December 1, 2015
Olam enters feed business in Nigeria
Olam International Limited has announced that its Grains platform plans to expand into the animal feed business in Nigeria.
The expansion involves investments in setting up poultry and fish feed mills as well as hatcheries to produce day-old-chicks.
Following a detailed study of the sector, the company has chosen Nigeria as its preferred entry market. Favourable criteria for investments include a growing meat consumption per capita, a high degree of market fragmentation with room for market penetration, a low extent of vertical integration, a high scalability potential, and conducive supply and demand factors impacting the feed raw material trade.
In Nigeria, increasing urbanisation and a change in consumer preference towards more protein-rich diets is driving a strong demand for poultry and aquaculture products and the commercial feed market is expected to grow at over 10% CAGR over the next five years, Olam said.
The investment builds on Olam's existing strengths in origination, which includes extracting raw material cost efficiencies, sharing of port infrastructure, sourcing arbitrage, trading, ocean freight and risk management.
In addition to bran from its flour mills, Olam will leverage its local procurement network for other inputs required for producing poultry and fish feed.