adminZIMBABWE’s poultry sector has shown massive growth for the past five years with the Zimbabwe Poultry Association anticipating that it would soon be a major contributor to the country’s gross domestic product although increased supply and decreasing demand has affected most farmers.
According to the ZPA, a range of sizes of units had sprung up — from the medium size units of 1 000 birds to massive industrial scale operations.
A survey of some farms in areas surrounding Bulawayo shows a picture of an industry that needs to realign itself with new trends or else die a natural death.
Kobb chickens farm located in Kensington has the capacity and infrastructure to sustain about 18 000 birds at full capacity but managing director Mr Vengai Runyowa said only 6 000 birds are being bred due to low demand and increased operational costs.
This means the farm is operating at about 33 percent capacity and has had to lay off half of its workers to manage costs.
“When we started this business, we were coming from a low base and chickens became big business. We invested in a lot of infrastructure like freezers and refrigerators, plucking machines, packaging equipment, heaters and the buildings among other things but now all that is lying idle as business is at an all-time low.
“In 2012 and 2013, business was very good but last year we ran huge losses and as you can see, the cold rooms are stacked with chickens that have not been bought, meaning we are incurring very high refrigeration costs and with unreliable power, they are rotting,” said Mr Runyowa.
He said lack of disposable income is affecting poultry production in the country and that the producers have responded to market demand by significantly reducing prices of chickens from about $3/kg to between $2,50-$2,70/kg.
He said this does not tally with prices they are offered by chicks suppliers who have increased their prices from between 70-75c per chick to around 85c.
“The market has been calling for reduction on finished products and as producers we responded accordingly but it is now a double blow to us as suppliers have increased prices of chicks. No one can sustain a business this way and we are making losses as when all costs are added up including feed and utilities, we are left with nothing,” Mr Runyowa said.
Another major challenge highlighted by poultry producers is a shrinking market.
“We used to be major suppliers to retailers like TM but when it changed to Pick and Pay, they stopped ordering from us. As indigenous farmers, this was a huge blow and our market has shrunk,” he said.
Mr Runyowa said as winter approaches, the situation is set to be direr as power costs increase thus profit margins becoming thinner.
Kobb Chickens has at the moment 5 000 two-week-old chicks and 1 000 less than a-week-old chicks which are part of a pilot project with National Foods.
A local buyer, who declined to be named, who runs butcheries around the city confirmed that buying trends have changed and that they no longer order as many chickens as people are not buying them as much as they did.
He said in previous years they would run out of chickens but now weeks go by without significant movement.
“It is true that the poultry sector trends have changed and business is not as good as it was in previous years. Customers are not spending as much as they used to,” he said.
Springs and Valleys Chickens owner Mr Kudzai Mumvuri said one of the challenges they face as indigenous producers is that despite Bulawayo having big companies, they were not buying from them but ordering chickens from outside town.
“We need that support from the big companies. Of course we have had some retailers like Choppies supporting us but for the industry to grow and remain viable, it is imperative that companies like Nandos, Chicken Inn and Chicken Slice support local producers,” said Mr Mumvuri.
He said another worrying factor was that cheap imports were still finding their way into shops although Government has banned the importation of poultry products.
ZPA chairman Mr Solomon Zawe said demand of poultry products has been affected by the liquidity crunch and urged maize and soya farmers, breeders of chicks as well as suppliers of stockfeed to lower prices in order to save the sector.
“The sector has grown a lot with a huge number of smallholder farmers and the market has also become flooded. As supply increases, demand decreases and it is up to us as a sector to have the right prices to attract customers,” Mr Zawe said.
Mr Zawe said the poultry industry has seen increased players fighting for the same customers as well as battling high operational costs.
He said they hope the low business period was a passing phase which will improve as the year progresses.
Responding to questions on why the sector doesn’t export the excess produce, Mr Zawe said the costs are too high.
“We have mulled the idea of exporting but we cannot as costs are too high. We just want to encourage people to hang in there and not lose hope. This is a sector that benefits a lot of people and downstream industries,” he said.
Bongani Ndlovu