Olam meets poultry farmers, asks for timeline on downstream

Farmers reaffirm position In a bid to resolve the ongoing impasse between Olam and smallholder poultry farmers across the country, the management of Olam, led by its Managing Director, Dr Vinod Kumar Mishra and the Kano State chapter of the Poultry Association of Nigeria (PAN) have met to dialogue and ease tension. Daily Trust had […]

• Farmers reaffirm position

In a bid to resolve the ongoing impasse between Olam and smallholder poultry farmers across the country, the management of Olam, led by its Managing Director, Dr Vinod Kumar Mishra and the Kano State chapter of the Poultry Association of Nigeria (PAN) have met to dialogue and ease tension.

Daily Trust had earlier reported that PAN’s grumble with Olam was that the multinational giant ventured into the downstream sector, thereby competing with and suffocating their own customers in the market.

The company had earlier addressed the national meeting of the poultry farmers in Abuja with a view to resolving the crisis in the interest of the industry.

The recent Kano meeting, which was held on August 23, 2019 at PAN Kano Secretariat in Kano, highlighted the market insecurity and vulnerability of smallholder farmers.

It was reliably gathered that at the meeting, which Dr Mishra, Olam’s MD convened, the multinational company agreed to move out of the downstream sector of the poultry industry in phases.

The company requested to be given till March 31, 2020 to shut down some of the farms to minimize the company’s losses in addition to agreeing not to sell eggs to dealers from Kano during the period.

Sources also said that Olam promised to establish an egg powder factory to deal with the glut in Northern Nigeria and to “conduct a feasibility assessment for the opening of the eggs market to neighbouring countries and establishing eggs aggregation points in collaboration with PAN in Kano.”

When Daily Trust spoke with Alhaji Umar Kibiya, PAN Chairman, Kano State Chapter, on phone, he confirmed that the meeting was held and issues discussed but denied signing any agreement to that effect, adding that consultation was still on with the national body.

Alhaji Kibiya said Olam had agreed on a number of issues, including withdrawing from the downstream area.

“That is what they have agreed to; but something that you don’t have written down as a document is not something that you can rely on. It’s a gentleman’s agreement. What we want is for them to move out of the downstream sector. From their GM, they said they required a timeline to move out of egg production,” he said.

Some farmers in the state who spoke with Daily Trust expressed concern that Olam might be fronting for other big poultry farms which, along with other farms, were creating negative market situation for the smaller holder poultry owners.

Sources in PAN Kano said they were working hard to also come up with measures to stop the influx of eggs from other big players so that they are not squeezed out of the market.

“They want to avoid a situation where Olam comes into the market through the back door,” the state PAN chairman also said.

Why Kano is very important to the big players

Kano is a trans-Sahara trade point for all commercial activities. It links with countries like Niger Republic, Chad Central Africa Republic up to Senegal and Mali.

“A lot of these people bring produce to Kano, which is the hub, and then people take it from Kano to other countries and other parts of Nigeria. Some people even buy and take it back to the point of production again and sell. So Kano is a hub.

“Most of the major dealers of products are in Kano – the big players. Kano is a networking point. Yes, you can produce in Lagos, bring it to the market in Kano and take it back to Lagos and sell. Here you have big dealers who invest their money and buy directly from the producers and warehouse and people come here to buy.

“Secondly, the population counts. Whatever you bring to Kano, at least 50% will be consumed in Kano then the rest goes to neighbouring states and outside the country. So whenever there is a problem in Kano or Kano does not take a product – you will see saturation and anger in the market,” Alhaji Kibiya told Daily Trust.

In Kaduna

Although there were only sketchy details of the Kaduna meeting, Daily Trust learned it was similar with that of Kano.

Dr Usman Umar, a veterinarian with 20 years’ experience in the industry, saluted OLAM for what he called “reversing an obviously counterproductive management decision.”

Olam reacts

Daily Trust contacted Mr Ade Adefeko, Olam’s Vice President, Corporate and Government Relations, for his reaction.

He said: “We had an experimental broiler farm for feed improvement and the broilers were sold then in the open market but that was discontinued in the month of May.

“As regards layers, we have a farm we are managing but we are hoping to exit that between Q4 2019 and Q4 2020. With respect to eggs sales from that farm under our management, we have stopped same in Kano.

“We received a request to establish an egg processing facility in Kano and we are willing to conduct a feasibility study on it to determine scope.”

Mr Adefeko stressed that Olam is willing to participate in any PAN-led industry sponsored egg promotion initiative, adding that as a major player, the growth and development of the industry was important to them.

“We came into the industry to help reduce imported poultry meat and with the number of broiler day old chicks we have produced in the last two years, we have reduced imports by about 125 million dollars and have in turn created between 150,000 and 200,000 jobs directly and indirectly,” he said.