Bright prospects for Nigeria’s animal feed market

By Shem Oirere

Nigeria’s population is projected to hit 400 million people by 2050, from the current 190 million. This is likely to create huge demand for livestock and livestock products, opening up opportunity for growth of the country’s $12 billion animal feed market.

The potential for an expanded animal feed sector in Nigeria is huge, underpinned by the current high livestock numbers now estimated at 10 million birds, 22 million cattle, 40 million sheep and 50 million goats.

And, in the last few months, the Federal Government has been preparing ground for increasing the quantity and quality of animal feed production and distribution within Nigeria through several mechanisms, including providing clarity and certainty of the industry’s regulatory framework.


Animal feed

“Demand for livestock and livestock products will more than double by 2050 and to satisfy this expected huge demand for animal protein and other livestock products, livestock production and productivity has to increase commensurably in quality and quantity by about 60 percent,” says Chief Audu Ogbe, Nigeria’s Minister of Agriculture and Rural Development in a recent presentation.

In addition, the United States Department of Agriculture (USDA) estimates Nigeria’s poultry meat consumption will increase ten-fold by 2040, “assuming moderate feed costs, while domestic poultry production is expected to increase by 8 billion eggs and 100 million kilograms of poultry meat per annum.” The Department estimates Nigeria’s annual fish consumption to be two million tons, with over 20 percent supplied through land-based aquaculture production.

Currently, Nigeria is on the throes of streamlining the country’s feed industry after the December 2017 promulgation of new guidelines on the formulation, production, distribution of the products spearheaded by the Governing Council of the Nigeria Institute of Animal Science (NIAS) and the Ministry of Agriculture and Rural Development.

NIAS has gazetted the new feed industry regulations, which the Institute says will enable livestock producers to “achieve high levels of performance through use of consistent good quality feed.”

The rules, NIAS insisted, would support efforts to “protect health of consumers of animal products and safeguard health of animals and ensure quality animal feed distribution from feed-mill to farm level and that Nigeria markets animal feed products that meets national and international standards.”

NIAS has published a list of ingredients that it considers mandatory in the formulation and manufacture of feed in Nigeria and which all animal feed makers have to use if the country is to raise the bar of “Nigeria’s animal feed products to meet international benchmarks on animal feed safety.”

Some of the other requirements NIAS wants animal feed manufacturers and suppliers to adhere to include complying with specifications for premise construction and setting up of equipment for processing and storing the feeds, keeping records of raw materials received, registration of feed businesses and enlisting of animal scientists by the feed milling operators.

NIAS says these new regulations require animal feed operators “to have at least one registered animal scientist as a technical officer to supervise operations of the mill.”

To boost safety of the feed produced in Nigeria, NIAS insists the milling plants must be located “away from polluted areas prone to flooding, pest infestation, presence of waste and not less than 200m from livestock production area in case of a farm mill.”

Previously Nigeria had been listed alongside South Africa, Algeria, Tunisia, Kenya and Zambia as some of the fast-growing animal feed markets in Africa according to a survey by AllTech Global ranking.

Nigeria was ranked number 40 globally in the 2015 AllTech Global rankings and is one of the African feed markets that recorded more than 30 percent, at a time when the overall feed industry growth for Africa, with 2081 feed mills and total feed tonnage of 39.5 million metric tonnes, averaged 13 percent although the survey concludes the continent “presents the greatest growth opportunity for the feed industry.”

Streamlining of the Nigerian animal feed industry value and supply chain is expected to pay dividends for feed manufacturers and also the national economy, which grew at estimated 0.8 percent in 2017, up from –1.5 percent in 2016 and is likely to rise to 2.5 percent by the end of next year.

Feed producers such as Premier Feeds Mills, a subsidiary of Flour Mills of Nigeria PLC (FMN) and Olam, have lately reported growth in their production volumes and expansion of their business units within Nigeria, a result of a surge on demand for animal feeds in the West Africa country.

For example, Premier Feeds Mills, which gets its feedstock from the 10,000-hectare farm in Niger state’s Kaboji region, expanded its manufacturing operations in 2017 by opening an additional 10 tons/hour extrusion line to meet the high Nigerian and international animal feed market demand.

“Our company has continued to record giant strides across major market segments, even as we continue to consolidate our strategy to drive efficiency and grow our footprints in our agro-allied division,” says Peter Coumantaros, the FMN founder and chairman.

“We are halfway through a restructuring process for crop production with the focus on aligning the 2018 season to white maize, wheat and soy seed production,” he said.

In late 2017, commodities and agribusiness company Olam also commissioned a 720,000 ton/year feed milling facility in Nigeria specializing in the production of heat-treated mash and pelleted feeds. This is in addition to a new ultra-modern hatchery for generation of day-old chicks for both layer and broiler alongside a fish feed manufacturing plant.

The higher operational efficiency in large-scale and modern feed mills in Nigeria such as Premier Feed Mills and Olam is expected to reduce feed production cost and prices according to USDA.

This is in spite of the challenges of inadequate public power supply, infrastructure deficiencies, high cost of borrowing, high inflation rate, weak consumer demand, and a concern for security in some parts of the West African country that Coumantaros says are still a hurdle for Nigeria’s manufacturing sector.

USDA says Nigeria’s animal feed segment “remains underdeveloped mostly due to high production costs.”

“Most poultry, aquaculture and other livestock operations in Nigeria spend about 70 percent of their operational costs on feed, indicating its huge demand in the sector.,” USDA said a report released in April 2018.

“Over the last 5 years, Nigeria’s Animal Feed sector has continued to attract both local and foreign 

investors, and it is expected to remain the leading grain user in the country,” it said.