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Uganda'sLivestockIndustry

CONTTNTS

N[A.P OF UGANDAO\ERVIEW OF THE INDUSI'RYDEWLOPNIENTS IN THE INDLTSTRYINVESTNTIENT OPPORTUNI'I IES

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7t0ul 2

UG,{NDA'S CON1PETITNE ADVANTAGEN{ajor Investors To datc

USEFLII, CONTACTS

This profilc \\'as prepared b-v thc Llganda In\cslmcnl ,\Lrtl']orjt] rljIh supporlfrom thr Inrernarional i)e\elopmcnt Agcnq (ID,\) Componenl for llganda'sPrivarc Sccror Comp€titivcncss Proj(l (PSC'l

ROUTE PI-A,NNING GUIDE_AFRJCA

U la n.la \ LIee locl, Indu st d

Overviewof the

LivestockIndustry

ivcstock production in Ugitnda contdbutes 7.5% and l7% to tolalGDP and agdcullural GDP rcspcctivcly. Il is an intr:gral parl of theagricullural systcm of many parls of thc country. Nlixed larming smallholdcrs and pastoralists own over 1X)% oI the catlle hcrd and 100% of thcsmall ruminanls and non nuninanl stock. Catllc arc thc most importantof all the livcstock.

Liv{rsto(k production has continucd lo grorr at a rate of ov(rr 2% pcrann!ün, in rcsponsc to increasing demitnd for milk and mcat in thf localmarket. Highcr rates ol gtoirth arc cnvisagcd as CovcrDmcnt pursucs itspolicics of modcrnising and conmercializing agriculture.

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Developmentsin the Industry

Sector Policies, Development Strategy and PlansThc ovcrall dcvelopmcnt stratcgt aims at mil\imising the potential ()1

llganda's livcstock sub seclor by providing invcstmcnt inccntivcs toincreasc animal inventorics and rclated agribusiness, supporling thedevelopmcnt of cfficicnl livestock production systcms for increasedproductivity to meet lhc domeslic demitnd, integlating production inlolhe main slrcam monelüry economy, and gencrafing ä surplus for cxport.This is oullincd in thc sectoral developmenl fram$r'ork thc Plan forNlodcmisation of Ag culturc.

The livestock developmcnt slralcgy focuses on the following:

. Establishing an efficient livestock discasc conüol systcm bÄscd oncost lecovery-

. ,\chie\ing sclf suflkicnry in mcat, milk, poullry and otber livcstockproducts.

. Promoting and dcveloping indust al linkages lbr livestock products

ln , l uL l j nB d ! t r \ , l l - , r l h . r . rnd m, . . r l p r i " i s { i nx .

. Encouraging the export of livestock and iivestock producls.

. strengthening research in livestock brccding in order to upgradc thequalit)' and producti\ily of th(' presenl livestock breeds.

t qündn \ t tw\tntl Inrlutn

TRENDS AND PERFORMANCE

Livestock populationsThe national livestock and poultry population increases at an average ratcof 3% per annum and was estimated to compdse 6 million cattle, 9.2million goats, 1.6 million sheep, 1.3 million pigs and over 25 millionpoultry in 1999. The indigenous breeds account for over 95% of thenational herd/flock. The Ankole longhom breed whose meat is low incholesterol levels dominates the cattle population. The Small East Africangoat and its larger sister, the Mubende breed, have the finest skin fiom anon endangered animal on the $orld market.

Table 1: Livestock wwlation estimates ('oOOs), 1991 2000

.torrcersrdtr:rtrt / llrrtracrr anri Background to the Buclget ßeveral yedß), Minßty ol Finance,Pldnnins and kfrommic Developnent; Smdll RuminLlnt Develop enr SIudy ReWn,\hnßtry of Agricuhure, Animal Industry dn.l Eßhenes, 1999.

