To an average poultry farmer and producer of feeds in the North, the news that Olam, a company with massive investment in rice and other crops, is now also entering the poultry industry, is a cheering one but which has left some others quite uneasy.
In an exclusive interview with Daily Trust, Mr. Ade Adefeko, Vice President, Corporate and Government Relations, Olam Nigeria, said the company will in September, commission its integrated poultry farm and animal feed mill in Kaduna, which he said will include the largest hatcheries to produce day-old chicks in the country.
He said when commissioned, the multimillion dollar investment will utilise around 180,000 tonnes of corn and 75,000 tonnes of soya beans, thereby boosting the farming of the crops and contributing to the development of the Nigerian poultry and aquaculture sectors.
According to him, the 50,000 metric tonnes of on-site storage, in addition to a similar capacity of outsourced storage, will support food security and price stabilisation for farmers, adding that training on farming practices will be offered to farmers in collaboration with federal, state and non-governmental agencies to increase farm yields and crop profitability.
Adefeko added that the project, which gulped about US$100 million), will have a state-of-the-art animal feed mill, poultry breeding farms and hatchery to produce day-old-chicks. It is located in Chikpiri Gabas village, Gwagwada, in Kaduna State.
When fully operational, he said, over one million high-quality layers (for eggs) and broilers (for meat) be produced weekly.
He said the feed mill will have capacity of 300,000 tonnes per annum to offer competitively-priced and specially formulated feeds for local poultry farmers. He added that the company would provide veterinary field support for local poultry farmers in partnership with InVivo Animal Nutrition & Health.
Adefeko said in partnership with the Kaduna State Government, the company is developing a model for supplying chicken, meat and eggs for its schools meals programme at below-market prices.
“Also, a Corporate Responsibility and Sustainability (CRS) agenda covering education, health and sanitation will be created in partnership with neighbouring communities and an integrated rainwater harvesting programme will help the site meet its water requirements and solar power generation facilities will reduce dependence on fossil fuel based energy,” Adefeko said.
Some of the poultry farmers, who spoke with Daily Trust, expressed optimism that the project would be a game changer for the poultry business in the country, adding that there is none like it in the North.
Architect Kabiru Ibrahim, President of All Farmers Association of Nigeria (AFAN) and a one-time president of Poultry Association of Nigeria (PAN) stated that it is a good thing for Nigeria that Olam has set up this farm.
“It is a breeder farm and they are going to be supplying 1.2 million pullets weekly and they are doing broilers as well,” he said.
Arc Kabiru noted that he does not see Olam’s presence in the poultry sector as a threat to smallholder farmers but rather a challenge to the large scale poultry farmers.
“No, it is not a threat to small producers, it’s a threat to the big players because small farmers would even get the pullets cheap and they would also have feed because they are also producing feed there. There is no monopoly, we are 200 million people. Their capacity is very high so people would buy feed, it would be cheaper than what you buy from other places,” Kabiru told Daily Trust.
The farmers’ leader stressed: “In the North here, we don’t have anything like that, the business was monopolised by the South West, we have to buy our pullets from there, our feeds also. Only few feed companies are here in Kaduna and they are not playing very well.
So if anybody is coming here to play in the North, that person is going to have a breeder farm, that farm is going to help us get good day old chicks. If they are going to produce feed also, they are going to dilute the market and the prices would come down,” he emphasized.
Abdulgaffar Bashir Gula, a poultry farmer in Katsina, stated that depending on the services they are going to offer, “I see it as a development for the northern part of the country because most times we even export eggs to neighbouring countries even though it is not completely a legal business. And during the Ramadan fasting period, there used to be shortage of eggs because the resources are very little and the demand usually high.
“It would at the same time provide job opportunities. Recently, even the Minister of Agriculture and Rural Development expressed concern that the population of Nigeria by the year 2050 or so would grow to about 450 million people, so I don’t think it would be a problem to our market,” he added.
However, for some of the small and medium scale feeds producers in and around Kaduna, Olam’s massive investment in feeds has heightens fear of going out-of-business because, according to them, they would not be able to compete with the company which has both financial and technical know-how to take their space in the market.
Aminu Kabir, owner of KK Feedmill, Katsina, said the entrance of Olam into the feed business will affect them significantly because Olam produces some of the basic components (such as rice bran from their rice processing mill) for feed production.
He noted that the company will crash prices – a situation that will make it extremely difficult to compete favourably because for them, they have to buy the feed components.
Similarly a source at Hybrid Feeds in Kaduna who asked for anonymity expressed fear that Olam, with its superior technology, would produce brands that will give them tougher competition in the market. For them, a larger share of their market will be gone for good.