Equity: A taste for chicken
As Africans spend more on chickens and eggs, the poultry sector is attracting more private equity investors.
wholesale prices of imported chicken pieces are so low in Accra or Monrovia that they would cover only half their production costs back in Europe
8 Miles, an investment group that includes former star Bob Geldof, bought a stake in Uganda’s market leader in the production of day-old chicks, Biyinzika Poultry International, in June.
Injaro, a fund that focuses on West African agribusiness, invested in the Ivorian poultry inputs distributor Proveto in May 2013 before closing its $49m West African agribusiness fund.
Acumen, a ‘patient capital’ impact investment charity, injected money into Mekelle Farms, Ethiopia’s own market leader in chicks, in March.
The company says new chicken breeds and increased egg production will help to meet the country’s food needs.
The Meat Atlas, published by the Heinrich Böll Foundation, points to some major market trends.
In South Africa, there was an average consumption of 37.8kg of chicken per person in 2012; that figure could rise to nearly 50kg per person by 2020.
Other trends are less encouraging for the bean counters.
European dumping of frozen chicken wings has devastated local producers.
“The wholesale prices of imported chicken pieces are so low in Accra or Monrovia that they would cover only half their production costs back in Europe,” says the report.
That has not discouraged all local investors.
The $10m Southern Chickens Processing Plant in Siavonga, Zambia started operations in June with a capacity of 2,000 chickens per hour. ●