Boost for cattle farming in Tanzania
29 May 2013, 14:26
Cape Town - Agri-Vie, the sub-Saharan private equity fund investing in food and agribusiness, has announced an equity investment of $6m into the Tanzania Food Corporation, the owners of Mtanga Farms in southern Tanzania.
Tanzania, which has the second largest cattle population in East Africa, also has one of the lowest per capita meat consumption and supply, far below regional and global averages for emerging markets.
According to Herman Marais, Agri-Vie’s managing partner, the acquisition follows fast growing consumer demand for processed beef products due to rapid urbanisation in the region and spurred on by growing consumer spending in the emerging markets of East Africa.
“There is a growing demand for quality meat products thanks to a growing middle class, increased investment, increasing awareness of food safety and the growth and development of a number of sectors in the country.”
Marais said there was at present a low level of consistent, competitive supply of quality beef meat products produced in Tanzania.
“Tanzania once had a thriving beef industry and there is now ample potential to revive the market.”
Alan Mayers, CEO of Mtanga Farms, said there had been a lack of adequate facilities and distribution networks.
“There is currently a shortage of quality ranches and quality beef cattle for slaughtering, due to the deterioration of the genetic quality of cattle, as well as only a handful of fattening lots, registered abattoirs and meat processors in the country.
“As a result, almost all meat for the urbanised market is imported or supplied through informal abattoirs and butcheries.”
However, according to Mayers, the private informal sector has continued and endured in the form of small scale (nomadic) cattle rearing and Tanzania still has a favourable grazing landscape resulting in relatively high stocking rates and relatively low animal feed costs.
“There is an estimated cattle population of between 15 - 18 million and an average stocking rate of one animal per three hectares, substantially higher than in South Africa, where it’s 6ha/animal,” Mayers says.
He went on to say that with the demand for animal proteins increasing, higher income levels and widespread urbanisation, the industry had significant potential, nationally and regionally.