‘We intend to grow at a much faster rate than the market,' Cargill sees scope for growth in African poultry and dairy sectors
“The poultry and dairy sectors are growing at a rate of 10% per annum in many countries in the region as the standard of living improves and the demand for meat, eggs, and milk with it.
But we intend to grow at a much faster rate than the market, and will do so by leveraging our additional production capacity, our feed formulation knowledge, our local networks and our products to produce meat more efficiently in the region,” said Gudo klein Gebbink, Cargill's regional director for the Provimi brand in sub-Saharan Africa.
The US agribusiness giant says it is focusing its commercial efforts mainly in South Africa, Zambia, Nigeria, Ghana and Kenya for now.
Cargill says the South African and Nigerian egg and poultry markets are particularly strong, while the dairy industry is showing relative dynamism in Kenya, Egypt, South Africa and Zimbabwe.
Egg production in Africa is said to have a lot of potential and is less at risk from cheap, foreign poultry imports.
Joint venture
In South Africa, Provimi operates as a joint venture with Astral Foods.
Cargill became a majority shareholder with a 75% stake in 2012 and Astral held onto the remaining 25% so the $12.5 investment in the new vitamin and mineral premix and base mix products facility in Pietermaritzburg was split that way, said Gebbink.
Construction of the plant, which was built alongside the former production site, got underway in August 2013.
“The premix facility is really cutting edge. It ensures optimum product safety through separate medicated feed and standard feed lines. Dosing capabilities, with high specification, mean we can control the quality of ingredients in both large volumes or when weighing out one ton of feed, allowing us to address the needs of the feed mill or home mixing market,” said the Provimi representative.
The old plant has been decommissioned and will be used as an additional warehousing unit.
Asked what Cargill's expectations were on milk yield increases for the dairy segment in the various markets it is focusing on, Gebbink told us it was not really about trying to pigeonhole productivity gains at this point.
“There are so many factors to consider from genetics to environment to ingredients. We see that we have a critical role to play, via on farm management or nutritional guidance, in developing the dairy sector in sub-Sahara Africa and we will tend to focus on where we think the biggest potential is and where we can make the most impact,” he added.
He said political stability or otherwise of each market in the region is something Cargill also takes into account when looking at where growth prospects lie. “It is a question of balancing opportunity and volatility in any given market,” said Gebbink.
