Tuesday, August 6, 2019

How To Start Lucrative Chicken Farming In Kenya

Are you thinking of going into chicken farming in Kenya? I’m sure you’ve heard a lot about the profitability of poultry farming in Kenya and how it is capable of employing millions of people, growing GDP and making you millions of Kenyan Shillings.



Well, as someone who has a first-hand experience of living on and working in a chicken farm, I want to analyze the profitability of chicken farming in Kenya. Chicken farming is  the most common animal farming business in Kenya. If you want to go into the chicken farming business in Kenya, you need to be aware of the cost and profit potentials.

I’ll be using four parameters to analyze the profitability of chicken farming in Kenya. These parameters are:

1. Startup capital
2. Operation & Maintenance (O&M)
3. Market
4. Profitability

In order to do a fair and thorough analysis, I’ll be analyzing the profitability of chicken farming in Kenya from the standpoint of someone who’s about going into chicken farming in Kenya with 500 birds (layers)


STARTUP CAPITAL

I’ll be making an assumption that there’s an available land already. I won’t be factoring in the cost of getting a land.

Chicken Farming in Kenya startup costs:

    500 birds (point-of-lay layers): ksh275,000
    5 cages (96 birds-per-cage) to house the 500 birds: ksh250,000
    Cage house or pen construction: ksh200,000
    18-months’ worth of feeding (using packaged feeds): ksh1,522,500

OPERATION & MAINTENANCE (O&M)

Chicken farming requires a very high level of O&M because the quality of their production depends on how well you manage them. You have to feed them 2 to 3 times a day. You have to make sure you give them quality water to drink. And from time to time, they’ll be visited by a veterinary doctor who will administer drugs and injections to them in order to keep them healthy. Failure to do this will expose your birds to all manner of diseases and flus

Also, you’ll need to hire one farm labour to help you with the O&M. Hire someone who lives close to your farm so that you won’t have to pay him or her too much. The current wages of a farm labour for chicken farming in Kenya is between ksh5, 000 to ksh20, 000 a month.

MARKET

There’s a very good market for poultry products. Eggs are always in demand from both individuals and companies. Companies such as bakeries, restaurants, hotels etc. use eggs for making scotch eggs, cakes etc. While individuals love using eggs to eat bread, yam and to bake as well. The good thing about poultry (layers) is that after they’ve spent 18 months laying eggs for you, you can sell them off at a higher price than you bought them. If you can time the sales of your old layers (that’s what they call layers that have reached the end of their laying cycle) to coincide with a festive period like Christmas or Easter, people will fight among themselves just to buy your chickens.

The excretion of poultry can also be bagged as organic manure and sold to vegetable farmers as well. There’s a very good market, all-year-round, for everything that your poultry farm produces. Selling any of your products will never be a problem. Chicken farming in Kenya is a business with a very strong cash flow

Profitability Of Poultry Farming In Kenya

PROFITABILITY

I’ll exclude the O&M costs from these calculations because the variables can’t be accurately forecasted generally. They are specific to each person’s situation.


Your birds, if well raised and managed, have the capacity to produce 8,670 crates of eggs for you over an 18 month period i.e. 17 crates a day from the 2nd month to the 18th month. You can conveniently sell one crate of egg for ksh800. So, for 18 months, eggs alone will generate ksh6, 936,000 (8, 670 X ksh800) for you. At the end of their production cycle, assuming you have a death rate or mortality rate of 5% (this means 5% of your 500 birds, 25 birds, die during their production cycle)  you should have about 475 birds left in your farm after 18 months. Depending on what time of the year you choose to sell them (prices of chicken are highest during festive periods like Christmas and Easter) you can sell each old layer for a minimum of ksh1, 500 per chicken. So your 475 birds can generate ksh712, 500 (475 X N1, 500) for you.

From egg and bird sales alone over an 18 month period, you will generate a total sale of ksh7, 657,500. There’s also money to be made from selling their excretion as manure but the cash generated from this is insignificant compared to the eggs and chicken sales. This is an aspect of chicken farming in Kenya whose potential isn’t being properly harnessed.



With an invested capital of N2, 847, 500 and total sales of N5, 657,500, your gross profit margin is 30.9%. Note that most of the things you spent your money on like the cages and poultry pen to house the cages are fixed assets in nature. You will be able to use them for future layer productions and you don’t have to recover their cost in one production. In chicken farming, the tanks and most of the structure you put in place are fixed assets in nature and their costs would be recovered over several productions. Personally, I love the positive cash flow aspect of poultry farming in Kenya because you get to make sales on a daily and weekly basis.



CONCLUSION

Going by these four parameters that I’ve used to analyze the profitabilty of chicken farming in Kenya, chicken farming in Kenya has an overall rating of B.

Chicken farming is a good business to go into and it has unique strong points and weak points.



The trick in chicken farming is to know the techniques and practices that will reduce mortality (or death rate) and boost growth and production. The analysis above is not 'cast in stone' or fixed. It's meant to give you a general overview of cost implications. You can decide to do away with some items in order to reduce cost and boost profitablity. For example, yoou can decide not to use cages and you can opt to manufacutre your own feeds instead of buying already manufactured feeds.

Hope this analysis helps you to make the decision to start your chicken farming business. There are other things you need to put in place before starting a chicken farming business in Kenya but the ones highlighted above are the basics.

Don't forget to drop your questions in the comment section below.
Previous Post
Next Post

0 comments: