Poultry Farmers Will Meet Local Demands In Two Years If… Oduntan | Independent Newspapers Limited
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Poultry Farmers Will Meet Local Demands In Two Years If… Oduntan

Group Managing Director natnudO 6
Posted: Jun 16, 2016 at 3:17 pm   /   by   /   comments (0)

Dr. Ayoola Oduntan is the Group Managing Director of NatnudO Farms. He is also the National President of Poultry Association of Nigeria (PAN). In this chat with selected newsmen during a tour of the farms in Awe, Oyo State, he spoke on the need for banks to support the industry to be able to meet local demands in terms of poultry products among other issues. SEYI TAIWO-OGUNTUASE was part of the team. Excerpts:


What is your production capacity now and in the next one year?  What production capacity should Nigerians expect from your farm in terms of frozen chicken and feed mills to tackle importation?

Poultry is capital intensive, and it is a long term business and we have been growing the business, the whole industry is estimated to be worth over N600billion.

With regards to chicken, as a country we have a total consumption of a million and half and only about 30 per cent of that, only about 300 tonnes is produced locally; the rest we believed is smuggled into this country. Whether we have room for improvement? Yes, we  do there is no reason why we should not be producing 100 per cent of that, but let me give you an idea of the figures involved in one million tonnes of chicken as an example.

One tonne is 1000 killogramme, so one million tonnes is one billon killogramme, each kilogramme of chicken right now is sold at between N700, so in effect we are talking about the value of one billion chicken been about N700 billion, for Nigerians. It is probably closer to 1trillion than 700billion that is just for the frozen chicken. We have not talked about eggs.

What distinguishes the poultry industry amidst other industries is to produce one million tonnes of chicken you will need to feed two million tonnes of birds, to feed two million tonnes of birds, it will require about one million tonnes of maize, that  is for the broilers, the layers will consume more.

Our total consumption of maize as a country is about three million tones. The total production of maize in Nigeria is about nine million tonnes, so we consume between 20 and 30 percent of the total maize produced in this country as an industry.

In Nigeria, the statistician will tell you that an average farming family for maize produces two tonnes per hectares and they farm two hectares, so what are we saying? A family producing maize produces four tonnes of maize, so if a family is producing four tonnes of maize and we are consuming two to three million tones, how many families do we need to produce maize? We need about a million families to produce maize that is used by the poultry industry.

Now that one million families, somebody will load that maize into a truck, a driver and a motor boy, move that maize to the market someone else will offload that maize, another person will trade in the maize in the market, another person will transport it to the feed mills.  Other people will work in that mill to mill that into feed, somebody will load that feeds and offload that feed in the farm.

So, imagine the number of people; these are maize, we have not spoken about soya, we have not spoken about limestone, we have not spoken about palm kernel, wheat, rice mill. So, look at the number of value chains that the poultry industry affects in this country, look at the number of people directly and indirectly  employed, so one million tonnes of maize you will need 33,000 trailers, plus motor boy, driver and people that will load and offload.


If you look at the share number of people that this industry can employ you will ask yourself, with the share magnitude of this industry which we are only doing 20 per cent, why are we starved of foreign exchange now?

90 per cent of our total requirements as an industry is produced and source locally, we only need 10 per cent from overseas and we are not getting it, so the industry is down. These are some of the questions and issues we as Nigerians ask ourselves that, what we can do because the value chains that are dependent on this industry are so many.


What volume should be expected from you in term of meeting the demands of Nigerians?

From our company we are targeting 10 per cent of the total production over the next five years.


Sometimes you wished Nigerians that are interested in this business to be self sufficient, how do you intend to do that?

One of the initiatives we have launched is called the natnoprenuer scheme. The scheme we put together is to ensure that we empower a wider range of entrepreneurs farmers, where you provide them with inputs, we provide them business training and off take the products.  We have already run a pilot project which is empowering 250 farmers and we are about expanding it to 1,500 farmers nationwide.

The other part on the seller end after production is we are trying to empower young new entrepreneur to sell poultry products. They will need basic investment of N500,000,  they will have freezer, stock and they will get a shop they will be able to pay themselves a salary of N15,000 to N20,000 a month and they will be able to maintain the business and there is a good margin on all these products that is on the seller side.

You also see around the country hundreds of thousands of abandoned farms, so when people say we cannot meet the capacity I tell them no, most of the farms in this country are either working below capacity or have closed down. We need to revive those farms and that is what we are trying to do now.

There are three kinds of contract farming; one is we will just buy your products, second is which we supply some of your inputs and buy your products and thirdly, we give you all our inputs and we buy your products. Right now to be able to do number two and number three well we need the financial sector to actually be prepared to take some risks.

