Broiler industry has huge potential to grow
Namibians consume 25 million chickens per year
Pieter van Niekerk, Commercial Manager: Namib Poultry Industries - The broiler industry refers to chickens produced for the purpose of chicken meat. The global consumption of broiler chicken meat is estimated at 116 billion kilograms per annum (converted to roughly 70 billion chickens), with a population of 7.6 billion, the world consumes 15kg per capita.
Over the past decade, chicken meat has surpassed pig and beef in consumption, making it a very important protein source globally. There are two main reasons: chicken meat is much cheaper than other protein - firstly is the fact that chickens, due to its small size, can be grown in a smaller area and managed more effectively; secondly the Feed Conversion Ratio (meaning the amount of feed required for 1 kilogram of meat) is extremely efficient.
Cattle ranges between 6 – 8 kilogram of feed required for 1 kilogram of meat, while chicken meat only requires 1.6 kilograms of feed for 1 kilogram of meat produced.
GRAPH 1
CONSUMPTION
Namibia’s broiler industry has had a rollercoaster start. Since its official inception in 2012 and appointment of 600 permanent employees, the Namibian formal broiler industry has not grown much over the last 6 years, although demand has increased.
The total annual consumption of chicken in 2016 was 40 827 tonnes. This means that Namibia consumes roughly 25 million chickens per annum (ten times the population of Namibia).
GRAPH 3
For Namibia to grow this sector, local production by larger companies as well as local SME’s needs to be stimulated.
Local production costs are much higher and new investments in an industry are always at a disadvantage compared to industries that have been vested for longer periods.
The main reasons for the high price difference between South Africa and Namibia are:
• Namibia does not use poultry by-products in the feed (blood and feathers rendered into a protein meal), this practice is standard in most other countries and decreases feed costs;
• Namibia does not use broad-spectrum antibiotics;
• Higher water and electricity costs;
• Greenfields project: The Namibian poultry meat industry is only 6 years old, compared to the South African industry which has been active for more than 40 years, thus capital and interest have been repaid on the capital many times over;
• Economies of scale: Namibia slaughters 250 000 birds per week, while RSA slaughters +-20 million birds per week. Costs of personnel, maintenance, food safety, etc. are recouped much quicker by a South African producer, while local producers have far fewer numbers to achieve critical volumes;
• Transport on input costs: Raw materials, spare parts, medication and parent stock increases local production costs;
• Distribution in Namibia is also a large cost contributor, as Namibia is a vast country with only 4% of the South African population, making distribution very expensive.
South Africa cannot compete on price against Brazilian imports, likewise can Namibia not compete against South African imports.
IMPORTS
Most of Namibia’s imports are either from South African origin or imported via South Africa into Namibia.
The Avian Influenza outbreak in South Africa and other countries has decreased the imports, but as Namibia has not invested sufficiently in order to substitute all imports. For Namibia to be self-sufficient, further investment will be required to expand the current capacity.
The current strain of Avian Influenza is H5N8, which does not affect humans, but has a 100% mortality effect on bird species. Namibia, due to bird migration patterns and bio-security safety measures, has yet to test positive for this disease.
Namibia’s import restriction has been challenged in court by the South African industry, which has also applied to protect their own borders from Brazilian, European and North American broiler producers. Most countries understand the importance of this industry within their borders and also have import control measures. Just looking in our region, Zambia, Zimbabwe and Botswana have import restrictions.
It is difficult to try and create a sustainable industry, where importers are looking for opportunities to benefit from measures that should have been aimed at improving local industries and growing the local production. The effect is more importers instead of more producers.
Currently, there is only one large chicken producer, this is not sustainable as any problem in production, would negatively affect the whole Namibian market.
SMEs are also very important in this market, as it increases small-scale production while creating wealth for entrepreneurs and expands the industry nationally. Large organisations can then, in turn, assist the SMEs with inputs such as chicks, medication and feed.
GRAPH 2
INFORMAL PRODUCTION (SMEs)
Feedmaster is one company who is actively serving the informal broiler production industry. Feed master believes that this segment has enormous growth potential which would benefit various agricultural institutions and farmers in Namibia. It also aids as a diversification to cattle and small stock farming as it doesn’t need large areas of land. For example, a 25 000 bird production unit can be erected on 2 ha or smaller. It is an infant industry to be developed with untapped potential.
Day old chickens can be ordered from Namib Poultry Industries, the feed is supplied by Feedmaster to 50 Retail Outlets throughout Namibia. Feedmaster has a complete poultry feed range available for these small and medium enterprises.
Protection for the Poultry Industry in Namibia has had a positive contribution to SME development and Namibia has seen a rise of multiple SMEs in the poultry sector. With the present assistance of limiting import quantities, many small-scale poultry farmers are realising the potential of poultry farming in Namibia.
Most evident problems are the availability of training/information days, equipment and medication/vaccinations.
IN CONCLUSION
Namibia has a high growth potential for small, medium and large enterprises to create wealth, replace imports and promote sustainable employment by strategically controlling the industry, thus protecting the broiler industry against international dumped products.
