Detailed analysis of various business sectors in Uganda

Is investing in Pig farming haraam or really a hidden pearl?

Outside Looking In
D E Wasake

About the writer:

For over 8 years I have worked with several clients in Uganda, The Bahamas and the United Kingdom in providing audit, tax, accounting and advisory services. My sector experience with clients in various sectors including agriculture enables me have good understanding of this sector. To see the full depth of my experience, Please see my profile

Article Summary

In this article, we estimate that pig farming with a low start up capital of Shs. 7.8m can give a a net profit of about Shs. 2.7m and you can get back your initial capital (Return on Investment) in about 2.9 years.

To achieve these forecasts, we have a few "advanced thinking tips". As pigs eat huge quantities and maize feed prices continue increasing, we instead recommend that in order to achieve this profitability, you provide them with "swill" (leftover food) by entering into a "food partnership" with the many boarding schools around Uganda. We in addition recommend selling the pork rather than the live pigs. The profitability is almost 100% higher.

In considering this business for investment, one must be conscious of religious sensitivities particularly as about 12% of Uganda's 35m population(July 2012 estimate per CIA factbook) is Muslim. This is about 4.3m people and thus fairly significant as it would almost be Haraam (loosely means taboo or “forbidden” in Arabic) to start this business in a neighbourhood which has sizeable Muslim population, say like Mbale – my home town.

Whilst on the religious subject, it is worth remembering that Matthew 7: 6 says; “do not throw your pearls to pigs. If you do, they may trample them under their feet, and then turn and tear you to pieces.”

I have recently invested in a 50/50 joint venture with a family friend to start a piggery unit in Mbale(don't worry it is located in a hard core Christian/traditionalist area). I provided the start up working capital and he provided the land and housing. I am still unsure whether I have thrown my pearls (i.e money) away as it has been over 1 month and still no signs of the project by way of photos or progress reports, his phone has been off.

It reminds me of another farmer friend who I recently spoke to. Someone broke into her farm in Jinja and run off with 3 adult pigs, squealing and all I imagine. Her security guard told her that he was drunk and thus didn't hear anything. I believe they were stolen in connivance with him. First a grown pig can weigh about 120kg and secondly they can squeal so loud, at 130 db on average, that is considered higher than the highest safe level for hearing (120 db). Other sources compare a frightened pig's squeal to the sound level of a jet taking off i.e 113 db. Either way, that's pretty loud.

So now we have established a few ground rules about investing in this business:

1. Be considerate of religious sensitivities; and;

2. Choose business partners(or employees) wisely lest you literally throw your pearls(money, resources, time) to pigs who trample on them (squealing included) and turn onto you (asking for more money or in Ugandan speak seek“forgiveness my boss/chief/Lord” when they showed no mercy for stealing your invested funds).

10 Quick facts to know so as to put investing in pig farming into perspective

1. Pigs have no sweat glands and so to cool themselves they need to wallow in the mud or have loads of water. They are therefore generally clean animals and “play” in the mud out of necessity. It is important to therefore have a “wallowing hole” to allow them have a “mud bath”.

2. Pigs will eat anything as they are omnivorous(eat both plants and animals) but they primarily eat maize meal/corn, potatoes and meat/fish products. The pigs feeding varies over their period but on average is as below:

Stage/Age in days Age in months Weight of pig(kg) Kgs/grams per day of feed
Before weaning: 0-35 days 1 1.5-9kg 50-250g
After weaning: 35-56 days 1.87 9-20kg 800g
Growing pig: 56-110 days 3.67 20-50kg 1.9kg
Pigs being finished
/becoming mature:
110-160 days
5.30 50-90kg 3kg
Fully mature sows ready
to give birth
8 months on wards 140-200kg 4kg

Source: http://www.elsenburg.com/info/els/039/039e.html

3. A female pig(a sow) can give birth to on average 8-12 piglets(litter). This of course depends on the breed. Common pure breeds particularly in Uganda are the landrace and the large white. A mixed breed called the Cambrough is also available. Some sources say these can give birth to 23 piglets each time. Other sources say the average is 15 piglets. In both cases, this is a fairly big litter size compared to local breeds.

4. The maturity period for a pig is 5 months and the gestation(pregnancy) period is 3 months. It therefore means in a 12 month period, a newly born piglet will mature in 5 months(weaned from the mother after 35 days), be ready to give birth after 3 months, have a 3 month pregnancy period and give birth in 3 months. In 1 year therefore you will have about 8-12 piglets per sow(or say 15 if going for the Cambrough breed).

5. 50% of all deaths occur before weaning. The design of the farrowing pen must be such that the sow will not be able to lie down on the piglets. The farrowing pen must be disinfected thoroughly before the sow is placed in it. It may be necessary to design a farrowing crate for this purpose. For more details on this, see http://www.pigfarminginnz.co.nz/the-big-questions#m

6. A thorough disease prevention programme must be in place in conjunction with an experienced vet officer as pigs are susceptible to many diseases. This includes the deadly African swine fever for which they should typically vaccinate at the age of 2-4 weeks. In addition there should be strict restrictions on visitors to the farm as these can bring diseases.

