NAIROBI, Jan. 31 (Xinhua) -- Clement Sigona's milling plant, nestled in the northeastern part of the Kenyan capital, Nairobi, has been quiet for some time.
The wheels of his processing machinery have ceased turning. The number of walk-in clients is few and far apart. Even more worrisome is the shrunk number of personnel walking around the complex with subdued urgency.
"The business of making animal feed is in a dire situation. We have the capacity for 200 bags of animal feed a day, but now our production oscillates between 50 and 100. The costs of raw materials, electricity and diesel have shot up dramatically, rendering business unprofitable," Sigona, the director of Sigona Feeds, said during a recent interview with Xinhua at his plant.
"It is a disaster," he said.
The livestock sub-sector, which usually hires about half of the agricultural labor force in Kenya, finds itself teetering between loss and collapse.
In the last two years, the sector has been bogged down by a low supply of raw materials, adverse weather conditions, and soaring overhead costs.
Farmers, millers, feed retailers, and the entire supply chain now find themselves adopting radical measures such as layoffs, downscaling operations, or worse off, closing down businesses altogether.
At least 30 animal feed farms have closed shop due to these challenges, according to the Association of Kenya Feed Manufacturers.
Sigona's business used to support 12 employees but has to let 10 of them go.
"The other obvious step I took is to adjust the prices of feeds upwards," he said. "Even so, they still fall within the prevailing market price."
"Feed producers cannot hike the price in the same ratio to farmers because they are grappling with low prices for their byproducts. The implication is we are left with very narrow profit margins," Sigona said.
His firm, which has been in operation for over a decade, uses raw materials including soya bean meal, cottonseed cake, maize, wheat, together with other nutritional vitamins to produce animal feeds, and sells to clients in Nairobi and its environs.
For Sigona, the prospects of a rebound now are slim to none.
"I have lost three major customers because they could not keep up with daily increments," he said. "I have also taken the measure to stop supplying savings and credit entities that require a window of 40 days before making payment."
The cost of a 70 kg bag of dairy meal has shot up from 2,500 shillings (about 2.2 U.S. dollars) to nearly 31 dollars within a period of one year; the price of soybean meal has gone up from 0.61 dollars a kg to 1.14 dollars, Sigona said.
The cost of other raw materials for feeds have experienced similar surges.
Locally available ingredients such as cottonseed cake, soya bean meal, sunflower seed cake, and maize germ cannot satisfy the country's demand, so Kenya has been importing them from its neighbors and other African states such as Zambia and Malawi, which have seen their production fall due to such factors as COVID-19 and weather changes.
Zambia, a major exporter of soya bean and sunflower meal to Kenya, has imposed a ban on the export of soybean since last year, worsening shortage and pushing up prices in Kenya.
Late last year, Kenya removed duty on imported materials for the production of animal and chicken feed to help feed manufacturers, but observers say a ban on the import of genetically modified products, imposed since 2012, might lessen the measure's effect. ■