All SACU countries (South Africa, Botswana, Namibia, Swaziland and Lesotho) should work together to counter imports into all of our markets, rather than challenging one another.
Over the past decade, chicken meat has surpassed pig and beef in consumption, making it a very important protein source globally. There are two main reasons: chicken meat is much cheaper than other protein - firstly is the fact that chickens, due to its small size, can be grown in a smaller area and managed more effectively; secondly the Feed Conversion Ratio (meaning the amount of feed required for 1 kilogram of meat) is extremely efficient.
Cattle ranges between 6 – 8 kilogram of feed required for 1 kilogram of meat, while chicken meat only requires 1.6 kilograms of feed for 1 kilogram of meat produced.
GRAPH 1
CONSUMPTION
Namibia’s broiler industry has had a rollercoaster start. Since its official inception in 2012 and appointment of 600 permanent employees, the Namibian formal broiler industry has not grown much over the last 6 years, although demand has increased.
The total annual consumption of chicken in 2016 was 40 827 tonnes. This means that Namibia consumes roughly 25 million chickens per annum (ten times the population of Namibia).
GRAPH 3
For Namibia to grow this sector, local production by larger companies as well as local SME’s needs to be stimulated.
Local production costs are much higher and new investments in an industry are always at a disadvantage compared to industries that have been vested for longer periods.
The main reasons for the high price difference between South Africa and Namibia are:
• Namibia does not use poultry by-products in the feed (blood and feathers rendered into a protein meal), this practice is standard in most other countries and decreases feed costs;
• Namibia does not use broad-spectrum antibiotics;
• Higher water and electricity costs;
• Greenfields project: The Namibian poultry meat industry is only 6 years old, compared to the South African industry which has been active for more than 40 years, thus capital and interest have been repaid on the capital many times over;
• Economies of scale: Namibia slaughters 250 000 birds per week, while RSA slaughters +-20 million birds per week. Costs of personnel, maintenance, food safety, etc. are recouped much quicker by a South African producer, while local producers have far fewer numbers to achieve critical volumes;
• Transport on input costs: Raw materials, spare parts, medication and parent stock increases local production costs;
• Distribution in Namibia is also a large cost contributor, as Namibia is a vast country with only 4% of the South African population, making distribution very expensive.
South Africa cannot compete on price against Brazilian imports, likewise can Namibia not compete against South African imports.
IMPORTS
Most of Namibia’s imports are either from South African origin or imported via South Africa into Namibia.
The Avian Influenza outbreak in South Africa and other countries has decreased the imports, but as Namibia has not invested sufficiently in order to substitute all imports. For Namibia to be self-sufficient, further investment will be required to expand the current capacity.
The current strain of Avian Influenza is H5N8, which does not affect humans, but has a 100% mortality effect on bird species. Namibia, due to bird migration patterns and bio-security safety measures, has yet to test positive for this disease.
Namibia’s import restriction has been challenged in court by the South African industry, which has also applied to protect their own borders from Brazilian, European and North American broiler producers. Most countries understand the importance of this industry within their borders and also have import control measures. Just looking in our region, Zambia, Zimbabwe and Botswana have import restrictions.
It is difficult to try and create a sustainable industry, where importers are looking for opportunities to benefit from measures that should have been aimed at improving local industries and growing the local production. The effect is more importers instead of more producers.
Currently, there is only one large chicken producer, this is not sustainable as any problem in production, would negatively affect the whole Namibian market.
SMEs are also very important in this market, as it increases small-scale production while creating wealth for entrepreneurs and expands the industry nationally. Large organisations can then, in turn, assist the SMEs with inputs such as chicks, medication and feed.
GRAPH 2
INFORMAL PRODUCTION (SMEs)
Feedmaster is one company who is actively serving the informal broiler production industry. Feed master believes that this segment has enormous growth potential which would benefit various agricultural institutions and farmers in Namibia. It also aids as a diversification to cattle and small stock farming as it doesn’t need large areas of land. For example, a 25 000 bird production unit can be erected on 2 ha or smaller. It is an infant industry to be developed with untapped potential.
Day old chickens can be ordered from Namib Poultry Industries, the feed is supplied by Feedmaster to 50 Retail Outlets throughout Namibia. Feedmaster has a complete poultry feed range available for these small and medium enterprises.
Protection for the Poultry Industry in Namibia has had a positive contribution to SME development and Namibia has seen a rise of multiple SMEs in the poultry sector. With the present assistance of limiting import quantities, many small-scale poultry farmers are realising the potential of poultry farming in Namibia.
Most evident problems are the availability of training/information days, equipment and medication/vaccinations.
IN CONCLUSION
Namibia has a high growth potential for small, medium and large enterprises to create wealth, replace imports and promote sustainable employment by strategically controlling the industry, thus protecting the broiler industry against international dumped products.
All SACU countries (South Africa, Botswana, Namibia, Swaziland and Lesotho) should work together to counter imports into all of our markets, rather than challenging one another.
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