7. During early pregnancy a sow can behave aggressively and therefore it is common to have sow stalls for individual sows to ensure they are not injured during fights which are common during this period.

8. Pig droppings are a good source of manure for fertilising soils especially if growing crops. They can also be used for fish farms/ponds. You should therefore consider making money from these.

9. Pig farming like any livestock farming needs to fit with your personality or nature. Can you for example wrestle a fully grown sow in labour? I found an interesting article analysing the day to day aspects of pig farming that should influence your decision to go into pig livestock.

10. Fun/other facts

  1. heart valves from pigs are used to replace damaged or diseased human heart valves

  2. swine research led to the development of the CAT scan, a technology for examining internal organs without surgery

  3. Pigs have a very wide angle of vision – 310 degrees – and are therefore easily distracted

  4. pork is the most popular meat in the world(at least in Uganda) – Ugandan girl's don't just love chips and chicken – they love Pork! Remember when you needed to impress a girl, all you needed to do was take her to Yakobo's , Zanzi or Rhino?

[P.S This last statement is “tongue in cheek” and should be taken as such]

Other sources for more information to interest you in pig farming:

http://nabard.org/modelbankprojects/animal_piggery.asp
http://projecttz.com/?p=734
http://www.pigfarminginnz.co.nz/

And with that in mind, so then are you ready to roll up your sleeves, get dirty with mud and find out if it is worthwhile investing in piggery?

FIRST THE CONS (of course)

1.Feeding

Pigs eat enormous quantities. A fully mature pig especially one to rear for commercial purposes will eat about 3.4kg a day. A growing one eats on average 2.02 kg. If you are buying feed, mainly maize meal then the cost will be significant especially considering rising maize prices in Uganda. You have two options, Option 1 is grow your own food I.e maize and vegetables to feed them and supplement this with protein(say fish or soy meal).

In my financial model later on, I advocate Option 2 which is that before establishing the piggery you ensure you are located near a major boarding school or a hotel/restaurants so that you can pay for the left over meals(like Posho and beans) to feed to your pigs, you then supplement this with leftover protein say from restaurants. Pigs are after all omnivorous and will literally eat anything(don't however feed them rotting food).

2. Cash flow/Working capital

Like most agriculture related activities, particularly in Uganda you need to have cash on hand and particularly for at least 11 months before you start earning, this is especially as there are no advanced credit card facilities.If for example the animals became sick and you needed to buy drugs immediately(or risk losing the entire stock), do you have access to funds? This is a key consideration. In my model I show that part of your start up investment has a working capital budget for 11 months.

3. Diseases

Pigs are susceptible to several diseases and it is not uncommon for there to be quarantine following disease outbreaks like the deadly African Swine Fever. It is therefore critical that as part of the research you establish an arrangement with a Veterinary officer who will be available for scheduled immunisation.

Likewise you need to ensure that there is a good waste management system to clean out their pens and feeding areas especially as their population increases- and it does rapidly! It is therefore critical to have loads of water. In my model later on I advocate that you locate the land near an easy water source such as say a swamp or that you install a water tank to harvest rain.

AND NOW THE PROS

1. Less intensive management.

As long as you invest in good pig housing that for example properly segregates lactating sows, has separate feeding and and sleeping areas the like then with a little land you can easily manage pig farming with few staff and less intensively. In my model, with only 2 staff living in a rural area(where labour costs are not too high) but appropriately trained(piggery courses are not too expensive) then it should be easy to manage.

2. Profitability owing to demand.

A lot of sources believe pig farming is one of the most profitable ventures in animal farming particularly as they require less intensive management compared say to poultry or dairy farming. The profitability is however primarily driven by the huge demand for pork in Uganda.

As per a Uganda Bureau of Statistics Livestock census in 2008 there were 3,184,310 pigs. Assuming growth rates since then on the basis of the economy growth (real GDP) which was about 7.2% in 2009, 5.20% in 2010 and 6.4% in 2011(all CIA world factbook estimates) then the pig population is estimated at 4,340,663 at 2012. This is still a very small number especially when compared say to chicken which were over 37m in 2008 and therefore estimated (on same basis) to be 44m in 2012.

I can therefore expect that there will be a continued demand for pork and over time other related industries will develop for pork products such as sausages, bacon, gammon and the like particularly as income levels increase(driven by economic growth).

In my model, I advocate that the pig farmer control the sale of his pigs through selling to the retailer on a per kg basis rather than selling the live pig. A fully grown pig can be sold for say Shs. 400,000. At April 2012, a Kg of pork costs about Shs. 8,000 on the retail market.(as per UBOS statistics). A fully grown pig weighs about 120kg and a pig carcass is about 105kg so 105kg at Shs. 8000 per kg gives Shs. 840,000. If you sell a live pig to the retailer, he is therefore making a 100% profit in paying you only 400k compared to controlling the slaughter and selling per kg.

