Olam Agri acquires the second biggest poultry feed producer in Senegal

Photo credit: Olam Agri

Singapore-based food and agribusiness major Olam Agri has acquired the Senegalese animal feed producer Avisen for US$18.6m. This move is part of its effort to enhance and broaden its capabilities in animal feed and protein production.

Avisen, the second-largest poultry feed supplier in Senegal, was established in 2000 by two veterinarians. Operating from its factory in Rufisque, on the outskirts of Dakar, Avisen produces over 100,000 tonnes of feed annually. It also processes broilers – chickens specifically raised for meat – at its newly constructed slaughterhouse.

Olam was drawn to Avisen because of the quality of its products, its efficient distribution network, and its field teams that offer technical advice to poultry farmers. Olam stated that combining its own global commodity sourcing networks and manufacturing expertise with Avisen's knowledge of the local market, will enhance both the quality and cost-efficiency of animal feed in Senegal. The deal also leverages synergies with Olam’s existing wheat milling business in Senegal.

The transaction extends Olam Agri’s feed and protein operations in West Africa, where it already ranks as one of the largest producers of animal feed and day-old chicks in Nigeria. The company operates the largest integrated animal feed and poultry breeding farm in Kaduna, Nigeria. Alongside a second facility in Kwara State, the company annually provides over 500,000 tonnes of poultry feed to local farmers and distributors.

The Senegalese poultry industry has seen substantial growth since 2006 after the government imposed a ban on the import of most poultry products. Between 2015 and 2019, chicken output increased from 51,000 tonnes to 78,000 tonnes. Poultry production is anticipated to reach 145,200 tonnes by 2026, up from 120,710 tonnes in 2021. This surge in demand for poultry is attributed to shifts in consumer eating habits, including a greater reliance on fast food.

One of the primary obstacles to the competitiveness of commercial poultry farming in Senegal is the reliance on imported maize for feed. The cost of feed can account for as much as 70% of the price of a chicken. Senegal’s maize industry is still in its infancy, marked by limited production and challenges in executing contracts with the poultry sector.

The World Bank projected Senegal to be the second-fastest growing economy in Africa in 2024, with an anticipated growth rate of 8.8%, a sharp increase from 4.1% in 2023. But its reputation as one of West Africa's most stable nations took a hit following President Macky Sall’s controversial decision to postpone the presidential election. This surge is expected to be fuelled in part by its nascent oil and gas sector, notably the initiation of production at the Greater Tortue Ahmeyim and Sangomar fields in 2024. Investments in infrastructure, including power generation, transport, and information technology, along with contributions from agriculture and tourism, are also expected to bolster the economy.

 

References

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

‘Assessing protectionism and its impact from consumers' perspective: The case of Senegal's poultry import ban’, World Food Policy, April 2021

‘Commercial poultry success stories in sub-Saharan Africa: Senegal as a study case’, Forum for Agricultural Research in Africa, February 2022

‘Unraveling the effects of import bans on domestic poultry production: a case study of Senegal’, Springer Open, 11 October 2023

‘Global Economic Prospects’, World Bank Group, January 2024

‘Protests in Senegal turn deadly as political crisis deepens over election delay’, France 24, 10 February 2024 

‘Senegal election crisis shakes support for Macky Sall’s coalition’, Reuters, 04 March 2024

‘Olam Agri acquires Avisen to expand its feed capabilities into Senegal’, Olam Agri, 04 March 2024

‘Nigeria’, Olam Agri, Accessed 08 March 2024

‘Senegal poultry industry outlook 2022 - 2026’, ReportLinker, Accessed 08 March 2024