The French company is to become the majority shareholder in that premix firm.
Hi Nutrients was founded in 2004 and specializes in the production of premixes, vitamins and minerals for poultry, dairy cows and aquaculture.
Feed millers and integrators in the West African country are the Nigerian firm's target customers, a spokesperson for Neovia told us.
Employing close to 100 people, Hi Nutrients has offices and a production plant close to Lagos; it holds close to a 50% share of the domestic poultry market and has good regional coverage through its network of six distribution centers and also exports product to Ghana, reported the French group.
The particular appeal of Nigeria for Neovia is its demographics: "Nigeria is a growing market and the rising population is dramatically increasing the demand for animal proteins."
Nigeria is one of the most dynamic African markets in terms of demographic and economic growth; it has long been predicted to become, by 2050, the world’s fourth most populous country. Its GDP is growing by 17%, according to the IMF.
Neovia says it has been doing business in Africa for over 20 years, directly in South Africa and Algeria, and indirectly through partnerships and exports in other markets. It said it wants to strength its position on that continent through strategic and targeted acquisition.
The company has several investment projects and partnerships currently under consideration in various markets in Africa, said Hubert de Roquefeuil, Neovia CEO.
Nigeria focus of international investments
There has been a lot of foreign interest of late in Nigeria’s poultry, aquaculture and feed sectors.
In April this year, Dutch feed group Nutreco bought out its local partner in fish farming joint venture, Skretting Nigeria.
For the past three years, Skretting had been in an alliance with the shareholders of local fish feed operation, Durante. It said it has seen a five-fold increase in its production since 2014, with output now at more than 20,000 tons.
“The joint venture has been growing well and there is a clear need for good quality feed and technical service in Nigeria. The full ownership underlines Skretting’s interest and is geared by the growth expected to come,” Rob Kiers, MD, Skretting Africa, told FeedNavigator then.
Skretting is also planning to construct a second feed plant in Ibadan, scheduled to be on stream at the end of next year.
In September last year, Olam International signaled its intent for Nigeria, opening a poultry feed mill, hatchery and poultry farm in Kaduna State and an integrated poultry and fish feed mill at Ilorin in Kwara State.
The agribusiness group said, in total, it had invested around US$150m in those animal feed and protein businesses.
With a combined capacity of 720,000 metric tons of poultry feed annually, Olam said its new facilities directly address a significant supply gap for poultry meat in Nigeria, giving farmers and distributors access to high-quality feed and day old chicks at competitive prices.
Sharad Gupta, senior vice president of Olam Grains and head of Olam Animal Feeds and Protein, told FeedNavigator then about the size of the opportunity that the West African country represents.
“If we want to change the trajectory of the poultry industry in Nigeria, we have to believe in its potential down the road, and we had to build two mills with optimum scale and size to cover the entire country.”
“Nigeria has a lot going for it. It has a large and growing population.
“Moreover, the consumption of eggs, poultry and fish is below average levels when comparing Nigeria to countries of a similar development and income level. Much of the reason for [that low consumption rate] is historical. For the past three decades, Nigeria had an oil dependent economy, largely reliant on food imports, with little domestic production. The resulting high level of income disparity led to a lower per capita consumption of many food categories."
Poultry consumption in Nigeria has also been constrained by the inconsistent supply of affordable, high quality feeds and healthy day-old-chicks (DOC) to farmers, he said.