Business
Farmcrowdy acquires Best foods, pushes to control meat supply
By ADEBAYO OBAJEMU
Investment in farming is risky, but there used to be a time when talking to people into investing in farming was a lot scarier than what it is today.
With the crude nature of farming, coupled with the general lack of information about agro-businesses, people generally settle for other investment options regardless of whether they get a better Return on Investment (ROI) compared to farming.
The truth, however, is that, although farming is a risky venture, it is highly lucrative. And for what it’s worth, credit will go to agro crowd-funding players redefining the idea of investment in farming as we now know it. One of the companies leading the revolution in agric business is Farm-crowdy.
Farmcrowdy, the agro-tech giant which was set up in 2016 as the first digital platform to connect farmers and buyers of farm produce and other stakeholders in the agric chain, designs and develops software. The company offers digital agriculture platform which focuses on connecting farm sponsors with real farmers in order to increase food production while promoting youth participation in agriculture.
It is officially exploring the business of selling meat after it acquired a majority stake in Best Foods, an agro company established 16 years ago. The Nigerian agro-tech firm has previously been crowd-funding farmers, but with the latest investment, it will expand its footprint in Nigeria’s Agric business.
This Nigeria’s first digital agriculture platform that empowers rural farmers by providing them with improved seeds, farm inputs, training on modern farming techniques and provides a market for the sale of their farm produce has indicated its intention to be a major player in the meat selling business.
Its interventions have given farmers the capacity to farm more acres and by extension lead to increased food production and security in Africa.
Since launching in 2016, Farmcrowdy has empowered over 25,000 small-scale farmers across Nigeria.
“We are committed to expanding our reach in order to continue to empower local farmers, positively impact their lives and their families while boosting food production and sustainability in Nigeria”, Kenneth Obiajulu, the founder told Business Hallmark.
Farmcrowdy has been reviewing its business operation, trying to diversify its portfolio. The company has been operating in the meat market silently since last year but this acquisition makes its ambition public and shows it has a long-term plan for the meat market.
The deal, according to this newspaper’s findings, exposes the company to the clientele and existing contracts of Best Foods in the meat market. This will fast track its presence in the market, as the agro-tech firm will serve beef and poultry meat to 50 meat markets across the south-west region of Nigeria, including 100 customer endpoints.
Also, with the capacity to process 120 – 200 bulls every day, Best Foods is one of the largest meat processors in Lagos and Nigeria. So, considering the market demand for meat supply in Nigeria, the acquisition is leverage for Farmcrowdy to tap into the two million consumers in Lagos and the 1.2 billion poultry meat demand in Nigeria.
Meanwhile, Best Foods’ assets and staff expertise will be readily available for Farmcrowdy when the latter finally launches its Farmcrowdy Meat Hubs in the second quarter of 2020.
The way the company has been operating silently crowd funding farmers has not gone unnoticed as the United Nations (UNIDO) last year presented Farmcrowdy with Disruptive Innovation in Agribusiness International Award.
Speaking on the acquisition, the Founder of Best Foods, Emmanuel Ijewere, said, “This deal with Farmcrowdy is a welcome development for us. It provides a major growth opportunity for both businesses. We are excited about the many possibilities.”
Part of the deal will see Ijewere join Farmcrowdy as a member of the advisory board. The Managing Director of Farmcrowdy, Kenneth Obiajulu, said, “Best Foods offers an exciting opportunity for Farmcrowdy to strengthen and expand its service offering in livestock production, processing, and supply.”
He added that “With a range of high profile clients, the acquisition supports Farmcrowdy’s strategy to lead the market and meet the requirements necessary to process approximately 45 cattle every day for meat consumption.
Best Foods Global (Nig.) Limited, which was set up 16 years ago by Emmanuel Ijewere, is a leading name in the live stock and seafood processing industry in Nigeria. Best Foods is at the forefront of providing quality and affordable livestock and seafood products.
Situated on a six-acre farm at Ajah with a modern abattoir, cattle lairage, poultry, piggery, fish tank/farm and a Value Adding / Processing and Packaging Plant, it handles meat processing and production from scratch to finish benchmarking against best global practices and ensuring that operations do not contravene religious beliefs.
It has about 50 employees with specialties in farm, meat, goat, sausages, bacon, abattoir, cattle lairage, poultry, piggery, fish farm, processing and packaging of livestock. Business Hallmark’s findings showed that the meat market is huge, especially in the Southern part of the country.
Currently, about 170 million people live in Nigeria. Beef consumption amounted to 380 000 tons in 2019 and is projected to grow up to 1.3 million tons by 2050. But meat market has poor infrastructure.
Slaughter of livestock and fresh meat trade is concentrated in the public open markets without packing and refrigeration, resulting in a significant reduction in the quality and shelf life.
This determines the launching of a commercial and industrial company able to solve the problems of the meat market and provide a mass public access to high-quality meat at a reasonable price. This is where big agro-processing giants like Best Foods come in to fill the gap. According to FAO stat there are 19.5 million heads of livestock in Nigeria with the production about 380 thousand metric tons of meat per year.
According to GEMS research (Funded by the World Bank and DFID, the Growth and Employment in States programme). It is estimated that annual domestic and imported slaughtering is around 7.5 million cattle (1 million tonnes) with a livestock value of N525-550 million.
While millions of Nigerian households are engaged in the primary production of livestock, the large national herd of cattle, sheep and goat is unable to meet the domestic demand for red meat. As a consequence, and be-cause of a ban and meat imports, Nigeria is the destination of a major informal regional trade in animals that stretches from Senegal to Sudan.
There are no livestock or meat exports from Nigeria due to the growing domestic demand, a situation that is not expected to change within the next 10-20 years.