Norfund invests $18m in Irvine’s Group to boost poultry farming across East Africa

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Norfund, Norway’s state-owned development finance institution, has signed a USD 18 million (about KSh 2.3 billion) financing deal with poultry producer Irvine’s Group to expand chicken and feed production in Kenya, Tanzania, Botswana and Mozambique. The agreement was announced in Nairobi on September 18, 2024, and will pay for a new grandparent breeding farm and feed mill in Tanzania and a new hatchery in Kenya.

The money goes into Buchan Limited, the holding company for Irvine’s operations in the four countries, according to a joint statement reported by the Kenya News Agency. Irvine’s is already one of the main breeders and suppliers of broiler day-old chicks and poultry feed in sub-Saharan Africa, and the company says it has more than 60 years of experience in the industry.

What the USD 18 million will pay for

The grandparent farm will be set up with Cobb, the global poultry breeding company that has long supplied Irvine’s. A grandparent farm produces the parent birds that in turn lay the eggs that hatch into broiler chicks. Having one in the region means fewer imported parent stock, shorter lead times and lower costs, which Irvine’s says will make its chicks more competitive and its supply more reliable across Africa.

Norfund estimates the expansion will create about 200 direct jobs, on top of extra income for farmers who supply grain to the new feed mill.

Why smallholder farmers matter in the deal

Irvine’s sells day-old chicks and feed mainly to small-scale farmers. According to Norfund, smallholders account for about 70 percent of chicken production in the African markets where Irvine’s operates, and about 70 percent of the farmers the company trains and supports are women. Irvine’s also gives these farmers technical help on rearing, feeding and disease control.

“By scaling production capacity and strengthening the local supply chains, Norfund’s investment will improve their capability to serve more smallholder farmers and create new jobs for East Africa’s fast-growing youth population,” said William Nyaoke, Norfund’s Regional Director for East Africa.

Nyaoke said the partnership would add to Irvine’s total offering through more feed and chick production, more technical assistance and wider distribution. He also said Irvine’s will buy more maize and soybeans from local farmers, which supports regional grain value chains.

What the company and Norway said

Irvine’s Group CEO Craig Irvine said the funds “will fuel the next chapter of our growth” and would improve the company’s ability to supply and service its growers so that “nutritious protein reaches every market we serve”.

Norway’s Minister for International Development, Anne Beate Tvinnereim, said in Norfund’s statement that poultry production “is an effective contribution to increased food security while providing income that contributes to alleviating poverty”, adding that investment in agriculture and local food supply chains is crucial for food security and self-sufficiency.

The signing in Nairobi was attended by Norwegian Ambassador Gunnar Andreas Holm, Norfund Vice President Andreas Davidsen and Irvine’s board members David Irvine and Donnie Smith, according to Food Business Middle East and Africa. Africa Insight Advisors, a Tanzania and Kenya-based advisory firm, originated the deal and acted as financial adviser, Africa Private Equity News reported.

Kenya’s poultry market

Chicken and eggs are one of the most affordable sources of animal protein in Kenya, and demand keeps rising with population growth and urbanisation. Figures from the Food and Agriculture Organization cited in coverage of the deal put the number of birds slaughtered in Kenya each year at about 50 million, with 92.6 percent of the population eating chicken regularly.

Kenyan broiler farmers have long complained about the cost and supply of day-old chicks and feed, which together make up most of the cost of raising a flock. Imported parent stock and imported feed ingredients expose hatcheries to exchange rate swings and shipping delays. A regional grandparent farm and a larger Kenyan hatchery are meant to ease part of that pressure, although the effect on prices paid by farmers will depend on how quickly the new facilities come on line.

Who Norfund is

Norfund was set up by the Norwegian parliament (the Storting) to invest in private businesses in developing countries, with a focus on job creation. It has a regional office in Nairobi that covers East Africa and has backed companies in renewable energy, financial services and agribusiness.

For more on Kenya’s farming businesses, read our guide to KALRO branches, which covers the research centres that work on poultry and livestock, and our list of fertilizer companies in Kenya. Looking for work in agribusiness? Browse current openings on JobinKenya.

Frequently asked questions

How much did Norfund invest in Irvine’s?

Norfund committed USD 18 million to Irvine’s Group through its holding company, Buchan Limited.

Which countries does the investment cover?

Kenya, Tanzania, Botswana and Mozambique, with the new facilities in Tanzania and Kenya.

What will be built in Kenya?

A new hatchery to increase the supply of broiler day-old chicks.

How many jobs will it create?

Norfund estimates about 200 direct jobs, plus extra income for farmers who supply grain.