The reasons why Astral Foods decided to boost its investment in ZambiaFollow @MadeItInAfrica
Astral Foods, a South African integrated poultry producer, has been operating a poultry feed business in Zambia for many years. In June 2010, the company, through its Tiger Animal Feeds Zambia subsidiary, opened TIGERChicks, a new state-of-the-art broiler breeding farm and hatchery in Zambia. Jaco Maritz sat down with Roedolf Steenkamp, managing director of Astral’s Feed Division, to talk about Zambia’s poultry industry.
Give us a brief overview of Astral’s poultry business in Zambia
The feed business is basically focused on producing mainly poultry feed for broilers. We’ve had the mill for some time and our focus has been on growing and improving the business. This year, we established a new broiler breeding farm and hatchery that delivers quality day-old chickens to the local broiler farmers. We are not yet at full capacity with our chicks, but we are running according to plan.Currently, we have approximately 76 outlets in Zambia through which we sell both our feed and chicks.
We have also expanded our feed business and currently have a fish feed plant attached to our mill. Fish feed is another source of animal protein for which there is currently a growing demand in Africa.
Why is Zambia a good location to run a poultry business?
Commercial farming is relatively strong in Zambia and they’ve got good maize, soya bean and wheat farmers. In order to farm chickens you need a good raw material supply. If you haven’t got maize and soya you can’t produce chicken feed. Zambia is currently self-sufficient in maize, soya and wheat and these raw materials are readily available, which is not the case elsewhere in Africa, apart from South Africa. Zambia also has plenty of water, fantastic soil, very high rainfall and good crop growing conditions. In addition, it is possible to fly from Lusaka to all Zambia’s eight neighboring countries, allowing easy access to all these markets.
For us, another advantage of Zambia is that the population speaks English – it is not like the Democratic Republic of Congo (DRC), where the official language is French, or Angola, where people speak Portuguese. It is very difficult to trade in a country where you can’t speak the language.
Unlike in South Africa, Astral’s Zambian operations do not currently have an abattoir and the chickens are not slaughtered and sold in portions. Why is this?
Let me give you some background to the market. In South Africa, we have got a very sophisticated retail network with outlets such as Shoprite, Pick n Pay and Spar. The buying profile of the consumer in South Africa is of such a nature that you can go to a grocery store and buy anything you want. In the rest of Africa, the situation is very different, although you do find supermarket chains such as Shoprite and Pick n Pay opening up outlets. In South Africa, the per capita broiler consumption is 31.8 kg per person per annum, while in Zambia, it is not even 3 kg per person per annum.
Commercial farmers in Zambia that do slaughter or add value, will normally just slaughter the chicken and put the slaughtered bird in a fridge – they won’t sell it in portions, but will mostly sell it as a whole frozen bird.
If you look at the profile of your farmers in Africa, nearly 60% are small-scale farmers. They will buy 100 to 200 chickens per week and will sell them live to people living in their local communities. It should be remembered that, in rural areas, refrigeration is often not available. People will also buy a live bird and slaughter it whenever they want to. The whole chicken is then normally consumed. The size of the market in Zambia does not at this stage justify another abattoir, but I believe that this will come in time.
How do you see the future of Africa’s poultry industry?
Poultry is one of the most sustainable sources of animal protein. Anybody in Central Africa can plant maize or soya beans – you just put a seed in the ground and it merely grows by itself because of the humidity, high rainfall and good soil. If you’ve got maize and soya you can feed your chickens. You can farm chickens in a garage, like many of the small-scale operators do. A chicken is also much cheaper and easier to buy than a goat or a cow. For this reason, I see great potential for growth in Africa’s poultry industry.
What’s next for Astral’s operations on the continent outside of South Africa?
As our CEO recently stated, we will optimise our opportunities in Africa. What one needs to keep in mind is that it is not as simple as saying, “Here is a big continent, let’s go and do this or that.” We have got extensive experience on how to enter these markets and we will do so in a very responsible way. There are opportunities in the West Coast of Africa as well as in the East Coast region, but again, there are huge challenges. It is a very big investment to establish a feed mill and breeding facility, wherever this commitment is made.