iGallus Limited

What type of equipment for an African poultry breeding farm?

"The person who has an axe does not lack firewood" A Swahili proverb

Do we choose known European brands or less known equipment from other parts of the world?

Budget

Equipment such as, feeding, drinking and egg collection systems constitute a big part of the capital cost of a new farm.

How much money is available for the project is a deciding factor in choosing housing and equipment.

How much?

There may only be so much money to spend and this initial amount is guided by the investors views on profitability of the operation in the African business environment and return on their investment.

To summarize, RISK.

We as poultry professionals understand and know the benefits of buying top quality brands in terms of lifespan of equipment and reliability. So do the few existing big poultry companies already operating in Africa.

New entrants

However, often I have found that African investors, business people and entrepreneurs starting new enterprises, have smaller budgets or are not willing to invest too much into housing and equipment. They normally would like to prove the concept first in a smaller way and then expand using cash flow later.

They put a time-frame of 3 - 5 years on testing this new business. With this in mind would you invest in the best most expensive equipment money can buy?

Often its not the choice of equipment that will fail your business but lack of good management, knowledge, market or even a poor accountant!

Choice

Thus with the LARGE choice of equipment available from new manufacturers from for example, China, the person with the money is often comparing and contrasting the often large price differences in equipment and housing.

I have worked with and seen quality results from a range of equipment, from Farm Made, Chinese made and European made. Four things have stuck out:

Management of the systems.

Investment philosophy of the owner.

Availability of cheap loans

It is not easy to get a loan in Africa, let alone for a new business, let alone for equipment (Other than vehicles) Thus most things are bought with cash.

Ever bought an iPhone 6 with cash for $800? Or does a Huawei smart phone for $60 sound better?

It is easier for business owners to secure loans for equipment in the west thus why not spend a little more and get quality? After all the loan repayments are for 10+ years.

Margins

The third is the profit margins of the industry. In Africa profit margins are larger than Europe, thus to replace a worn out set of cheap production equipment from cash flow after 5 years is more achievable than in Europe.

There is much more to the decision on what equipment to buy than I have raised here. My advice would be to invest in top quality management and install the equipment properly from the beginning.

Many thanks for reading again!

If anyone would like more information please contact me on jeremy@igallus.com