Oduntan: Rising Demand for Local Chicken Will Boost Poultry Production
Managing Director of Natnund Foods Limited and National President of the Poultry Association of Nigeria, Dr. Ayoola Oduntan, in this interview, reasons that if government can provide basic infrastructure and control the smuggling of imported chicken into
Can you please give the estimate of the worth of Nigeria poultry industry and the production capacity Nigerians should expect, to do away with importation of chickens? Before going into what the industry worth, let me first state that poultry business is capital intensive and is a long term business. From our records, we have been able to established that the whole industry is worth about N600 billion. As the president of the Poultry Association Nigeria, we provide industry statistics at our annual summit which summarise our business volumes and contribution to the economy.
Let me lay the idea of the figures involved in one million tons of chicken to give the public a better understanding of our activities. One million tons of chicken is one thousand million kilogram, which is one billion kilogrammes. Each kilogramme of chicken right now is sold at about N700. So in effect, the value of one billion chickens is N700 billion for Nigeria. It is probably closer to trillion than N700 billion; that is just for the frozen chicken, we have not spoken about other areas. What distinguishes the poultry industry from others is that to produce one million tons of chicken, you will need to feed two million tons of birds which will require about one million tons of maize; that is for the broiler. The layers would consume over one hundred million tons. Our consumption of maize as a country is about three million tons. Meanwhile our total production of maize in Nigeria is about nine million tons. So, we consume about 30% of the maize produced in this country as an industry.
The estimate I have just given is for maize. Statistic has it that an average farming family in Nigeria produce two tons per acre and they farm twoacres. It means a family produces four tons of maize. If that’s the case and we are consuming two to three million tons, that means we need a million families to produce maize for the poultry industry.
In many ways, this will help the country solve problem of unemployment because there would be division of labour in the process of transporting till its last point of usage in the farm. This is possible because of the number of value chain the industry affects in the country while the process is on. People will work in feed mill, drivers are involved and many other ad hoc staff.
What is the value of your own business and what is your target The answer to the second part of the question is that we are targeting 10% of the total production over the next five years. Regarding the first part, we are a private company and by law, we are not oblige to divulge our figures in the public but all I can say is that our investment is in billions of naira and our turn over is also in several billions of naira. Let me give you a simple example, we have a farm here in Awe which we call BC 10. It is where we have the commercial layers. On the day we were moving into that property in 2007, I said to myself; here sit 100million Naira. It has a capacity for 40,000 layers. At the point of lay at that time, each one was valued at N1, 000 layers. The house and the cages at that time had cost us about N60million.
How long will it take for Nigeria to meet its need locally? If we are given the necessary support of funding, raw materials and basic infrastructural support, this industry will be able to meet the poultry need of Nigeria within two years. I added infrastructure deliberately because of what we incur financially everyday to power our production. For those who are familiar with Ibadan – Oyo – Ilorin roads, where our farms are scattered, the roads are abysmally poor. We thank God, the road from Ibadan to Oyo was fixed about two years ago but unfortunately, the quality of the construction was poor and is already deteriorating again. The Oyo to Ilorin end of it which was awarded during Obasanjo’s first tenure is still uncompleted as I speak.
What informed your decision to go into farming? This company is a consequence of the bankruptcy of a French Group call Amo Sanders. By 2002, Amo Sanders, which was then owned by a French multinational, was tired of Nigeria and they decided to sell these companies. I had the opportunity to be there at the time and we bought what was left of it. We started as Amo Byng Nigeria Limited in 2003. At that time, things were very though. When people say things are tough now, I smile because if you have been a farmer, you would know that it is all in circles; it would be very tough and gradually ease out. By the grace of God we have built over those years to become one of the leaders in the poultry value chain. Amo Byng Nigeria Limited is a producer of feed and concentrates for poultry, fish and cattle.
We have three factories and we are currently building a fourth. The three factories are in Awe, Oyo State, Jos and Aba. And we are currently building our biggest factory in Owerri. We have distributors around each of these factories and they now have sub-distributors. That’s how we are able to distribute our products to the nooks and crannies of this country. Amo Farm Sieberer Hatchery Limited is the second company that produces day-old chicks and also distributes around the country. It also sells point of Lay; this is for those who don’t want to buy day-old chicks, but are ready to buy birds old enough to lay eggs. We package eggs for supermarkets and hotels. Our sister company natnundO foods also sell frozen chickens.
