Olam invests $150M in Nigerian poultry, feed sectors
Olam International to invest in animal feed manufacturing, poultry breeding and hatchery in the states of Kaduna and Kwara in Nigeria.
Olam International (also known as Olam Group) plans to invest NGN30 billion (US$150 million) in two state-of-the-art feed mills, poultry breeding farms and a hatchery to produce day-old chicks in Nigeria.
A groundbreaking ceremony in Kaduna state last week was attended by Olam Group Nigeria and the governor of Kaduna State, H.E. Malam Nasir el-Rufai, and Minister of Agriculture and Rural Development Chief Audu Ogbeh, who was representing the president of Nigeria, H.E. Muhammadu Buhari.
“This is the latest investment by Olam in Nigeria’s domestic food and agricultural production sector after our recent investments in wheat milling assets and the ongoing development of our 10,000-hectare rice farm and mill in Nasarawa state,” said Olam’s CEO for Africa, Venkataramani Srivathsan.
“This new venture into animal feed is a win-win for Olam and Nigeria. Domestically produced meat is being hampered by a lack of good quality feed, support for farmers and availability of young stock, but consumption is set to increase. By investing in poultry and fish feed, we can utilize the wheat bran from our wheat milling operations, as well as maximize our sourcing networks to buy corn and soy from local farmers. Our investment in the hatchery will help boost poultry production and, in the long run, help reduce the country’s reliance on imports. This development underlines the continued confidence we share in Nigeria’s ambition for self-sufficiency.”
Approximately two-thirds of the total investment is committed to building and operating the facilities in Kaduna state, with the balance to be invested in an integrated poultry and fish feed mill in Kwara state.
Total annual feed capacity is expected to be more than 600,000 metric tons. The Kaduna mill will supply mainly Nigeria’s northern markets, while the southwestern region will be the main focus of the Kwara plant. Sourcing corn and soybeans locally, it is hoped the feed mills will encourage domestic production of these crops, and food security will be improved with Olam’s planned construction of in-house storage of 100,000 metric tons.
The poultry breeding farm in Kaduna is expected to produce more than 1 million hatching eggs each week to the hatchery.
Based in Singapore, Olam International is a leading agri-business operating across the value chain in 70 countries, supplying a range of products across 16 platforms to more than 16,000 customers worldwide. From a direct sourcing and processing presence in most major producing countries, Olam has built a global leadership position in many of its businesses
The company’s financial results for 2015, published in February, show a deteriorating situation compared with the previous year. However, Olam reports strong underlying performance with operational profit after taxes and minority interests up by 20.1 percent for the year to US$257 million.
“We continued to deliver strong operational performance in 2015 despite significant volatility in global commodity and currency markets,” said Olam’s co-founder and CEO, Sunny Verghese. “Reported performance was impacted by our decision to change the basis of presentation of our equity investment in PureCircle, although this had no impact on our total equity or cash flow position.”
In January 2016, Olam and French feed company, InVivo Animal Nutrition & Health, signed a consulting agreement to develop expertise in animal feed in Nigeria.