Chicken Industry

The rising tide of transformation

As much as “empowerment” and “transformation” are trigger words in South Africa, “collaboration” is a word that unlocks incredible power – and a concept that should get way more airtime. The story of a passionate young farmer with a keen sense of purpose, and the business growth that was unlocked when he met an industry leader who recognised his potential, paints a picture of what is possible in South Africa.

Clive Tigere and his mother, Dr Caroline Tigere, started KC Hatchery in 2016 in Louis Trichardt in Limpopo. Having left his high-flying corporate job in Gauteng, Tigere Jnr is mostly responsible for running the business, particularly in terms of marketing, business development, and customer interaction. Tigere Snr loves getting her hands dirty when the chicks hatch every Thursday night – a far cry from the sterile wards of the small private maternity hospital she runs with her husband in Louis Trichardt.

Having successfully set up the hatchery, Tigere was faced with an ongoing battle to source a consistent supply of high-quality eggs. “I was buying from a national supplier, but as a tiny fish in their big pond, they would not guarantee supply for me. When their large customers wanted more eggs, they would cut my order without blinking an eye.”

This was clearly no way to build a business. A chance meeting changed the situation, and KC Hatchery’s future, fundamentally.

In 2018, Tigere brushed shoulders with fair trade advocacy organisation FairPlay, and through them was invited to meet the CEO of Country Bird Holdings (CBH), Marthinus Stander. The two men immediately found a connection, and Tigere left Stander’s office with an offer of a secure and constant supply of eggs from the CBH layer farm near Lichtenburg in Northwest Province. The only condition was that he had to collect the eggs. The eight-hour weekly roundtrip did not faze him and was a small price to pay for a building a successful business.

“For CBH, the partnership with Clive opened the door to a customer base we would not usually be able to serve,” says Stander. “He presented a one-stop solution as a distributor.”

The partnership with CBH is working so well for both parties that a massive expansion for KC Hatchery is on the cards. From a current capacity of 28 000 day-old chicks per week, the new operation will deliver 52 000 chicks per week, hopefully by November this year. The expansion is being designed, however, for an eventual weekly capacity of 150 000.

The way in which different industry players are working together to realise this vision, illustrates the potential of empowerment to achieve true transformation.

The new hatchery, to be built on the Tigere farm outside Louis Trichardt, required an environmental impact assessment (EIA). Having paid half the bill, Tigere needed help with the final invoice, which arrived in tandem with the Covid-19 lockdown in April this year. “I sent SAPA [the South African Poultry Association] an email and asked for funding,” he says. “Before the end of that week the money, which came from SAPA’s transformation fund, was in my account. I was so excited! It was nice that SAPA had faith in me and my business.”

The email was not a cold call. Tigere has had dealings with the industry association before and had come to know the chairperson of its transformation committee, Willie Bosoga. In addition to business advice, Bosoga introduced Tigere to Limpopo broiler farmers who have since become valued customers of KC Hatchery.

The SAPA grant allowed Tigere to use the funds he had set aside for any Covid-19-induced emergencies to install three-phase electricity on the farm. The EIA was completed and submitted in May, and indications are that Tigere could receive the necessary approvals by September.

The final piece of the expansion puzzle is the off-take agreement with CBH that will allow Tigere to raise the funding he needs for construction and equipment. “Given the upheavals that 2020 has brought, the contract negotiations have taken longer than we all expected, but I’m hopeful that we’ll sign soon,” he says.

From CBH’s point of view, KC Hatchery is a link in the supply chain of a much bigger empowerment and transformation project the company is working on with the Limpopo Economic Development Agency (LEDA). The plan is that KC will eventually supply the broiler farmers linked to that project, in addition to his own customer base. The off-take agreement with CBH provides for a share buy-back arrangement that will see CBH exiting as a shareholder in the hatchery over five years, leaving Tigere with full ownership of his business.

Dealings with big business, however, is only half of Tigere’s plans for the future. He is also betting on the informal market.

In January 2020, Tigere opened a small shop in a rural area outside Louis Trichardt. His idea was to create an outlet for any overflow from the hatchery. However, he soon realised the extent of the demand for chicks and feed in remote areas and acted upon it.

The first shop proved its worth quickly and by July, Tigere had opened two more. Combined, the three shops sell about 2 500 chicks per week (9% to 10% of the hatchery’s output). The first shop currently sells more than 100 tonnes of feed per month and should hit the 300-tonne mark by October this year.

Tigere describes the communities where his outlets are as “fast-emerging commercial hubs” whose rapid development over the past two to three years is most visible in the many houses under construction and the emergence of small shopping centres. Live chickens are still a big market, hence many residents are also small-scale chicken farmers.

Running his shops and interacting with the customers has opened Tigere’s eyes to the informal sector. “The potential is just ridiculous,” he says. “I’m not even supplying 2% of the market currently; most people still travel 60km a week to buy chicks and feed in town. That has to change. I’m betting on the future with these shops.” Little wonder, then, that his business strategy allocates 70 000 of the new hatchery’s capacity of 150 000 chicks per week to the informal sector.

Big businesses in the area remain largely ignorant of the potential Tigere is seeing. He is, however, determined to spread the word, especially among those that gave him a chance when he started out. NB Feeds has been a Louis Trichardt institution for 17 years, but the family-owned business is struggling in the face of changing market conditions. “I want to help them like they helped me,” says Tigere. “I’m talking to them about the need to open depots in the rural areas, instead of expecting customers to keep coming to town. Times are changing and businesses have to adapt.”

Francois Baird, founder of FairPlay, says that the story of KC Hatchery shines a light on the tremendous potential for economic growth inherent in empowerment and transformation. “Clive Tigere brings true entrepreneurship, innovative thinking, passion and enthusiasm, business acumen and insight into non-traditional markets to the table. Relatively small actions to remove obstacles in his way – a guaranteed egg supply and EIA funding – contributed immensely to the success of his current business and paved the way to expansion.

The partnership with CBH benefits all involved and opens the door to a public-private partnership that will be an economic boost to rural Limpopo. This is a great example of the kind of transformation envisaged in the poultry industry masterplan.”