Japan’s Mitsui boosts presence in Africa with Egyptian poultry investment

Mitsui & Co., a Japanese general trading company, has announced an investment in Egyptian poultry firm Wadi, marking a further step in the group's expanding footprint in Africa. This investment is geared towards bolstering Wadi's local operations in Egypt and enhancing its export capabilities.

Wadi engages in a range of activities, including the production and processing of broilers (chickens raised specifically for meat), food manufacturing, sales, distribution, and procuring feed grain. The company also produces parent stock, the breeding chickens for broilers. 

In a statement announcing the investment, Mitsui emphasised that chicken meat is the most feed-efficient among animal proteins. Due to its affordability and minimal religious dietary restrictions, the company expects a surge in chicken demand in emerging economies, in line with population and economic growth.

Mitsui, along with its subsidiaries including Prifoods, has developed an integrated poultry production business that encompasses everything from feed grain sourcing to broiler breeding, processing, meat packing, as well as the distribution of food products. Recently, these operations have begun extending beyond Asia into North and West Africa. Notably, in 2018, Mitsui invested in Zalar Holding, the largest broiler business in Morocco and Senegal. Leveraging Prifoods' expertise and knowledge, Mitsui has enhanced Zalar's operations, resulting in notable productivity gains. That same year, Mitsui also made an investment in Africa-focused agriculture ETC Group, which specialises in agricultural inputs, logistics, merchandising, food processing and supply chain optimisation. 

With its population of over 100m, Egypt represents a sizable market for poultry. However, the industry has faced challenges recently. Enterprises reliant on imported feed were hit hard by a shortage of foreign currency and repeated devaluations of the Egyptian pound. Feed costs can make up as much as 70% of a chicken's price, underscoring the benefits of integrated operations that produce their own feed. Despite government efforts to control inflation by importing lower-priced chickens from Brazil, escalating poultry prices have put a strain on Egyptian household budgets. As of March this year, Egypt's broiler production has dwindled to about 60 to 70m per month, down from roughly 120m before the crisis.

Poultry consumption in Africa is significantly lower compared to developed markets, presenting a substantial opportunity for long-term growth. While the continent constitutes 16.7% of the global population, it accounts for just 4% of the world’s poultry production. The African poultry market is projected to expand at a compound annual growth rate of about 4.7% over the next decade. Due to generally low production levels, African countries have increasingly relied on poultry imports. From 2001 to 2021, poultry imports grew from 0.33m tonnes to 1.96m. This figure is anticipated to reach about 2.54m tonnes annually by 2031. 

 

References

‘Investment in ETC Group Limited’, Mitsui & Co., 20 November 2017

‘Agribusiness in Africa: Investor reveals which areas hold the most potential’, How we made it in Africa, 09 September 2020

‘Agribusiness prospects in East and Southern Africa: Investor shares his insights’, How we made it in Africa, 25 March 2021

‘This company is betting big in Africa's agricultural potential’, CNN, 10 May 2021

‘Poultry sector in Africa set for growth’, Farmer's Weekly, 13 May 2022

‘Digitalising the poultry industry in Africa’, African Union Development Agency, 15 September 2022

‘ETG and Mitsui’s Farmers 360 Link announces supply to Ron Herman, Japan’, ETC Group, 24 March 2023

‘Egypt's poultry sector reels from currency turmoil, driving up prices’, Reuters, 27 March 2023

‘Mitsui invests in an integrated production business in Egypt, encompassing the production of breeding chickens, the production and processing of broilers, the manufacturing of processed food, and sale of these products’, Mitsui & Co., 16 November 2023

‘Wadi Group welcomes Mitsui’s investment in Wadi Poultry S.A.E. & subsidiaries to support its future growth and expansion plans’, Wadi Group, 19 November 2023