The pig subsector bears tremendous opportunity for growth and value creation for many entrepreneurs in Kenya. Many value addition opportunities are available throughout the entire value chain.
On 12th February, 2015 Strathmore Business School (SBS) hosted a Pig Value Chain Stakeholders meeting. In attendance were pig farmers, feed producers, abattoir owners, pork processors, consultants, development partners, county executives and the representatives from the Kenya National Pig Farmers Association.
The meeting was convened by Latia Resources Center, SBS and Agriprofocus. The meeting aimed to provide a platform for discussion on the strategic alignment needed in the sector, ahead of the launch of the National Pig Strategy by H.E The President of the Republic of Kenya, Uhuru Kenyatta slated for next month.
During the session it become apparent that the value chain is fraught with many challenges and gaps. However, these challenges present significant opportunities to entrepreneurs.
To begin with, the quantity of pigs in the country is not sufficient to meet regional demand. In Kenya, small-scale production is practiced by 70 % of pig producers (KNBS 2012). In 2009, there were 187,000 pigs in Kenya and of these, 84,000 were raised in traditional/backyard systems.
Annual consumption of pork is projected to increase by 155 % in Sub-Saharan Africa between the years 2000 and 2030 and by 167 % across low-income countries globally (FAO 2011). Farmers Choice, the main pork dealer regionally, exports 2000 tonnes per year, mainly to the Common Market for Eastern and Southern Africa (COMESA) Region. Of this, Farmers Choice imports 660 tonnes of pig carcass from Brazil, Canada, Germany and Italy.
Free-range bred pigs are unattractive for the export market as the stringent quality requirements of these markets are hard to achieve by free-range systems. This presents a significant opportunity for investors seeking to breed and rear pigs professionally and at above breakeven scale.
The table below shows the ratio of pigs produced locally that make it onto the commercial sector.
TABLE 1: Distribution of pig holdings within the country
|Province||Pig population||Commercial sector||Traditional/Backyard sector|
|Western||87 838||3 512||84 325|
|Rift Valley||48 495||14 579||35 654|
|Nyanza||27 612||900||26 712|
|Eastern||43 480||35 654||7 826|
|Coast||5 243||5 243||0|
|Central||91 977||75 421||16 556|
|Nairobi||29 976||13 976||16 000|
|Total Kenya||335 301||149 965||187 073|
Source: KNBS 2009 Census; MOLD Department of Livestock Production Estimates, 2010
Pig feed poses a challenge as well. Due to the scarcity of pig feed ingredients; the cost of production is high and subsequently passed on to the farmers. Entrepreneurs are needed in this space to either produce the feed ingredients or source them from low cost, grain producing countries. The cost of feed currently constitutes up to 70% of the total cost of production and as such solutions from enterprising Kenyans are needed.
The productivity of Kenyan pigs is low. Pigs are naturally very prolific, but with the substandard breeds stocked by most small scale farmers and the poor living conditions thereafter provided, productivity is greatly hampered. For breeding, Farmers Choice, the major pig breeder in Kenya, imports superior parent stock from Denmark. Currently they have 65 Large White/Landrace/Duroc cross-breeding boars and 2500 sows, which are the source of breeding stock for their major farms for slaughter and their contract farmers. The farms have a monthly output of 3800 piglets, 3600 weaners, 3200 baconers, 120 pregnant gilts and 300 sows. There is significant opportunity for entrepreneurs to offer breeding stock to the many farmers on the Farmers Choice waiting list.
A pig can be processed in its entirety. Preparations of pig parts into specialties include: sausage, bacon, gammon, ham, skin into pork scratching, feet into trotters, head into a meat jelly called head cheese (brawn), and consumption of the liver, chitterlings and blood (blood pudding or black pudding).
Entrepreneurs have the opportunity to set up factories and produce these items. According to the USDA’s Foreign Agricultural Service, more than 100 million metric tons of pork products were consumed worldwide in 2012. Increasing urbanization and disposable income has led to a rapid rise in pork consumption in China, where 2012 consumption was 20% higher than in 2009, and a further 5% increase projected in 2013. 2014 recorded a total of 110.075 million metric tons of pork products being consumed worldwide. The opportunities in pork product value addition at a global stage is immense.
Delving into value addition will also resolve the age old problem affecting most value chains in Kenya; route to market. The processors will be in a position to receive pork produced by the farmers who have taken to pig farming.
Pig keeping tends to be an attractive option to farmers for several reasons: pigs require minimal inputs and labour, have high feed conversion efficiency, produce offspring in large numbers, and have short intervals between generations. Extreme poverty in Kenya can be alleviated through pig production but value addition is needed to identify and remove constraints in route to market to realize the full potential benefits of pig production.
Strathmore Business School is pleased to have been part of this important step of bringing together stakeholders towards developing competency in the value chain We are optimistic that stakeholders in the sector will get organized and work together to realize full potential of the sector.