Production systems and management practices are dictatcd by the degeeof dependence of the household on livcstock products for income,cultural values, food supply and crop agiculture practiced in association\'!ith livestock under traditional and non-traditional präctices. The bulk ofcattle and small ruminants are kept rmder traditional herding production

systems, while poultrt and pigs are largely left to fend for themselves onthe range.

The targeting of high potential areas as a basis for resoüce allocation, byboth Goverrunent and pdvate investors, has led to the rapid increase inoutput and the integration of the livestock sub-sector into the casheconomy, especially for dairy and beef related enterprises. Thele is agro$ing interest in cornmercial ranching for cattle and goafs. over28.1,000 hcctares of land that had been developed by Govemment andleased out to pdvate operators and about 150,000 hectares lhat had alsobeen dcveloped as GoveüIment ranches and breedrng farms are largelyunderstocked. Onlv 9% of the national cattle herd is held on ianches andfarms. contdbuting only 1l% of the slaughter animals as compared to 30%in the ea-rl' 1970's . If capital is mobilized, there are opporlunities forrestocking these ranches. Several Ugandan entrepreDerüs have laigetracts of land that could be developed into cornmercial ranches through

.ioint venlure capital.

Cattle Sheep vlgs

1 9 9 1 5 , 1 2 1 .1,950 820 t , 2 1 0 20.020

1992 5,209 j ,070 8.15 1 , 2 2 8 20,576

1993 5,370 t ,227 871 r ,266 2r.21.1

199! l 5,106 5 , 7 1 3 9; l 1,37.1 21,401

1 9 9 5 6,28.1 1,068 5 l t 2t.432

r 9 9 6 i.301 6 , 9 1 3 t , 1 7 5 1,663 22,050

1 9 9 / 5,160 i.60.t 1.2C2 i , 8 2 9 2 ? , 1 | 2

1998 5,175 8 . t 6 1 L ) 2 2 2.Ot2 23.6:18

1999 i ,957 t 201 t . 5 6 t 2.213 24_830

2000 10,121 t ,7?0 26,t;2

Ltgan la,J Lrrenock Indunry

Demand and supply projectionsConsumption of livestock products, both in absolute terms and on a percapita basis, is very low in Uganda (Table 2). Horvever, prospects forincieased demand, hence increased production, axe good as wr capitapurchasing power continues to increase. Household expenditure onuanimal products ranges between 20 - 30% of total expenditure and theprice elasticity of demand (% change in quantity demanded as aproportion of % change in price of commodity) for meat is very high.

Source: MPED (1991): Household Budget Suwey, 1989/90.

Based on population trends, reproductive rates and mortalities,approximately 12% of the cattle populatlon, 2,1% of the goat population,33% of the sheep population is slaughteied annually yielding over 100,000MT of meat and other edible parts (Table 3). The extraction rates could beincreased by over 50% without drastically affecting the livestock growthrates. The potential is even far much greater if production was to bedramatically transformed from the current subsistence levels tocotunercial productio

Table 3: Production estimates for milk and meaL 1992 - 2OO0

Present production does not satisfy the potential domestic market.Personal and household incomes as well as per c.rpit r consumption areincreasing. There is an export potential to some of the neighbouringcountries wheie endemic diseases hinder the keeping of improved beefand daty and cattle for meat and milk production.

