Olam International Makes $150M Investment in Integrated Feed, Poultry Complex in Nigeria
Olam International announced it is investing $150 million to construct two state-of-the-art feed mills, two poultry breeding farms, and a hatchery for the production of day old chicks in the Kaduna and Kwara States of Nigeria.
The decision is being driven in part by the desire to strengthen its position in Nigeria’s wheat milling sector by creating downstream demand for its upstream origination business, after Olam acquired Amber Foods Ltd. earlier this year in a $275 million deal that brings with it the Nigerian wheat milling and pasta manufacturing operations of BUA Group, one of the country’s top five millers with the capacity to process 3,760 tons of wheat per day.
“This new venture into animal feed is a win-win for Olam and Nigeria,” said Mr. Venkataramani Srivathsan, Olam’s CEO for Africa in a company statement. “Domestically produced meat is being hampered by a lack of good quality feed, support for farmers and availability of young stock, but consumption is set to increase. By investing in poultry and fish feed, we can utilise [sic] the wheat bran from our wheat milling operations, as well as maximise [sic] our sourcing networks to buy corn and soy from local farmers.”
Once completed, the project will be the largest integrated animal feed and poultry operation in sub-Saharan Africa, according to the Nigerian publication, Today. Operating at full capacity, the combined feed mills will produce more than 600,000 tons of poultry and fish feed per year, while the breeding farm in Kaduna will supply over one million hatching eggs per week for the hatchery.
The project also calls for the inclusion of over 100,000 tons of in-house storage, and will source the bulk of its corn and soybean needs from local producers, creating a market that will support the growth of not only Nigeria’s poultry and fish sectors by providing high quality, competitively priced feed and chicks, but will create a stable outlet for its commodity producers as well.