Thursday, September 16, 2021

Small poultry farmers face squeeze in the market

Small indigenous poultry farmers in the country could find themselves without a market or have their market share further reduced following revelations that one of the dominant players in the poultry sector, Country Bird Holdings Ltd, a regional player, has outlined plans to expand some of its operations on the southern African region including in Botswana.

In an effort to build sustainable local poultry production, the government recently financed about 245 broiler growing farms which are said to be facing stiff competition from seasoned players of the industry.

Reports indicate that Country Bird Holdings, a South African company which has business partners in Botswana and also has other poultry operations through AIDC (which is 100 perecent owned by the Satar Dada family) recently secured a loan over P231 million loan from the International Finance Corporation, an arm of the World Bank to fund its proposed expansions.

The loan is said to have been secured with an intention to increase capacity at some of its plant in the southern African region. It has emerged that the funds sourced from the IFC will be used to increase chick production in Botswana as well as in neighbouring Zambia. In Zambia, the funds are expected to expand the feed mill capacity while at the same time plans are in place to increase broiler meat processing capacity at the Mafikeng operations in South Africa.

The reports come at the time when there have been serious concerns on the concentration of ownership in the poultry industry in the country. According to the Botswana Institute of Development Policy Analysis (BIDPA), based on international prices, the poultry industry in Botswana is uncompetitive and arguably it is characterized by an industry structure that is duopolistic or oligopolistic.

AIDC together with Basha Holdings own Dikoko tsa Botswana which is an abattoir Dikoko tsa Botswana buys live birds from Tswana Pride and other independent small broiler growers. AIDC owns 100 percent in Tswana Pride who in turn owns 100 percent in Cold Line.

Further investigations conducted by the African Competition Authority through the local Competition Authority shows that Tswana Pride purchases day old broilers for its farming operations from Ross Africa Breeders and it has abattoir and processing facilities.

At the same time, business transactions indicate that Coldline is the distributor for Tswana Pride products under the brand name Tswana Pride.

CBH, through its 60 percent share in Ross Breeders Botswana (Pty) Ltd has breeding operations in Botswana. Ross Breeders Botswana is owned by CBH and AIDC.

A recent study by the African Competition Forum found out that poultry industry in the region is oligopolistic in nature. The study showed that ownership in this sector is concentrated on a few players while some of the dominant players operated at the different stages of production across all the four countries involved.

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