In my model, I estimate the profitability over a 14 month period which is split as below:

Month 1-5: The parent stock(exotic) is purchased as piglets and are growing

Months 6-11. The parent stock are mature and ready to give birth in month 8. The gestation period(pregnancy) is 3 months and therefore give birth to their first litter(piglets) in month 11. Sales of some parent stock and some piglets take place for the first time in this period(called season 1) so as to provide some working capital.

Month 12-14. The parent stock give birth to their second litter. Their first litter is now 3 months old. Sales of some piglets from season 1 and now season 2 take place to provide some working capital.

The model is below:

Start up, revenue and profit of investing in piggery

P.S Clicking the above link will take you to the Inachee Databank where the full version of this document can be dowloaded after you register.

It is worth noting that as many Ugandans own land, start up costs(like in my case as narrated at the start) could be even lower. In the model I have assumed land purchase owing to the need to be located critically near a boarding school/restaurants as well as near a water source.

Summarising and final word

First the numbers:

On the basis of my model analysis, I summarise the profitability of investing in piggery.

Return on Capital for pig farming(piggery)

→Start-up Capital(including working capital for 11 months) (A): Shs. 7,738,248

→Profit per year* (B): 2,681,086

→Return on Investment/Capital (years to get capital back) (A/(B)*: 2.886 years.

*The profit is being calculated over a 14 month period comprising of season 1 and season 2.

It should therefore be noted that the original investment/start up capital will continue to be recovered in seasons 3 onwards as the piglets from season 1 and season 2 mature.

Now the basics you must get right before investing.

Location. It is critical that you are located near a boarding school and water source. Near a school is primarily for obtaining cheap feed(“swill”) but they could as well be a market for the pork.

Feeding. Establish how you will obtain “swill” cheaply/cost effectively. Pigs eat a lot.

Housing. Ensure you contact a person with experience to construct the right housing/pen that is properly ventilated and segregated. Bear in mind that the construction should enable the pigs to have enough space especially to support the farm's expansion as pigs reproduce very quickly and in a space of say 14 months, from just 5 parent stock(including sales) you will have 21 left.

Veterinary officer. Pigs are susceptible to several diseases and so in addition to proper waste management considered as part of the housing construction, ensure that you enter into a formal arrangement with a veterinary officer on speed dial to immunise the pigs regularly. Of course you also need the vet for other aspects like at birth, injury and the like.

Proper record keeping. It is advisable that you tag/brand each piglet to identify say parent stock, season 1 and season 2 onwards as this allows you to determine their performance in aspects like breeding, feeding, disease susceptibility and the like. You will see from the financial model above that you need to maintain elaborate records on which pigs are sold and which are maintained as without this information you will easily be trampled upon by the pigs(in this case I mean thieving employees)!

FINAL WORD

It would be sacrilegious(or Haraam?) for me to mention pigs without referencing them to George Orwell's classic “Animal farm”. In it Napoleon and the other pigs are the main protagonists and alas the other animals on the farm realised the hard way that “some animals are more equal to others”, the poor animals in leaving management to Napoleon and cohorts did not put in place oversight mechanisms and thus the biblical admonishment ran true – don't throw your pearls to pigs.

My little dabble into literature is only emphasising a point, appropriate management(staff with proper training and ethics) is key in this business. If you do choose to go into it, it will be a real pearl. In addition, plan for it properly to manage the quick surge in population and control the process of final sale to the retailer.

Otherwise, best of luck and of course if you need some help, do not hesitate to speak to us to get the ball rolling, Inachee after all represents Home Grown Energy in Motion.

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And now the disclaimer:

While I have taken steps to research this information as well as based on my experience, you should not solely rely on the information given here to base your investment decisions. You should seek business advice from a professional knowledgeable of your specific circumstances. I shall therefore not be held responsible for any loss you may incur when acting on this information.

4 thoughts on “Is investing in Pig farming haraam or really a hidden pearl?

  1. I have found this article very interesting and helpful at the sametime worthy following.  I am already in the system of piggery farming with a batch of about 60. This is my second year in this kind of farming. I also keep goats- 30 and have 8 cows. As interesting as it is to keep pigs, there is a problem of getting a ready market for the animals!  You put in a lot and by the end of the day you are cheated.  Please advise me on the ugandan market. The small farm is 26 miles on Mityana Road-/District Parish NAmungo -village Ndyabuto. I am a resident within Kampala- Rubaga. I really love to keep updated because I am very new in this field.   

  2. Dear Sir/Madam,

     

    Ineed more info on the this project/concept. Can someone undertake such a project on a lower budget?

  3. thank you, for taking us through the un known facts.may you kindly draft for me a prosal for 16,000,000(sixteen million),so that i use it to request ror grants.than

    k you

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