Right now, we have not been able to put together any bank in Nigeria to be able to provide what is like an Anchor Borrowers Scheme, the central bank and NASA are working on that.

We have a few banks that are talking, but nothing has happened, the idea will be that all these abandoned farms should come back into production. Imagine the number of people that it would employ.

On the other side, we have the  sellers, in which case you have a younger brother or sister who is unemployed he or she is living in an area where they consume chicken, he buys one or two freezers, joins the programme, we train them on how to sell, we give them promotional materials to sell, these are hardworking determined young man or lady and he starts to sell chicken in his neighbourhood, before you know what is happening he is covering the whole local government because we have a few like that who have actually started and develop in the business and we are continuing in that programme. That gives you an idea of what we are saying about the scheme.


With the current infestation on maize, what is the situation with supply and has it affected your farm in any way?

The new harvest for maize is not yet out fully. We are expecting it to have a huge impact, the size of the impact we do not know yet. The ministry of agriculture says they are working to contain it. I pray they do, because maize is a major problem this year, the price of maize has increased from about N50,000 to N55,000 at the beginning of the season to about N110,000 per ton. But the price of egg and chicken have remain relatively flat, what it means is that farmers are actually not making  money at this time, but we have  been in the business long enough to know that our industry is cyclical, by the grace of God in another few months, when the new harvest comes out; if these issues does not go out of hand the price of maize will come down.


That takes us back to the funding about financial institutions not assisting the poultry business; what about financial institutions like Bank of Industry (BOI) and Bank of Agriculture (BOA)? Is Poultry Association of Nigeria collaborating or trying to assess funding from these institutions?

Yes, Bank of Industry will tell you that they do not fund primary agriculture because it is not within their mandate.

Bank of Agriculture is currently undergoing some restructuring, they have not been as active in poultry as we will like. We are hoping that when the reorganisation is completed, there will be some improvement.

In some discussion with NASA on Anchors Borrowers Scheme which is between NASA and the central bank; if that takes off with some of the commercial banks, we will be able to trigger this anchor borrowers scheme for poultry, but the success and the long term growth of the poultry industry depends on the banks, along with NASA, along with the central bank being able to come together to fund these farmers.

If that combination works, what will happen is that a company like us will be an anchor; NASA will provide guarantee of the products, CBN will provide the funds, we will supply the products to the farmers, the farmers will grow the birds, matured them and sell the finish product to us.

We will process and sell through the value chain; the farmer is prosperous, the bank will get its interest back, and we will get our chicken and satisfy the national demand. This is not reinventing the wheel this is the model that is current working everywhere in the world where you find successful poultry.


But the anchors borrowers’ scheme has started?

It has started with rice, it has not started with poultry and we are hoping that it will, for other commodities.


What is the funding gap for the poultry industry and how much money does the poultry industry need?

For the industry for chicken for instance; we will be talking in the range of a turnover of N600billion.  If we divide that into six cycle in a year, because for broiler we will have like five to six cycles in a year, so we believe that if N100trillion is pumped into this industry to yield a global turnover of over a trillion I think that will be okay.


As a stakeholder, will you support an outright ban of poultry products now since Nigeria is not self sufficient yet?

There has been a ban of poultry product since 2009.  So, it is not a new development and that is not the ban that we are asking for. Importation of poultry products has been banned since 2009. With regards to when Nigeria will be self sufficient, can Nigerians be patient with us for two years, if we are giving the necessary support of funding, raw materials, this industry would be able to provide Nigeria’s poultry need in a two year period.


In the absence of support, how long will it take?

It is like saying that if Nigeria is not able to export oil, what is going to happen. That is one way or the other the economy has to advance, the banks has to support, the private sector has to do things like what we are doing which is providing technical support to the industry.

If there is absolutely no support, the whole country is going to be in a mess. If there is actually no support, maybe two year will become four years. We farmers have managed to stay alive through hard work and commitment, through sorrow, tears and blood, we will continue to make that efforts and look forward.


How prepared is natnudO farms to meet the demands?

We are working very hard to increase capacity across the country; we are replicating our natnuprenueral scheme in the different parts of the country over the next three months.

We are going very strongly out into the market to develop supplies, to be able to meet the demands.  So, we are working very hard, twice as hard as we are working before to be able to bridge that gap. One of the initiatives is the natnuprenuer scheme that we have started.

In which case, we are trying to galvanise abandoned farms to come back to production, we are trying to encourage farmers who are under-utilising their potential to further improve their capacity. We are trying to encourage farmers who are fully utilising their capacity to expand thereby increasing the quantum of chicken that is available to be able to bridge that gap.