Rabobank Report: Time for Africa – opportunities remain wide open for African poultry investments
Capturing the African poultry investment opportunity
Poultry investment and egg industries have developed fast over the last decade in Sub-Saharan Africa and this is increasingly attracting interest from local and international investors. Rabobank identified this opportunity in its 2017 report “Time for Africa,” in which we highlighted the key drivers for investments in African poultry. We think opportunities for investors remain wide open. In this new report, we provide an updated view that also includes an egg industry perspective.
Time for Africa: The 2016-2019 investment story
Following a short slowdown caused by economic volatility in mineral- and oil-dependent countries in 2016, we have seen an acceleration of poultry investments in Africa since 2017, with Eastern Africa and parts of Western Africa, like Nigeria and Ghana, attracting greater interest from local and international investors. Several international companies have developed their positions in Africa, including modern retail and restaurant chains continuing their expansion; animal nutrition companies strengthening their positions throughout Africa; breeding companies establishing a more pan-African supply system; and equipment suppliers building distribution networks. Production is still dominated by local companies, and internationalization is managed by a few large African investors. But early international investors are taking positions to leverage the future growth path of Africa – one of the world’s largest pending growth markets (around 15% of the upcoming 20-year growth in global poultry).
The poultry investment opportunities remain wide open
The middle class in Africa is expected to continue growing, as the population doubles and more people move to big cities. These core fundamentals, together with the untapped potential of local feed grain production, offer an attractive investment opportunity. This will all lead to ongoing market growth and especially toward more products being sold via modern distributors and online platforms. Modernization at all stages of the value chain will continue, and such an environment will create an increasingly interesting platform for international investors. Investors need to realize that conditions in Africa can be challenging and require a very strategic investment assessment that takes all major factors (i.e. business climate, market growth, supply, and infrastructure) into consideration. If this is done well, the potential upside is big.
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