Annual broiler demand in Ghana is estimated at 300,000 MT, with two-thirds of it met by imports of frozen chicken. The estimated gap of 100,000 MT, coupled with 19% annual growth for poultry products consumed in Ghana in recent years, offers Ghanaian poultry producers the opportunity to increase production to meet growing domestic demand and replace imports. Although broilers produced in Ghana are considered to be high quality, producers have not yet been able to build the economies of scale to compete on price with frozen imports from countries such as the United States and Brazil, where frozen broilers are produced on a massive scale.
Rapid urbanization and changing consumer tastes have spurred an increase in global food chain franchising companies and higher demand for processed chicken used in their menu items. The expected growth of these ready-to-go food chains has created investment opportunities in local broiler production and processing facilities to meet the quantity and quality specifications of these buyers.
Darko Farms & Co. Ltd. is the largest domestic poultry company in Ghana, with strong brand recognition. Located in Kumasi, Ashanti Region, the company has been in business since 1967, selling broilers, day-old chicks, and poultry feed on the local market. The company recently signed an MOU with global food chain operator KFC to be its exclusive supplier of processed chicken. It is now seeking $5 million for capital expenditures and working capital to upgrade its broiler production to meet the extremely high quality and hygiene standards set by Yum! Brands, Inc., KFC’s parent company. The contract will increase the volume of Darko’s broiler business by at least 67%, from 60MT/ month to 100MT/month.
Darko is seeking $5 million in long-term financing for capital expenditures and working capital. The company would prefer equity funding for capex, but would consider debt funding as well, depending on terms and pricing. These two types of financing will facilitate revamped operations to meet orders from Darko’s new partners.
Generation Investments Limited, a BAS provider in the USAID Financing Ghanaian Agriculture Project (USAID-FinGAP) network, has been providing business advisory services to Darko to review its operational and commercial activities and facilitate financing for its investment opportunities.
Key considerations include management and disposal of bird droppings and effluent from the proposed abattoir, as well as general sanitation on the farm to control odor emanating from the farm and abattoir into the atmosphere.
Initiatives by GoG and donor community that provide a supportive business environment for this investment are:
- GoG Broiler Revitalization Project
- ACDI/VOCA ADVANCE Project
- KFC Food Chain
Samuel Darko, Managing Director, +233 (0) 264 369 443, email@example.com