Olam farms faces challenges

When Olam International, a leading agri- business operating across the value chain in 70 countries, decided to set up shop in Nigeria, it was meant to be the largest integrated animal feed mills, breeding farms and hatchery with an investment of $150m (N30bn).

The Group has been in Nigeria for 30 years and is here to stay. The intention was and still is, to address the poultry supply gap. Olam’s facilities directly address a significant supply gap for poultry meat in Nigeria, giving farmers and distributors access to high-quality feed at competitive prices. In addition, Olam’s team of field veterinarians are engaged, specifically, to train up to 10,000 farmers a year in best poultry farming practices.

Given that around 75 per cent of poultry farming is managed by smallholders, Olam’s poultry initiatives are designed to indirectly create 150,000 to 200,000 ruraljobs for Nigerians as the entire sector is stimulated.

Olam estimates that poultry meat consumption among Nigerians could increase up to 10-fold by 2040, provided domestic supply can meet increased demand and based on prices becoming more

affordable for Nigerians.

It was also projected 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 per year.

This will also result in a reduction in the foreign exchange spent on illegal low- quality frozen imports, which is currently estimated at US$150.0 million to $200.0 million per year.

Commending Olam’s venture in Nigeria, the then Minister of Agriculture and Rural Olam And The Challenge Of Poultry Business Development, Chief Audu Ogbeh, said that

“This development symbolises the national growth and stability of our nation. 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


Speaking in the same vein, the governor of Kaduna State, Mallam Nasir Ahmad el-Rufai, noted that the company made a commitment to invest in Nigeria. 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.”

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 metric tonnes per hectare, versus 3.0 to 3.5 metric 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 200 veterinary, aquaculture and agronomy graduates who will receive hands-on learning opportunities at the company’s state-of-the-art facilities over a two-yearperiod. The world-class facilities put in place by Olam across the nation are intended to provide high-quality, cost- effective products that will help farmers and rural Nigerians to prosper.

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.

The 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.

This reporter was at the commissioning of the facility in Kaduna. In the company of other reporters,’ we were taken round the facility. We had the opportunity to interact with senior management staff of the group who allayed fears that the company was in competition with local farmers.

The management of the facility, at that time, were emphatic that it was not out to compete with local farmers whom they see as their customers. Rather, its investments are in the value-chain and not related to commercial broiler growing and selling of live birds. It was also part of the plan to bridge the demand gap in the supply of Day-old Chicks (DOC), and Feed business, while providing technical farm management support to all categories of farmers.

Recent worries in a section of the poultry business that Olam was about to muscle small holder farmers out of business is out of context with the aims and objectives of the company. Dr Vinod Kumar Mishra, Olam’s General Manager, (Animal Feeds)said: “How can we be in competition with our customers?

We will only produce and sell feeds as well as day-old chicks for local poultry as a multinational firm with a mandate to operate feed mills and hatcheries. So far, Olam has not built any layer farm and neither does it intend to build one.

Olam is in Day-old-chick (DOC) and Feed business, they sell and provide technical and farm management support to all category of farmers, including some large farmers. They also support the revival of moribund farms, in order to put the investments made by the local Nigerian farmers, entrepreneurs to productive use, and generate employment for the local community.

During that visit, a senior manager of Olam expressed concern about the low per capita egg consumption impacting small-hold farmers and suggested a sustained media campaign to promote egg usage.

He debunked misgivings based on misinformed health claims that egg consumption increases cholesterol levels. It also attributed the low egg consumption to poverty as egg comes low in the food needs of the rural poor.

These are likely to be the factors hampering the business of small poultry farmers and even the large ones.

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