September 20, 2017
Olam poultry feed mill inaugurated by Nigeria President
Olam International Limited welcomed the President of Nigeria, Muhammadu Buhari, to inaugurate its poultry feed mill and day-old-chick facilities in Kaduna State, Nigeria, the company announced.
It concurrently started production at an integrated poultry and fish feed mill at Ilorin in the region.
Together, the two state-of-the-art animal feed mills, poultry breeding farms and hatchery have a investment of around US$150.0 million.
Addressing the poultry supply gap
With a combined capacity of 720,000 tonnes of poultry feed annually, Olam's facilities directly address a significant supply gap for poultry meat in Nigeria, giving farmers and distributors access to high-quality feed and day-old-chick at competitive prices.
In addition, Olam's team of field veterinarians will train up to 10,000 farmers a year in best poultry farming practices.
Given around 75% of poultry farming is managed by smallholders, Olam's poultry initiatives have the potential to indirectly create 150,000 to 200,000 rural jobs for Nigerians as the entire sector is stimulated.
Olam estimates that poultry meat consumption among Nigerians could increase up to tenfold by 2040, provided domestic supply can meet increased demand and based on prices becoming more affordable for Nigerians. This would require the poultry feed and day-old-chick supply in Nigeria to grow at over 10% CAGR per year.
Olam projects that its investment will enhance domestic poultry production by approximately eight billion eggs and 100 million kilogrammes of poultry meat - the equivalent of 40 eggs and 0.5 kilogrammes of chicken per Nigerian yearly.
This will also result in a reduction in the foreign exchange currency spent on illegal low quality frozen imports, which is currently estimated at US$150.0 million to US$200.0 million per year.
Olam's Kaduna State development "symbolises the national growth and stability of our nation," Chief Audu Ogbeh, Nigeria's Minister of Agriculture and Rural Development, said. "It will contribute to the reduction of crime and the rural agenda. Olam is thoroughly Nigerian and since its incorporation here in 1989, it now operates across the length of the country. I would like to acknowledge their investments in the country."
"Today, we inaugurate the largest direct investment in Kaduna State in 10 years," the Governor of Kaduna State and Chief Host, Mallam Nasir Ahmad El-Rufai, commented. "When I first met with Olam representatives in 2015, I knew it was a meeting of minds. The company made a commitment to invest further in Nigeria and the fact that we stand here today shows it is a reality. This facility will help us on the road to economic diversification and food security as well as producing thousands of direct and indirect jobs. Olam's investment will create an industrial agri-hub to incentivise our farmers to produce more by providing good products and support, quality control and access to domestic and global markets."
Enhancing fish supply by supporting fish farming
In Kwara State, Olam's advanced new fish feed manufacturing facility will boost feed supply to help meet rising demand in Nigeria for fish - currently two million tonnes per year.
Future fish consumption faces supply challenges of overfishing, water pollution and global warming. Production from natural habitats is expected to stagnate or even decline, Olam said.
The company added that fish-farming is essential to meet the supply gap and reduce the need for imports - currently almost 700,000 to 800,000 tonnes of fish and marine products are imported annually, resulting in a foreign exchange outflow in excess of US$1.0 billion.
One of the barriers to increasing production is readily available, affordable and good quality floating fish feed - it currently accounts for over 70% of the local farmers' production costs, according to Olam.
The Kwara mill has an initial capacity of 75,000 tonnes of fish feed per annum that can be further scaled up.
Stimulating the rural economy
Olam estimates that its local sourcing of raw materials such as soybeans, corn and cassava for its animal feed operations will positively impact more than 300,000 smallholder crop farmers. The company is specifically focusing on boosting the productivity of soybeans in Nigeria, currently at below 1.0 tonnes per hectare, versus 3.0-3.5 tonnes per hectare in Brazil and US. To this end, Olam is collaborating with the International Institute of Tropical Agriculture, Ibadan to supply farmers with high-yielding soy seeds.
In another pioneering effort, Olam has created internships for around 100 veterinary, aquaculture and agronomy graduates who will receive hands-on learning opportunities at the company's state-of-the-art facilities over a two-year period.
"We are proud to welcome His Excellency (Muhammadu Buhari) to our latest investment. We have leveraged our deep knowledge of Nigeria - 27 years experience across exports, imports, manufacturing and farmer engagement - to identify the needs of Nigerian consumers," Olam's managing director and CEO for Grains, KC Suresh, said.
"Our world-class facilities will provide high-quality, cost-effective products that will help farmers and rural Nigerians to prosper. In the same way that Olam Grains has built a highly successful wheat milling footprint across Africa, we will be looking to scale our animal feed operations, both in and beyond Nigeria."
- Olam
