Research reveals huge business opportunities in the animal feed industry in Kenya
Mr. Sylvester Kamau is a proud owner of a fast growing animal feed milling business based in Thika.
Looking at Kamau’s business one may be misled to think that he had millions of shillings as capital for his vast business.
That is far from it. Kamau is a typical example of the anecdotal thousand miles’ journey that starts with a step’.
Mr. Kamau started as a raw material supplier to animal feed millers in Thika and its environs before eventually acquiring, bit by bit, his own milling machine.
A main supplier and manufacturer now, Mr. Kamau actually started by connecting ingredient sources to customers (manufacturers, distributors and even retailers) through the distribution and transport systems.
Mr. Kamau’s success story illustrates the unexploited potential in the animal feed industry which according to a recent study commissioned by Kenya Markets Trust, has seen continued entry of small scale actors, with several farmers’ cooperatives taking up the business as a core function at large scale.
Small scale investments by some posho millers have moved on from supplying the maize bran by-product to manufacturing animal feeds for resale.
“Most feed producers and raw material suppliers are concentred in and around Nairobi city, its environs and the central regions of the country, possibly following commercial dairy and poultry populations as well as the availability of industrial infrastructure, roads, water and electric power,” reveals the study.
The industry produces about 750,000 tonnes of animal feed per year, which is about 70% of the installed potential capacity.
The numbers describe a rapidly growing and changing feed production industry, courtesy of increased demand for raw materials and by products.
Opportunity to grow
Although the industry’s growth is dynamic most operators are still small scale and based in major urban centres especially Nairobi environs and Thika. These are high potential and intensive livestock farming regions of the country.
This means there is chance to grow the business in other urban centres across the country where the products are in demand.
Authenticating the study, Chris Shimba, Policy and Research Manager at Kenya Markets Trust, said the rapid growth has been supported by easily acquired feed manufacturing infrastructure using imported and locally fabricated machinery.
Mr. Shimba said almost all the manufacturers have invested in appropriate feed formulation and quality assurance as a result of competition and need to conform to market standards.
Rising demand for animal feed ingredients
“The country is not self-sufficient in the provision of the feed ingredients…the raw materials are mostly imported from Tanzania and Uganda. In addition, there is increased on-farm formulation and feed mixing at community levels, increasing demand for the feed ingredients,” Mr. Shimba said.
Although the most prominent products are for dairy and poultry feeding, business competition has motivated the development of unique products and brands like Kienyeji mash for indigenous chicken and fish pellets for fish farming.
The study reveals cases of poor quality products in the industry due to inadequate regulation and supervision capacity.
Many of the small scale producers are not able to invest in high level analysis and quality assurance systems, compared to the big operators who continue to dominate the market.
Due to the geographical distribution of manufactures and users, the feed quality is further compromised by long supply chains, inadequate transport and storage practices.
The study recommends enhancing regulation capacity by outsourcing the services to accredited providers.
Cost of doing business
The feed prices are based on costs of establishment of production infrastructure, procuring raw materials and the long supply chains where the products are supplied through networks of transporters, distributors, wholesalers and retailers.
Most manufacturers and ingredient suppliers have consumer interaction systems mostly to promote their products. However, these systems have not fully been effective in ensuring original product qualities are upheld along the supply chain.
To improve the business environment for potential investors, the study recommends easing business registration process, expand access to credit, other support services and improve access to suppliers and buyers.
For retailers there should consider interventions to reduce long term overhead costs and the variable costs of electricity and transport like pooling warehousing space with fellow operators.
The study also calls for need to review ways of how best to obtain feed operators information (population, location, capacity), either by national and compulsory census or derivation of such information during registration and renewal of licences with KEBS and AKEFEMA.
This should be accompanied by an information system that easily and quickly provides such information (a dynamic and regularly updated map) for use by all supply chain agents from suppliers to consumers. This can also be used to identify investment opportunities when such maps reveal exploitable gaps.
Knowledge and skills transfer
The study calls for supported production of local milling and mixing machinery through knowledge and skills transfer to improve efficiency and effectiveness.
Besides, the industry should support research and production of local raw materials that can be used to provide same nutrient value as the imported ones.
“Operators should explore ways of procuring and delivering raw materials at lower costs. This includes sourcing by groups of farmers and retailers to achieve the economies of scale,” recommends the study.
“There is also need for intensive education and information sharing on proper storage, stock management transporting and handling of feed stuff. This includes effective pest management,” adds the study.
It should also be mandatory for suppliers to provide quality assurance of ingredients before sales. Organized operators can arrange for collective procurement of the quality assurance services for strategic sharing and reduction of associated costs.
This includes sourcing by groups of small scale manufacturers, distributors, retailers, and farmers to share the expenses or the devolved governments to invest in the local provision of such facilities for their communities.
According to the study there is urgent need to complete and pass the animal Feedstuff Bill (2016) and enforce standardization through registration of all feed operators with Kenya Bureau of Standards.
Hits: 460https://farmerstrend.co.ke/research-reveals-huge-business-opportunities-in-the-animal-feed-industry-in-kenya/https://i2.wp.com/farmerstrend.co.ke/wp-content/uploads/2018/03/Cattle-Farmer-in-Kenya.jpg?fit=600%2C400&ssl=1https://i2.wp.com/farmerstrend.co.ke/wp-content/uploads/2018/03/Cattle-Farmer-in-Kenya.jpg?resize=150%2C150&ssl=1#Trendingbest feed mixture for dairy cows,dairy animal feeds kenya,dairy cow feed consumption per day,dairy cow feed recipe,Dairy Cow Feeding,Dairy Feeds and Feeding,Feeding dairy cattle,feeding dairy cows for maximum milk production in kenya,feeding dairy cows manual,Feeds your cow requires for best production,how much to feed dairy cows,How to feed a dairy cow for more milk,how to increase milk production in dairy cows in kenya,how to make dairy meal in kenyaMr. Sylvester Kamau is a proud owner of a fast growing animal feed milling business based in Thika. Looking at Kamau’s business one may be misled to think that he had millions of shillings as capital for his vast business. That is far from it. Kamau is a typical example of...#FarmersTrendJohn Bujufarmerstrend@gmail.comAdministratorI am a web enthusiast, writer and blogger. I always strive to be passionate about my work. I started my work at the beginning of 2013 by engaging myself with detail reading and exchanging information regarding farming with others. Since then things and times have changed, but one thing remains the same and that is my passion for helping and educating Kenyan farmers, building a successful blog and delivering quality content to the readers. The particular interests that brought me in the world of blogging are gardening, farming and livestock.Farmers#Trend