling & Cooling System · Power Supply (Generator, Solar) |
| Personnel | · Production Supervisor
· Operators, technicians · Quality Control Officer · Accounts/Admin Officer · Logistics/Procument · Security officer |
| Raw Materials | · Fresh Cassava tubers ( app 1.5 – 2 tons for 2,000 liters )
· Enzymes & yeast · Water (purified) · Energy (diesel & Gas) |
| Licenses and Permits | · CAC registration/Company incorporation
· NAFDAC (if selling to beverage/pharmaceutical idustires) · NUPRC (if blending with fuel) · Environmental Impact Assessment · Government – for taxes, etc |
Estimated Cost and Profitability of a 2,000-Liter-Per-Day Ethanol Plant
Depending on factors such as location, source of equipment, and type of construction, an initial investment of between N50 million and N100 million can set up a small scale ethanol production plant in Nigeria.
This cost covers everything from land acquisition and site development to factory construction, equipment purchase and installation, regulatory compliance, initial raw materials, staffing, and working capital for the first few months of operation.
On the profitability side, with an average selling price of ₦1000 per liter (ex-factory price), the plant can generate daily revenue of about ₦2 million, or approximately ₦50 million monthly assuming 25 days of operation. After accounting for production costs, staff salaries, utilities, raw materials, and logistics, the entrepreneur can make a net profit of ₦8 million to ₦12 million monthly. Based on these estimates, investors can expect to recover their initial capital within 12 to 18 months, making it a financially viable and highly profitable venture if efficiently managed.
For a smaller plant with a capacity of less than 1,000 liters per day, a budget of ₦10 million to ₦20 million is generally sufficient to set it up.
Road to Market
Successfully bringing ethanol to market requires identifying the right buyers and implementing effective sales strategies. The primary consumers of ethanol in Nigeria include pharmaceutical companies, beverage and spirit manufacturers, cosmetics and personal care producers, industrial chemical users, and fuel blending companies. There is also growing demand from exporters and regional distributors within West Africa who are seeking reliable local sources.
To penetrate the market, producers must adopt a strategic approach that combines direct business-to-business sales with relationship building. Establishing long-term supply contracts with key industrial users can provide stable demand and predictable revenue. In addition, having a visible online presence through a professional website and active social media channels helps attract inbound inquiries and build brand credibility.
Participating in trade exhibitions, networking with procurement managers, and leveraging government-backed programs aimed at import substitution can also open up valuable market access. For smaller producers, working with ethanol brokers and agents may offer a faster route to consistent sales while building capacity to handle large-scale distribution.
Final Words
The ethanol production business in Nigeria presents a lucrative opportunity for investors and entrepreneurs, especially when driven by locally available raw materials like cassava. The growing demand, rising cost of imports, and push for renewable alternatives create a perfect environment for success.
With proper planning, regulatory compliance, and efficient operations, a 2,000-liter-per-day ethanol plant or even less, can become a highly profitable venture.
Buchi creates content and leads the Team at Kobotalk Management Services; a business development and investment consultancy firm. He provides strategic advisory to help SME's, small business owners and HNI's grow profitable business and make informed investing decisions.
