How to start a charcoal business in Uganda

How to start a charcoal business in Uganda. Charcoal is a very valuable fuel for both household and industrial use.

Charcoal is made from the incomplete burning of carbon majorly wood.

Here in Uganda, charcoal is mostly made by burning different species of wood (Acacia nilotica, Anogeissus Elaeocarpus, Azadirachta indica, eucalyptus and many more).

The charcoal burning process is carried out in a controlled environment where the wood logs are covered so that they get little or no supply of oxygen for some calculated amount of time determined by the producer.

Charcoal is ranked in Uganda as the number one source of fuel because of the following reasons.

Charcoal is cheaper to buy when compared with other household fuels like kerosene and cooking gas.
Charcoal cooks food faster than kerosene.
Its supply is consistent unlike the supply of other fuels which have inconsistent supplies arising from factors like importation delays or strike actions by the local marketers.
It can be prepared locally unlike kerosene and gas which go through complex refining processes.

Charcoal is a fuel that has high demand, especially in big cities and towns like Kampala, Mbarara, Fort Portal and Gulu.

This is because a lot of people in these cities consume a lot of roasted foods like roasted fish, corn, plantain and all other forms of barbecues.

Most foreigners in these cities, especially Italians, Chinese and Indians, find charcoal very important because they use it to prepare most of their local recipes.

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Business Opportunity in Charcoal

The business opportunity in selling Charcoal comes from the fact that despite its high demand in the cities, its availability is always limited because its production is almost impossible in the cities and towns.

In most cities and towns here in Uganda, there is practically no tress to cut or burn down, this means almost all charcoal highly consumed in cities and towns is brought in from neighbouring rural areas.

Looking at this, one can already see a business opportunity in supplying charcoal which involves going to the rural areas, buying it and selling it in the cities.

A sack of charcoal costs around 30,000 UGX to 40,000 UGX in Kampala.

How to Start Your Charcoal Business in Uganda

The following are the necessary steps to take into consideration when thinking of starting the charcoal business:

1) Look for Market

You need a market for your products. Who will buy your charcoal? You need to search for customers and you can do this by;

Visiting hotels to find out what their needs for charcoal are.
Visiting big stores and shopping malls like Shoprite, to find ways of becoming their supplier.
Visiting several restaurants especially foreign ones like Chinese and Italian restaurants.
Visiting schools and asking them to become their partner
Getting a busy place (busy street, market) where people can buy your charcoal

Don’t start this business without clearly understanding who your customers are. I talk about this from experience.

2) Make a business plan

Your business plan will majorly look at buying, transporting and selling your charcoal. You need to make a plan of how you will do these 3 steps (buying charcoal, transporting it and selling it)

In your business plan, you need to devise a plan where you will get your capital, where you will buy your charcoal from (preferably rural areas), who your suppliers will be, how you will transport your charcoal, how you will sell it and who your customers will be.

The clearer this business plan is, the more likeliness your business will succeed.

3) Raise Capital

You will without a doubt require some money to start a charcoal business in Uganda.

The capital required to start a charcoal business in Uganda is 1M UGX to 3 M UGX.

But if you have little capital you can still start this business for as low as 300,000 UGX to 500,000 UGX (If You don’t transport your charcoal)

There are many ways you can raise capital to start your charcoal business in Uganda from saving your own money, to getting financial assistance from friends and family and also getting a bank loan.

For More See: How to Raise Capital for a Charcoal Business in Uganda

3) Get Suppliers

Unless you will do the charcoal burning process yourself, you need suppliers who will supply you with charcoal.

Many people in rural areas do nothing else but burn charcoal, so getting in touch with these people will be very great for your business.

As you look for a supplier consider the following;

Price: Get a supplier who will give you charcoal at a good price. They should not give you a very high price.
Quality: You need good-quality charcoal. Look for suppliers who burn good species of trees that produce good quality charcoal
Location: If you are to buy from rural areas to towns and cities, you need to put the location of your suppliers into consideration. Look for suppliers who are not far away from the road so that you can easily load your charcoal and transfer it to the town/city.

4) Prepare your store

Charcoal needs to be kept well and in a dry place other ways, it can easily get spoilt.

After getting a supplier, you need to prepare a place where your charcoal will be stored before you sell it.

Your store needs to be dry and free from all moisture and water. Its roof should not be leaking.

A store without a cemented floor works best for charcoal.

Your store should be far from your kitchen cause charcoal can easily catch fire and burn down.

Keep your store free from rodents that may bite and tear the sacks where the charcoal is packed.

Your store needs to be secure so that thieves won’t break it and go away with your investment.

5) Find Transporters

You need to transport your charcoal from rural areas to urban areas.

If you have your lorry, then you can jump this step and go to the next step below, but if you don’t then you need to know this.

Transporting your charcoal from one place to another will cost you money. Depending on where you are transporting your charcoal from and to, transportation alone may cost you almost half or even the same amount of money you used to purchase the charcoal.

Transporting charcoal is risky because there is a possibility of the truck transporting your charcoal getting confiscated by the law enforcers (police) because charcoal is got from burning trees, most law enforces want to know if you legitimately got your charcoal or you illegally cut down trees and burnt charcoal.

To stop this from happening, you need to get a licence from the town council of the area where you are buying charcoal clearly showing that you legally burnt your trees and you are known and authorised to do so.

This permit/licence will allow you to freely transport your charcoal from one district to another without much interference from the police.

6) Market Your Business

Any new business needs marketing for it to get known. You have to do the same for your charcoal business.

You can promote your business via the radio, word of mouth and even social media (Facebook, Whatsapp)

Marketing your business helps you increase sales because the more people get to know your business and your address, the more you are likely to make sales.

Use the most efficient methods that you feel will easily reach your targetted customers.

For more see: How to Market Your Charcoal Business in Uganda

Your Turn…

That is all that is required to start a charcoal business in Uganda. However, you need to look for the following when starting your charcoal business.

Be careful not to be scammed in any way.
Make sure the charcoal is of good quality with high carbon content, from a good type of hardwood and is properly prepared.
Please don’t make any transactions over the internet or phone, simply visit the sellers or producers to make your purchase.

Selling charcoal is not a smart business, don’t expect to be smart in this business.

But if you make money at the end of the day, do you care if your business makes you dirty? Me I don’t care.

That is all for today. What do have to say about starting a charcoal business in Uganda?