Table 2: Per capita Consumption of Animal Products

Price Elasticity

l\lrlI (h) 3 1 . 5 2 2?.13 0_58

Bcef (ks) 9.0,1 0.05 LOI

Goar and NIu on tks) 0.83 0.85 t .0 l

Chickcn (ks) 1_89 1 . 7 6 0.62

Esas (lq) 1,8_72 7.3 i 0.50

lish (ks) 15.79 8.90 0.86

t992 1993 r995

5I0 .6 5,13.0 5 5 1 . 2 5 7 1 5 592 r 01.1.3 661.3 710.0

3 1 . 5 7 9 9 32.,1 35.0 a7.i 90.J 93.3 133.0

30.2 31.2 31.2 ' l l.4 45.5 50.0 55.0 60.5

12.9 13.3 I L 4 15.9 17.5 19.2 2 t . l 25 .6 20.6

14.3

12.7 t2 .9 13.6 I,1.6 15.3 18.1 1 9 9 2 L 5 180.2

Uganda\ Livenock Industry

InvestmentOpportunitiesinthelndustry

NOTAßLE INVESTMENTSBoth co\,emment and thc pdvate sector continuc to invcst hcavll) in lhcdc\,elopmenl of thc livcskxrk sectot. Governmcnt is currcntly investingunder the Dairy Development N{astcrplan, thc \ lcat ProductionNfastcrplan, the Small Ruminants DeveloDment Programmc, thcAgricultural Research and Traäng Project and thc National AgdculturalAd\.isory Seniccs SupIJort Programme. Privatc invcstmenls in processing(animal fccds, meat and milk proccssing, leather taininU) havc grcatl!increascd capaclty and an index of production above ij00 (national

average for all manufaclured items was 500) has bccn mainlaincd sincc1995. Thc major players arc listed in the section on major inveslors.

INVESTMENT OPPORTUNITIES

. vdccine Llevelopment, lesearch dnd produüionAnimal drugs and \ 'accincs take up the largest proport ion 1)1imllort c)ipcnditurc in the l ivestock industry. Currcntlt , lhcrcare no establishments producing such produ(ts in Llganda andthc rcgional markets. There is greal potcntial for vaccincsagainsl such animal diseases l ike Nelraastlc, East Coasl Fcvcr,Foot and \ louth disease.

. I'orage seed productionIhc major tropical paslure species currently under cornmercialproduction worldwide odginated from Uganda. The cxpansion ofthe dairy tndustry has created enormous demand for pasture secdintemall). Thc cxport market is unlimited.

U adnd d \ Live st o(k ln.lu st n

Animol feeds processing and dßtibutionInstalled commcrcial animal feed manufacturing compises 28 millopelators with an installed capacity of 28,060 NIT per annum.Several other small millers and hand mi\ers bring productioncapacity to about 148,000 MT. Actual utilization capaciry is very lowlargely because most operators lack adequate capital to pruchaseand store feed ingedients in bulk when prices are low. Demand forcoiutrercial poulüy feed is in the range of 32,000 MT yet productionin 1999 rvas for example oDly 17,,100 MT. Investment in this area islikely to furthei stimulate the poultry and piggery industdes,guaranteeing a stable market.

lntegrated beef production and feedlot finishingThe traditional pastoral and commural grazing areas where thebr k of slaughter cattle are raised are also areas that are haid hit bysevere droughts. Similarly, the main smallholder dairy farms arelocated further away from the main rüban markets of Kampala andJinja, with the attendant consequcnces of low pdces for thet milk.The purchase of illrrnatule stock from these traditional areas forreadng and finishing on ranches in better-endo\{ed tegions is aninvestment opportunity being promoted by Government under theN{eat Production ltfasterplan.

Inagine this scenario - Buy a youlg ciilf out of the Nlbarara/,Ifur.unojapastoral area and graze it on good pastüe around the LakeVictoria/il-ake Kioga basins. It wil gain {009 per day to teach 270kg in300 days. Fatten the ycarling in a feedlot to gain lkg per day for 130-150 days. You have a juicy slaughter animal of 400kg liveweight,yielding 220kg of carcass in 2 years and at a grear profit even at thecurent low meat pricesl

Sm all Rumi nant Produc tionThe indigenous goats and sheep of Uganda have good gtowth andieproductive performance. Crossing r\ilh introduced breeds canfwther enhance productivity. The Boer goat is aheady ä hot cake inLlgandal Investment opportunities exist in areas of muttipl],ingbreeder stock and export of live animals.

