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Dutch firm Sets Up Sh3 Billion Animal Feeds Factory in Kenya

De Heus Animal Nutrition Ltd is expected to disrupt the local animal feeds industry reeling under high cost of production

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De Heus Animal Nutrition Limited, a global top 10 animal feed company will on Thursday 4th April, 2024 break ground for the construction of a state-of-the-art livestock feeds factory in Kenya. The factory is expected to be operational towards the second half of 2025 next year.

Located in Athi River, the Ksh3 billion plant will produce an estimated 200,000 metric tonnes of animal feeds targeted at the regional poultry, swine, aqua and ruminant sectors while creating upwards of 1,000 direct and indirect jobs across the animal feeds and related value chains.

The investment represents a significant milestone in De Heus Animal Nutrition’s commitment to advancing sustainable agriculture on the African continent through the production of high-quality animal feeds, by leveraging cutting-edge technology and global best practices that will now be available to farmers in the country.

The entry of De Heus Animal Nutrition Limited is expected to disrupt the local animal feeds industry, which has been reeling under high cost of production that has pushed out some players and driven the cost of feeds through the roof. The animal feeds industry serve mainly the livestock sub-sector in Kenya.

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Livestock plays an essential role in Kenya’s economy through directly providing food, income and employment to millions of Kenyans and indirectly providing raw materials to the agro-processing industry. However, the livestock’s contribution to agricultural GDP
has been declining. Poor animal husbandry, mainly because of poor feeding practices, has led to low livestock productivity.

In part, the high costs of commercial livestock feed, the unfriendly business environment for trade in livestock feed, and the weak regulatory environment have affected the
availability, affordability, and utilisation of quality commercial feeds to grow the livestock value chains. “This has resulted in increased competition from imports for livestock products and animal feed from neighbouring countries,” says Tegemeo Institute of Agricultural Policy and Development, the agricultural research arm of Nakuru-based Egerton University.

Tegemeo Institute says costs of animal feeds have been rising from 2021, with the price increases attributed to a shortage of raw materials such as soya and oil cakes seeing the most significant price increases, a situation that De Heus Animal Nutrition Limited will have to contend with.

According to the Association of Kenya Feed Manufacturers (AKEFEMA), the price of soya and oil cakes increased by more than 60% in 2021. The immediate impact of the rising feed prices has been losses by farmers amidst sticky output prices. As a result, farmers are cutting back production, and as a consequence, animal feed manufacturers are also being adversely affected.

Amid reports of farmers abandoning livestock enterprises such as poultry, AKEFEMA also reports the folding of small-scale feed manufacturers amid rising costs and increasing losses leading to massive job losses. Besides, animal feed wholesalers and retailers are increasingly importing animal feeds from neighbouring countries to meet demand from livestock farmers.

De Heus Kenya is part of Royal De Heus, a Dutch family owned company. De Heus Animal Nutrition produces a complete range of compound feed, premixes, concentrates and feed specialties. De Heus has been growing steadily in Africa and currently has a presence in Egypt, Ethiopia, South Africa, Ghana and Ivory Coast.

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Bill Yaura is a Correspondent for Business Today. He can be reached on email: [email protected]
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