The third company in the group is into local manufacturing of veterinary pharmaceuticals. We produce series of antibiotics and vitamins in this country, and also provide laboratory services to farmers and importers of animal health products. We produce equipment that helps farmers to develop. Right now we have different projects across the country. Where we sit down with prospective farmers and guide them through the process. Despite all the challenges, what are the motivating factors? We are here because we want to show that with a little bit of patience and support, Nigeria can be self sufficient in the production of chicken. natnudO for example, is willing and able to spearhead this drive. We are a Nigerian company, we have all our investment here and we are totally committed to the industry. I have done poultry for 25 years and we have nowhere else to run to. We are willing to help Nigeria in her strive to self sufficiently in agriculture.
We are here because we want to show that with a little bit of patience and support, Nigeria can be self sufficient in the production of chicken. And natnudO is willing and able to spearhead this drive. We are a Nigerian company, we have all our investment here, and we are totally committed to the industry. I have done poultry for 25 years and we have nowhere else to run to. We are willing to help Nigeria on its part to self sufficiently in agriculture. Stakeholders in the Nigeria project have many things to gain by supporting local production by a Nigerian company.
Brazil is a ready example of a country that has met the need of local demand and exportation. If we look at the map of the world, you would see that South America and Africa must have been joined together at one point or the other. So you can replicate the kind of weather we have here to what they have. If Brazil in the space of 20 years can become the largest exporter of chicken in the world; generating billions of dollars for the country in revenue, why can’t we at least satisfy our local demand? We are committed to make this happen, but we need stakeholders’ support.
If Nigerians are able to increase their consumption of local chicken, I believe poultry farmers would be able to increase their businesses three or four folds. As at today, about 1.2 million tons of chicken is smuggled into this country every year. Meanwhile Nigeria total local production is about a quarter of that; about three hundred thousand. So imagine what would happen if we increase our output to five hundred thousand. That means we would all have to double our current production. From anywhere we chose to look at it, there’s still a lot of room for growth in this business.
How has it been running the company and what did you do to get it to where it is? Like I have pointed out, this country is a difficult one to run business. I have travelled around the world on this business to see what happens elsewhere. Agriculture is not easy. It requires consistency and commitment. The company was moribund when we took over and we are Nigerians in Nigeria. We saw the potential. I was a young man then. I didn’t dwell more on the negatives; I focused more on the positives. In the end, the reason why I went to study veterinary medicine still prevailed. In this country we can generate jobs and bring prosperity from nothing. That was how we started. We started very small. It amazes me now when I receive phone calls from bankers. I have shed tears in a bank before. It was so bad that a banker called me and said “you have a proposal in Agric, it would not fly because the very day you brought that proposal, someone simply put it in the bottom of the drawer.”
I give this background to explain the fact that we have both the challenges of the banks and infrastructure in the industry. In Awe and environs, a lot of power lines you see there were built by Amo Farms. Also, almost all the roads here were built by us. I have paid 36% as bank interest on the business before, which made it look as if for years, we worked entirely for the banks. I was happy doing it because we were trying to build something. Though the banks didn’t support us initially, when they realised that we are here to stay and committed to what we are doing, gradually, they started to run towards us. Our team then out-worked our competition both day and night. That was the kind of passion and energy we brought into the equation at that time. As for profitability, I can say that we are hundred times bigger than what we were at the beginning. Agriculture is usually a low margin business but by the grace of God, we are not complaining. We still believe we have not even scratched the surface, because we are not competing against ourselves in Nigeria. For the chicken business, we are competing against influx, smuggled poison from different parts of the world that our people are eating.
I have always insisted that if we are able to increase our consumption of local chicken, we would increase our business three or four folds. Let me again lay some statistics. We believe that about 1.2 million tons of chicken is smuggled into this country ever year. Our total local production is about a quarter of that; about three hundred thousand. So imagine what would happen if we increase our output to five hundred thousand. That means we would all have to double our current production. So there’s still a lot of room for growth in this business.
What measures are in place to encourage new prospects in poultry? We are trying to create a scenario where different categories of people will get involved in the poultry business. We have introduced the natnuPreneur Scheme, through which we intend to provide inputs, trainings and market for poultry farmers. The initiative is currently being taken to major cities to awake farmers and revives moribund poultry farms. We want to empower them from the production end to the selling end. It will help them grow their businesses faster. We have a pilot programme of 250 farmers now and about to expand to 1500 farmers nationwide. The other part on seller end is that we want to empower young and new entrepreneurs into selling poultry products. What they need is basic investment of about three to five thousand Naira. The major idea is to bring the moribund farms back to functioning.