Moderh AbdttoirsThere is no single modem abattoir in Uganda. A grorving nurnbet ofUgandan consumers are i\illing to pay a premiun for qualit) meatproducts. N'lany supemarkets and eating-houses have specialized cutson offer on thet shelves and menus. Some of these are imported.Intemal trade relies on moving live animals over long distances toKampala, a practice that involves high costs and dsks. I\Iany localin\'estors are looking for joint venture capital to develop this area.

Animal breeding and süpply of stockThe Plan for l{odernization of Ag culture will rely on the provisionof improved breeding stock and breeding practices. Hatcherycapacity in the courtry has been nrn down and da).old chicks are in

8 Ulnnda s Livestock Inclu*ry

short supply. Govemment breeding farms have been phased outcreating a big vacuum in the provision of breeding stock toprospective famers. The national artificia_t insemüoation service isbeing privatized. What amazing opportulrities for an hvestor!

Wildlife ranching and farrningNational laws have been reviewed allowing for investment in rcaringwildlife. Already a few pdvate investors have ventured into ostrichand oocodile farrning. There is a growing game meat maiket.

Leqther procetsingUganda's hides and skins are e4rorted in raw form. They attract apremium price on the wodd matket because of their quality. Value-addition would guarantee any investor added income.

Uganda\ Lttestock Industry 9

UgandansCompetitive

Advantage

RESOURCE AVAILABIUTY. Nell distributed rainfall and tcmperaturcs moderated b) altitudc,

guarantec high ]'ields of forage dry mattcrl in cxcess oi 2,20f)

kg,/ha/annum, making Uganda ccologically lvell suitcd m ruminant

Iivestock production.

. Increasing trends notcd for thc production of major feed

ingrcdicnTs - cereals, grain legumes, oil sceds, fishmeal cnsurc

a continüed supply of local supply of feed.

. Large tracts of land lvith land tcnurc lalvs conducivc for pdvate

invcstment and devclopment. Only 20% of lhc grassland suitable for

beel production is currcntly under use. \fhat a capacity resenel

. Improved nation$ide research, training. arld extension prograrnmes

that sullport delelopment of cfficient livestock production systems-

. A lairly rehabilitated and improved marketing infraslructure and

er.panded sourcc of production crcdit.

MARKETS, DEMAND AND SUPPLY PROSPECTSDomestic consumption of livcstock products has continued to raise and 1\'lllcontinue as incomcs go up dur' kJ focused Govemmcnt inten'entions gealed

tor,,ards povety eradicatlon. The tourist ulduslry has erlanded trcncndously,briluing in a nc$' dielltele ol cllstomers often demanding prime quality auldsometimes uniquc products. Ihis continued e&ansion of the intcmal marketspells good prospccts lbr mediun tcfm gowth in the industry'.

10 I I g dnda \ Lircs tor k Indu s t 4

The neighbouring countries and others in the COMESA have limitedavailable land, unpredictable weather patterns and high population

growth rates. This offers opportunities for Uganda to penetrate thesemarkets. The re-establishment of the East African Comnunity has opened

a wider market foi Uganda. The Middle East and the AJab countries ofNorlh Africa are also a potentjal markel.

LINKAGES W]TH OTHER SECTORS IN THE ECONOMY. Crop production trends are positive and production is increasingJy

being linked to agro'processing. Tlus guarantees availability of

animal feed raw ingedients in form of law grain and processing byproducts.

. Processing of livestock products - meat, milk, leather - is in itself

a basis for investment.

