THE PSALTRY EFFECT: WHAT SERIOUS INVESTORS MUST UNDERSTAND
In the last few months, I have engaged more than ten prospective investors. Two of them made a very interesting observation: they quickly referenced Psaltry International and rightfully so. Psaltry is a true benchmark for success in Nigeria’s cassava-processing landscape.
However, there is a major gap in how some investors interpret the “Psaltry story" and it’s important to address it clearly.
Both investors failed to see the intentionality behind Psaltry’s success both from the founder and the investors who funded it. One of them suggested that we should “work around $400,000.” As much as $400,000 is substantial amount of money, it cannot cover the CAPEX or OPEX required for a minimum viable, sustainable cassava-processing operation.
Here’s the reality:
In 2013, Psaltry started with a 20-ton/day starch plant, which required approximately 100 tons/day of fresh cassava input.
That level of input wasn’t accidental, it was very intentional, calculated and necessary.
With hands-on experience in cassava processing, I can confidently state:
Any cassava derivative plant that cannot process at least 100 tons of fresh roots per day is structurally positioned for failure due to fluctuations in supply, high COGS, low efficiencies and overall sustainability issues.
This is why accepting $400,000 would have been a costly mistake:
- It wasn’t enough to acquire the right-grade production line.
- Equipment bought under that constraint cannot be upgraded later you would need to buy a new line.
- Power generation would fall short.
- Logistics, water systems, waste management and operational buffers would all be underfunded.
The project would run flat and the business would inevitably sink.
Many people admire Psaltry’s outcome, but very few understand the depth, discipline and scale efficiency that made that outcome possible. Cassava processing is not a “small scale → big profit” business. It is an industrial system and the economics only work from 100 tons/day input and above.
If numbers frighten or overly excite an investor/founder, it may be a sign they are not yet ready for the reality of agro-industrial processing.
Our goal is not to replicate Psaltry on the surface. Our goal is to replicate and improve the principles that made their success possible: scale, structure, intentionality and sustainability.
This is the only way to build a cassava processing business that will not only survive but endure/thrive.
Hence, we will sustain our tempo, we need seed investor(s) for our Factory Building & BG Processing as much as we need the BOI for working capital and equipment financing.
Anything worth doing is worth doing well.
By: Enitan A’Azeez
(Cassava Chips Priest)
Founder, Aligo Energies Ltd.
*** 🔊✉️ From Aligo Energies Ltd.
