Novatek division ensures small-scale farmers benefit from economies of scale

LUSAKA, ZAMBIA – Economies of scale have enabled the “democratisation” of the local stockfeed industry, helping small-scale farmers to compete on equal terms with their commercial counterparts in the supply of livestock.

And those efficiencies and affordability of animal feed have been passed down the value chain to consumers, ensuring they enjoy high quality, well-priced meat, dairy products and eggs, while still supporting small-scale suppliers to turn a profit, according to Walter Roodt, General Manager of Zambeef Product’s Novatek stockfeed division.

Mr Roodt was speaking during a tour of the Novatek plant today (February 26) by a delegation of seven public and private sector experts on a World Bank South-to-South study exchange visit from Mauritania.

“Our aim is to have the most efficient feeds with economies of scale so that we have the best feed at the best price and also pass that on to small-scale farmers at the same price we supply the Zambeef group,” he said.

Novatek produces 13,000 tonnes of stockfeed every month to feed chickens, cattle, pigs, goats, sheep and fish. Some 30 percent goes into the Zambeef value chain to be fed to poultry, cattle and pigs, which are then slaughtered, processed and sold in the group’s shops countrywide.

The remaining 70 percent of the stockfeed is sold to farmers across Zambia and the Southern Africa region. Exports account for some 8 percent of revenue.

Cost savings made from processing stock feed in bulk allow all farmers to compete on equal terms in rearing their livestock, explained Mr Roodt. This in itself highlighted one of Zambeef’s main concerns which has always been to lend its support to local, small farming communities, he said.

The leader of the delegation, Haroune Sidatt, was impressed with the Novatek plant and described it as being “the model example to other African countries” especially after Mr Roodt explained in great detail how the Novatek’s feed quality was improving and becoming a force to be reckoned with in terms of competition in the region, backed by ISO9001 quality standard approval.

Mr Sidatt explained that Mauritania had a population of 2 million people, with 6 million goats and sheep, 4 million cattle and 2.5 million camels. Despite the tradition of livestock rearing, the country did not add much value, mainly exporting live animals and importing animal feed. The delegation was keen to learn from Zambeef about how it could make forward and backward linkages, he said.

Stockfeed accounted for 18 percent of the Zambeef group turnover and 10 percent of gross profit in the financial year ending September 30, 2014. A second pelleting line was added to its Lusaka factory in May 2014, enabling it to produce 118,885 tonnes of annual feed during the year.

About Zambeef Products Plc
Zambeef Products Plc is the largest integrated agribusinesses in Zambia.
The group is principally involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, stock feed and flour. The group also has large row cropping operations (principally maize, soya beans and wheat), with approximately 8,350 hectares of row crops under irrigation and 17,000 hectares of rain-fed/dry-land crops available for planting each year. The group is also in the process of rolling out its West Africa expansion in Nigeria and Ghana, as well as developing a palm project in Zambia.
It slaughters more than 80,000 beef cattle and 6 million chickens, and processes 8 million litres of milk per year. The company has 122 retail outlets throughout the country, along with three wholesale depots.
More information is available at www.zambeefplc.com.