. wildlife ranching and farming is likely to ensure participatory andpopular procedures for management of the numerous nature

reseNes that wolrld be associated with this kind of investment-

MAJOR INVESTORS TO-DATE

Meat Processing and exporto Luborva Invcstments Ltd, Seguku, Entcbbe Road

. Meat Process (U) Ltd, Gaba Road, Kampala

. Uganda N{eat Industries Ltd, 5 Old Portbell Road, Kampala

Leather manufacturing and dealers. Leather Industries (U) Ltd, Nyanza Road, Jinja

Dairy processing

. Counrry Taste (U) Ltd, 34/38 Fort Pottal Road, tr{barara

. Dairy Bell Ltd, Nlusozi Road, Fort Portal

. Dairy Corporation,.19/55 Fifth Street, Industrial Area, Kampala

o GBK Dairy Products (U) Ltd, 70180 Kabale Road, Nlbarara

o Jessa Dairy Farm, Bussunju, Hoima Road

. Paramount Dairies Ltd, Mbarara

. Ramilk Ltd, Nfbarara

. \{estcm HigNand Creamedes Ltd, Kabale Road, Mbarara

Animal feeds, day old chicks

. Bulemezi Farm Enterpdses l.td

. Eggbro Farmers Ltd

. Ugachick Poultry Breeders Ltd

. Uganda Feeds Ltd

Ll gandd\ Lire stock hdu sr4, t l

The neighboujing countries and others in the COMESA have limited

available land, unpredictable weather pattems and high population

growth rates. This offers oppo lrnities for Uganda to penetrate these

markets. The re'establishment of the East African CorruBunity has opened

a wider market for Uganda. The Middle East and the Arab coutdes of

North Africa are also a potential market.

UNKAGES WITH O'I}IER SECTORS IN THE ECONOMY. Crop production trends are positive and production is incaeasingly

being Iinked to aglo processing This guarantees availability of

animal feed raw ingredients in form of raw grain and processing by_

products.

. Processing of livestock products - meat, milk, leather - is in itself

a basis for investment.

. l{ildlife ranching and farming is likely to ensure participatory and

popular procedures for management of the numerous nature

reseNes that would be associated hith this kind of investment

MAJOR IN}'ESTORS TO.DATE

Meat Processing and export. Lubowa Investments Ltd, Segrrku, Entcbbe Road

. N{eat Process (U)Ltd, Gaba Road, Kampala

. Uganda Meat Industries Ltd, 5 Old Portbcll Road, Kampala

Leather manufactuling and dealers

. Leather Industries (U) Ltd, Nyanza Road, Jinjd

Dairy processing

. Country Taste (U) Ltd, 3'1138 Fort Portal Road, N{barara

. Dairy BelI Ltd, N{usozi Road, Fo Portal

. Da y Corporation, '19155 Fifth Street, Industrial Areä, Kampala

. cBK Dairy Products (U) Ltd, 70180 Kabale Road, tr{barara

. Jessa Dairy Fam, Bussrmju, Hoima Roacl

. Paramount Daides Ltd, N{barara

. Ramilk Ltd, trlbarara

. $estem Highland Creameries Ltd, Kabale Road' N{barara

Animal feeds, day old chicks

. Br emezi Farm Enterp sesLtd

. Eggbro Farmers Ltd

. Ugachick Poultry Breeders Ltd

. Uganda Feeds Ltd

0 E)nt1d\ LN! s t nck t n.lu \ t ry 1 t

Investing in

A selies ol brochures prorJuccd by the llgultdil In\eslrrlcnt Aulhorilytor the infbrmation ()l 'prospcctiYc invesbß.Each title in lhe scries dclls with a pürticuliu iuduslry providinr agenerll orelviov; dctailiug dcvelopmcnts: iLnd sllggcslilrg po(cntialinveslncnt opporluritics. Titlcs cunr-'ntlv available arc:

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UCANDA INVI S 'N, ' I I \ I AL I HORIT ,

43 Pu.xusins@@@@@@@@@@@@

l'loriculturc

!'0restry

l'ruits and Vegetables

Fish and Fish l'arming

Livestock

Mining

Clotton and Tcxtiles

Edible Oil

Foods and Beverages

Lealhcr

Dairy rnd Dairv Products

Electronics

Pharnraccuticals

NIetal and lVletal Products

lron and Stccl

Building and Constrüction

Enery)

storage

'l)'ansport and Communications

Financial Services

Flealth Care

'Iburism

Iiiducation Services