Olam International Announces Expansion into Animal Feed in Nigeria
Olam International Ltd. announced on November 27 that it plans to expand its Grains platform into animal feed and parallel businesses in Nigeria, according to World Grain. Under the group’s plan to invest in platforms that it has earmarked as a priority, including the Grains platform, Olam will make investments to fund the building of fish feed and poultry feed mills, in addition to hatcheries that will produce day-old chicks.
Olam notes that the global animal feed industry is a key segment of total agricultural production, which provides healthy returns with a forecasted high rate of growth, especially in emerging markets. Olam chose Nigeria as its point of entry based on a combination of criteria, including meat consumption per capita, supply and demand factors, the extent of vertical integration and fragmentation seen in the country’s animal feed sector, the extent of commercial feed penetration, and the nascent potential existing for scalability in the industry.
Nigeria’s rate of urbanization and increase in wealth, which is driving a higher consumer demand for poultry and seafood, is supporting a compounded annual growth rate in the country’s commercial feed market that is expected to top 10% over the next five years, according to the group.
Olam will leverage its existing wheat milling business in Nigeria to source bran for its animal feed facilities, as well as leverage its local networks to source other necessary inputs for the production of feed.