CONTINUOUS NEED FOR AN EXPANDED ANIMAL FEED MILLS|By Idika Aja, ACS

Feed milling is the process of passing different food material (solid/liquid) through a machine to form pallets or cake for feeding animals.  There are different types of feeds; poultry (Layer, broiler, turkey, etc.), dog, cat, pig, goat, horse, etc.  

The Africa animal feed sub-sector has been experiencing growth and will continue in the near future due to strong fundamentals. In Nigeria, feed production is thriving; therefore, the potential of having an expended feed mill in Nigeria is very good.  Population is favourable; demand is huge and will continue based on strong fundamentals.  The rate at which poultry products are consumed can be linked to the geometric growth in population. With the increase in population comes a high demand in production of poultry and its allied products.  Also, due to increase in animal farming, feed mill business has become lucrative in Nigeria. Collaborating the situation a veteran in the sector; Dr. Daniel, Okeke, CEO Olivia Chicks Limited, Abuja, opined that “As long as we are recording growth in the population, there would be an equal growth in the feed industry.  Due to an increased consumer demand, the livestock sub-sector has been growing at more than 10% over the past 5 years.  This growth has to be met by an equal increase in the feed industry” 

Also, in his article titled “Bright prospects for Nigeria’s animal Feed market’ Shem Oirere stated that Nigeria was ranked number 40 globally in the 2015 AllTech Global rankings and one of the African feed markets that recorded more than 30%, at a time when the overall feed industry growth for Africa, with 2081 feed mills and total feed tonnage of 39.5 million metric tons, averaged 13%.  

In 2017, Nigeria was adjudged the highest producer of eggs in Africa.  The country’s poultry market was put at N80 billion consisting of 165,000 metric tons of birds; producing 650,000 metric tons of eggs and 290,000 metric tons of poultry. Despite this, Nigeria was and still unable to meet its local demands.  Statistics showed that over 3 million metric tons of poultry was imported through the Republic of Benin from 2009 to 2011.  

But the trend is changing. From Alltech 2020 global feed survey; Africa recorded the highest growth in feed production of 7.5% from 40.7 MMT in 2018 to 43.7 MMT in 2019, when the world global feed production dropped by 1% in same period from 1,138.2 MMT in 2018 to 1,126.5 MMT in 2019, though Asia-Pacific recorded the highest production of 384.5 MMT and 362.2 MMT in 2018 and 2019 respectively.  By specie, broiler feed had the highest production of 307.3 MMT followed by pig feed – 260.9 MMT.  Nine top countries with highest feed production in 2019 are USA-214.4; China-167.9; Brazil-70.4; Russia-40.5; India-39; Mexico-36.2; Spain-34.8; Japan-25.3; and Germany-25 all in million metric tons. Though Africa was not among the top nine countries, it recorded the highest growth (29%) in pig feed production from 1.1 MMT in 2018 to 1.4 MMT in 2019, when other continents apart from North-America recorded negative growth. 

This achievement is not unconnected to the huge investment the sub-sector has been having for the past 5 years. In 2017, for example,  Olam International Limited invested about USD$100 million in an integrated poultry and feed mill facility in Kaduna State on an 800-hectare land size, with a target to produce up to 1,000 metric tons of feed per day and about 25,000 metric tons of feed per month.  The firm also has an integrated fish mill in Ilorin, Kwara State; giving a combined investment of USD$150 million and combined capacity of 720,000 tons of poultry feed annually. Other producers making waves are Top feed Limited, Premier Feeds Mills, Animal Care Feeds, Chikum Feed, Livestock Feed, Bread well Feed, Vital Feed, Hybrid Feed, etc.

Notwithstanding, domestic production is far below consumption and demand. An USDA report in April 2018 posited that the Country’s animal feed-segment is still under developed as most poultry, aquaculture and other livestock operations in Nigeria spend about 70% of their operational costs on feed, indicating its huge demand in the sector. Also, an USDA staff unofficial assessment Gain Report issued in May 20, 2019, stated that Nigeria’s annual fish consumption was about 2 million metric tons with just less 20% supplied through land-based aquaculture production.  The report also projected that with moderate costs, Nigeria poultry and meat consumption will increase tenfold by 2040, with yearly per capita egg and poultry meat consumption at around 30 kg and 1.7 kg, low compared to U.S. consumption of 279 kg egg/capita/year and 100 kg poultry meat/capita/year.

From the foregoing, an expanded feed milling is imperative. It is crucial to the sustainability of a viable livestock production enterprise as it will boost feed supply and help meet rising demand. It will also reduce import and smuggling and save the country of its hard earned foreign currency and there is the need to see to the reduction of feed import.  In 2017, fish and marine products imported were 700,000 to 800,000.  Why import, when we need local content? Now the country is faced with massive unemployment; we need to create more jobs for our growing population. Besides most feed raw materials are locally sourced, local content is cheaper, better and also helps the local economy. 

But before starting a feed mill, it is required you do environmental scanning and ensure you conform to the sector’s regulations as gazzetted by the Nigeria Institute of Animal Science.  The regulations include:

  • Using the published list of ingredients considered mandatory in the formulation and manufacture of feed in Nigeria.
  • Adhering and complying with the specifications for premise construction and setting up of equipment for processing and storing the feed.
  • Keeping records of raw materials received.
  • Locating feed mills in areas that are not exposed to smoke, dust and other contaminants. 
  • To have at least one registered animal scientist as a technical officer to supervise the operation of the mill
  • To have industrial mills (5-ton per hour capacity) located in industrial areas, away from polluted areas prone to flooding, pest infestation and 200 meters from livestock production in case of a farm mill.

Also mills should be located in areas where it would be easier to source and get raw materials. Unfettered access to raw materials is critical to the success of the feed mill business. Key raw materials for feed mills materials include soya beans, wheat, bone meal, crushed noodles, groundnut, palm kernel cake, spent grain, etc.  

One good thing about this business is that you can have a small plant as well as big plants depending on budget.  The machines can be imported as well as fabricated locally.  There are good local fabricators that can produce good machines. Normal and common required machines include hammer mill, wet mixer/miller, smooth grinder, livestock dry mixer, pellet mill, drier, etc. The size of the hammer mill and the capacity of the mixer determine the rating of the feed mill in metric tons per hour and this ranges from 250kg to 50 metric tons per hour. 

Despite the huge potential, there are some pre-, in- and post business challenges.  Funding is a major one.  If the business is properly appraised /valued, and as a result, return is good, one can get funded by government agencies (Bank of Industry, CBN, LSETF, etc.) and/or private equity, venture capital firms and even angel investors.

Some of the in-business challenges such as lack of consistency in feed quality and oversight function, etc., going by the NIAS regulations can be contained. In fact, the Federal government is doing a lot to ensure growth in the sector. The Federal Ministry of Agriculture in a press release – February 2, 2020 announced its intention to partner with Global Fortune Limited to build agricultural industrial parks (AIPs) across the Six-Geopolitical Zones of the country to help create jobs and boost food sufficiency in the agricultural value chain.  

So this is the right time for entrepreneurs and prospective investors to take advantage of this situation and prepare to invest in the feed sub-sector.

alltech

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