MEAT, POULTRY, FISH AND DAIRY
The development of production infrastructure for meat, poultry, fish and dairy products is very expensive and can take many months to complete. There are however many opportunities in West Africa for “brown field” agribusiness development due to DFI, Sovereign, and sub-national funded projects that have fallen into disuse as a result of sub-par management, inefficient business model, market misalignment, and inadequate working capital, amongst others.
These rejuvenated assets provide a quick start opportunity that lead straight to production and positive cash flow. This is combined with the establishment of community networks that actively support and harness out-grower schemes to provide additional capacity to processing and distribution operations, as well as to foster strong community bonds.
A GROWING MARKET
The rapidly growing and urbanising population of West Africa is becoming increasingly dependent on imported food in order to meet nutritional needs. Nigeria spends $700 million annually on imports of fish, $2 billion importing 1,200,000 metric tons of poultry meat annually, and more than 20 million eggs are imported daily. In addition, 90% of dairy products in Nigeria are imported at the cost of $1.2 billion dollars annually.
The growing volume and cost of imported food is causing economic hardship on both the individual and national level and puts pressure on the local currency.
The cost of imported meat is a serious drain on foreign exchange earnings. Hence, import substitution is a key theme for government policy.
Food/protein deficit is exacerbated by:
Lack of modern farming practices
Relatively meagre indigenous protein supplies are often supplemented with bush meat that has a host of health concerns, as well as sustainability issues.
Alternative low cost protein sources will help significantly reduce demand for bush meat and thereby provide positive social and environmental impact.
Poor rural populations will also benefit from high yielding and profitable direct and indirect employment in meat, poultry, fish and diary production. Governments will benefit from increased economic activities and taxation, as well as a reduction in youth restiveness due to greater employment opportunities.
There are many obstacles to successful agribusiness development in West Africa, particularly where substantial infrastructure and land development is required: fragmented business model, land acquisition, access to critical infrastructure, community engagement, site preparation, logistics, lack of debt financing, currency volatility/convertibility, and many more.
Also the large-scale development of commercial farms is often fraught with delays and high capital expenditures that decrease investor returns.
However, major gaps in investment have lead to particularly attractive margins in the meat, poultry, fish and dairy sectors in view of increased protein demand and low production capacity. Our strategy of utilizing existing facilities further increases margins and reduces start up time.