Animal Feeds Business: Simon Ngugi confesses that when he ventured into the animal feeds business about four years ago he knew very little about the industry.
Today, he has carved a niche in the feeds business and is making it big. Ngugi’s Nile Feeds and Cereals Limited, based in Busia County, supplies companies and farmers with the raw ingredients they need to make their own animal feeds.
In a good week, he says that he sells up to 100 tonnes of products making about Sh. 1.6 million per month.
Ngugi’s journey into the feeds business took several turns. Initially, he wanted to be a dairy farmer in his native Nakuru County. In 2011, he gathered his savings and bought two grade cows.
Ngugi sits in the middle of a supply chain that connects farmers and feed manufacturers to cheap raw materials. He sources his products from Jinja, Uganda, where he argues the prices are friendlier.
“At the beginning there were challenges especially in stocking as prices in Kenya were too high. This is the reason I saw it prudent to seek services from Uganda,” he says. He buys maize meal, wheat, soya and cotton cake which he then sells to clients. These products are in high demand as companies and individual farmers try to avoid the high costs associated with buying ready-made feeds.
He sells his products in Mumias, Kakamega, Eldoret, Nairobi, Kiambu and Meru. Some of the companies that buy from him include Gold Farm Feeds in South Kinangop, Super Choice Feeds (Nyahururu), and Shashishi Animal Feeds (Mumias).
“My first clients were farmers in my Nakuru neighbourhood. They saw how their animals thrived after feeding on my products and kept coming back,” he says.
Demand for animal feeds has grown significantly and Ngugi says he plans to set up stores in Nairobi, Kiambu and Nakuru next year with the prospect of investing in a mill and branding his own products.
“I am humbled at how this establishment has grown from a simple entity to a middle range supplier with over 100 clients. With a mill I will be able to increase production tenfold and also create jobs for hundreds of youth,” he says.
One of the major challenges entrepreneurs in the animal feeds industry face is lack of capital for expansion, he says. He is also concerned that interest rate caps introduced by the government have led to capital flight from small enterprises like his.
Political uncertainty has polarised the country and slowed down his business, he says.
Ngugi says the government should minimise on importation of products such as fish, eggs and poultry and instead motivate local farmers to produce them.
“We get a lot of cheap products from Uganda, for example eggs. Poultry farmers who depend on expensive feeds for their layers for eggs will definitely make losses.’’
He advises the youth to venture into agricultural businesses. “There is still space, the market is open and demand is high.”