Chicken Industry

Co-ops and business creativity in the time of Covid

Covid-19 wreaked destruction on the economy, but it also created unexpected opportunities for people like Ellen Mokau – a chemical engineer who discovered a talent and passion for chicken farming and created an innovative empowerment model to boot.

When Covid-19 forced South Africa into lockdown in March this year, Ellen found herself at home with the luxury of time on her hands. Unlike many others who turned to baking or binge-watching, Ellen decided to learn about chicken farming.

“I’ve always been interested in poultry,” she says, “but there was never time to learn about it.” Ellen grew up with chickens in the backyard and her father, who is a salesperson of veterinary products, used to say that she would be good at agriculture. Having pursued a career in engineering, it took a global pandemic to return Ellen to that long-held interest.

She did an online course with a friend, watched loads of YouTube videos on the subject, joined social media groups and took the plunge. “I applied for payment holidays on my mortgage and other loans, and, in partnership with my uncle Piet Sithole, invested the money in 200 day-old chicks that I put into a tin house in my granny’s backyard in Pretoria.”

The experiment was a success: “It went well. I’m a big talker and can sell just about anything!” laughs Ellen. She knew this about herself, having run an online company, La Elle Creatives, that trades in a variety of products since 2017. These days, customers can also order chickens through La Elle’s website.

Buoyed by her success, Ellen embarked on a second cycle, this time with 500 chicks. But she knew that this was the limit to what she could do in Granny’s backyard. To grow the business she needed access to land.

In the meantime, Ellen’s social media prowess attracted a following of chicken farmers. “As I was posting, people asked me for advice,” she says. The entrepreneur spotted the opportunity and put an online course together. It was nothing fancy, just a few slides that answered people’s questions and set the scene for a Zoom session. But at R100 per person, she had unlocked a welcome way to put money in the bank. 

“As questions came out, I amended my presentation,” she says. The burning topics were sales and marketing, and how to start without land. 

Ellen quickly realised that she was not the only one tired of raising a few 100 chickens. Like her, many other farmers wanted to grow their businesses but couldn’t because they didn’t have land. 

The answer, she decided, lay in bringing people together in a model inspired by stokvels.

The concept is simple and sustainable: a group of farmers pool their resources to rent land, set up infrastructure, and get the necessary working capital together. In this cooperative structure, they all contribute equally and share equally in the profits. 

Ellen’s first co-op has 20 members. Each contributed R10 000 to establish the broiler business near Hammanskraal. In its first cycle, which started on 3 August, the co-op raised and sold 1 000 chickens. Its second batch will be ready for the market towards the end of October.

The second co-op followed a slightly different model with 31 members who each contributed R4 500 over a period of three months, and the land being rented from one of the members. On 6 October they placed their first 1 000 day-old chicks, which should be ready for selling by mid-November.  

Ellen acts as operations manager for the co-ops, taking care of governance matters such as putting procedures and policies in place, registering the businesses with the CIPC, obtaining accreditation for her training courses and, through her existing company, registering the co-ops for learnerships with the AgriSETA in future. She also wants to join the SA Poultry Association, both to “do things by the book” and to influence the industry she is now a part of. 

“Our strategy is to build a reputation and a track record, including financial records, so that we have everything we need to apply for public or private funding in future,” explains Ellen. The funding will be needed to realise her dream of raising 80 000 broilers per cycle on co-op farms across the country.

At the moment, the co-ops sell live chickens to households and to resellers in the townships, but their goal is to supply small businesses, such as shisanyamas and supermarkets. This, however, introduces new complexities. Chief among these are securing slaughter time with registered abattoirs, adhering to commercial food safety requirements, and delivering broilers that meet the exacting standards of the catering industry.

Fortunately these are the type of challenges on which Ellen thrives. “We are on a learning curve, and it is exciting. I learn new things every day and business opportunities unfold all the time.”

Ellen is very clear about sharing resources to benefit as many people as possible. The many small-scale farmers she has met online and through her training courses, are already blossoming into the country-wide network Ellen foresees. When customers contact her through social media, she puts them into contact with a farmer close to them. “I assure people they will get the same quality chickens from people in our network because we all follow the same process.” The networked farmers can also order feed and vaccines through the co-ops, thus benefitting from bulk buying’s lower prices. “Collectively we can knock on all the doors we need to,” says Ellen.

Ellen is aware of the threat of cheap imports, but believes that taste and quality drive demand for locally produced chicken. Equally, she is aware of but not fazed by local competition: “I believe in being visible and the power of social media, and being reliable in these times when too many suppliers don’t keep the promises they make to customers.”