Invest in poultry feeds

Dr Okoth Ochola runs a poultry business in five districts of Uganda. The company has its own food processing section which produces the feeds for the farm. PHOTO BY STEPHEN OTAGE

What you need to know:

Supplying quality feeds to large scale poultry farmers can be a worthwhile investment, Dorothy Nakaweesi writes.

High quality formulated feeds can give you an edge in the poultry farming business.
Such feeds boost proper growth of the birds, egg production and good health. To obtain the desired growth rate, you should provide highly nutritious poultry feeds.
Poultry feeds have a wide market both in urban and rural areas of the country.
This article shows what it takes to start making poultry feeds, earn an income and change your living condition while creating jobs for others.

Capital investment
Starting this kind of investment requires an estimated fixed capital of $23,940 (Shs86 million).
According to a Uganda Investment Authority’s (UIA) survey, when you invest in this project, you can yield an estimated annual revenue of $78,000 (Shs280 million) from selling about 195,000kg of poultry feeds.

Maize flour another product from maize after the removal of maize bran will add you another 39,936 kilogrammes of maize bran. This will bring you a total of $17,971 (Shs64.6 million), from sales in the first year of production.
The payback period in this business is within two years with an estimated net profit margin at 31 per cent.
Production costs are assumed for 312 days per year with daily production of 625 kilogrammes and 128 kilogrammes of poultry feeds and maize flour respectively.

When it comes to depreciation UIA experts share that for fixed asset write off-one can assume 4-years life of assets written off at 25 per cent per year for all assets.
In this type of investment where total monthly days assumed are 26 days, the direct costs include: materials, supplies and other costs that directly go into producing the product.

Market analysis
Market for poultry feeds is growing by the day both in rural and urban centres as most people are embarking on poultry farming since it is a lucrative venture. Some of the large producers of poultry feeds in Uganda include: Kagodo Farmers, Ugachick
Uganda Ltd and Biyinzika Farmers among others. These may be producing at low costs by enjoying the advantages of economies of scale.

Mr Godfrey Ddamba, the quality controller at Ugachick Poultry Breeders, one of the producers of Poultry feeds in the country, says this business is lucrative because the market is readily available.
He, however, adds: “Constant analysis of incoming raw materials used in producing the feeds should be done to avoid contamination.”

Advice
Much as there is a huge market for poultry feeds, experts advise that before you invest in it, you should identify several raw material suppliers to keep in business when orders come.
Mr Daniel Joloba, the chief executive officer Big Finance, an advisory and consultancy firm for small and medium enterprises, says: “With this kind of investment, identify the different suppliers and buy the raw materials in bulk. This will help you keep in business even when big orders come.”
He further explains that although the raw materials are subject to market fluctuations in prices, you should not transfer the costs to your customers.

“Customers in this business are very price sensitive. Any price changes would make the customers to stop buying your products,” Mr Joloba says.
Secondly, any poultry feeds producing business should be consistence and regular supplies at all times.

Incentives
According to (UIA), government is encourages value addition in the agricultural sector through the agricultural fund and European Investment fund.

Risk certainty
The risk associated with this idea is healthy and safety related which can be addressed by employing food scientists.