Simon Ngugi confesses that when he ventured into the animal feeds business about four years ago he knew very little about the industry.
Today, he has carved a niche in the feeds business and is making it big. Ngugi’s Nile Feeds and Cereals Limited, based in Busia County, supplies companies and farmers with the raw ingredients they need to make their own animal feeds.
In a good week, he told Enterprise, he sells up to 100 tonnes of products making about Sh1.6 million per month.
Ngugi’s journey into the feeds business took several turns. Initially, he wanted to be a dairy farmer in his native Nakuru County. In 2011, he gathered his savings and bought two grade cows.
But once he had the cows he faced a big challenge: feeding them. “It’s during this time that I faced the challenge of feeding two hungry heads.
While I spent a lot on feeds, milk production was not worth the effort. Profits were dwindling. In short I was making losses,” the 35-year-old father of two says.
He quit the dairy business after about a year. He headed to Busia to try his hand at a completely new venture; selling mitumba. But the business had its own challenges and he quit. One day, a friend introduced him to the animal feeds business. He took to the business like a duck to water, he says.
The venture picked up fast, a refreshing change after years of struggling to make it as a businessman. Discipline, he says, is a big part of his success.
“It has not been a walk in the park. It has taken a lot of hard work, resilience and determination to put up this establishment. This is a very competitive industry but what has helped me is that I am a keen observer despite having no experience,” he says.
Ngugi sits in the middle of a supply chain that connects farmers and feed manufacturers to cheap raw materials. He sources his products from Jinja, Uganda, where he argues the prices are friendlier.
“At the beginning there were challenges especially in stocking as prices in Kenya were too high. This is the reason I saw it prudent to seek services from Uganda,” he says. He buys maize meal, wheat, soya and cotton cake which he then sells to clients. These products are in high demand as companies and individual farmers try to avoid the high costs associated with buying ready-made feeds.
He sells his products in Mumias, Kakamega, Eldoret, Nairobi, Kiambu and Meru. Some of the companies that buy from him include Gold Farm Feeds in South Kinangop, Super Choice Feeds (Nyahururu), and Shashishi Animal Feeds (Mumias).
“My first clients were farmers in my Nakuru neighbourhood. They saw how their animals thrived after feeding on my products and kept coming back,” he says.
Demand for animal feeds has grown significantly and Ngugi says he plans to set up stores in Nairobi, Kiambu and Nakuru next year with the prospect of investing in a mill and branding his own products.
“I am humbled at how this establishment has grown from a simple entity to a middle range supplier with over 100 clients. With a mill I will be able to increase production tenfold and also create jobs for hundreds of youth,” he says.
One of the major challenges entrepreneurs in the animal feeds industry face is lack of capital for expansion, he says. He is also concerned that interest rate caps introduced by the government have led to capital flight from small enterprises like his.
Political uncertainty has polarised the country and slowed down his business, he says.
Ngugi says the government should minimise on importation of products such as fish, eggs and poultry and instead motivate local farmers to produce them.
“We get a lot of cheap products from Uganda, for example eggs. Poultry farmers who depend on expensive feeds for their layers for eggs will definitely make losses.’’
He advises the youth to venture into agricultural businesses. “There is still space, the market is open and demand is high.”