Reflections from a meeting with Ayo Alade, Managing Director and D.r David G. Otaigbe, General Manager of Dayntee Farms, Kwara, Nigeria
We met up with Ayo Alade in the lobby of our hotel in Ilorin, Nigeria. He was a younger guy, sporting a beard, wearing jeans and sneakers, and very matter-of-fact. We were instructed to have our driver follow him back to the farm off the main road in Ajase Ipo about 20 kilometers from our hotel. As we turned onto the long dirt road leading to the farm, and pulled up to the white metal gates at the entrance, a security guard made sure our car tires were pressure washed and then after the gates opened and we pulled alongside the security guard house, the car was also subject to a mini-car wash. There were side spraying hoses and spray gear with a soap cleanser hanging over the gate area that sprayed mist all over the top and sides of the car. I was very impressed by their serious commitment to biosecurity! After we signed in and were hosed off, we followed Mr. Alade to his office for my line of questioning about the operation and its challenges.
Ayo Alade, Owner of Dayntee Farms
Dayntee Farms is a poultry hatchery business first and foremost (they also own and operate a very large rice mill next door, but we didn’t really see or discuss that operation on this visit). They raise breeder stock for both laying hen “day old chicks” and they raise breeding stock for broilers (meat chickens) also for day-old chicks. They are a business that is poised to continue to scale. They aim to raise 200,000 day-old chicks per week. They currently house 70,000 breeders (both layers and broilers) and they are expanding their capacity to house up to 160,000 breeders over the next 3-5 years via a recent equity investor partnership with Sahel Capital. This is the “other” part of a poultry operation that is extremely critical in the supply chain for table eggs and poultry meat. For our farm, Pete and Jen’s Backyard Birds, we rely heavily on the hatchery operations in Pennsylvania to source our meat bird chicks (that arrive as day-old balls of fluff through the Postal Service) to grow out for our meat chickens. We also rely on other hatcheries and growers to source our 16-week old “started pullets” or here in Nigeria they are called “point of lay” birds – meaning that these hens are hatched and raised until they are almost “ready to lay eggs” so the producer doesn’t have to rear the birds for four months until they start producing. You can buy the hens almost mature and hasten the process of starting your laying flock.
The employee “bus” which transports their workers to the poultry farm.
Each day, Dayntee Farms picks up their poultry workers from various pickup locations around the area and brings them to the farm to work. There are almost 400 people who work for the company in various roles. Some staff are housed on site in employee housing (managers, and other critical employees) and all staff have access to employee “quarters” where they can keep their belongings and change into their work uniforms which are large blue jumpers (or coveralls) with no pockets (to deter theft) and showers are provided for after work hours for folks to change and freshen up before getting back on the bus and heading home. As we drove from the office to the hatchery portion of the operation, we passed large fields of maize and other common food crops that Mr. Ayo allows the workers to cultivate for their home consumption. He said the 24-hour security detail appreciates being able to produce some of their own food for their families, “it helps keep them more committed to the farm,” he said.
It turns out that Mr. Ayo Alade didn’t necessarily intend to become a poultry farmer. He was a trained geologist who ended up working in Australia. His father wanted to start a farm business and bought the land. They had a family friend who owned a poultry operation and he became their mentor and who opened his books and showed them it was profitable and started consulting with them on how to get started. Of course, that was also “designed” by their friend, since the friend also initially sold them their breeding stock and benefited from the collaboration. Unfortunately, early in the process, Ayo’s father passed away in 2011 and then by that point, they were already pretty far along in developing the business, so Ayo felt he had to keep going. And the fact that he kept going at all given the stories he had to tell about their first several years of farm startup (losing up to 60% of their birds one year from a blood disease due to poor genetics and inferior quality sourced from another farm), was a testament to his dedication and grit. Ayo named the operation “Dayntee” Farms as a play on the word “dainty” meaning “precious” or “cute,” he said, which maybe makes sense when you think of a cute fluffy chick, but it was funny to me given how serious he was throughout our conversation and farm tour.
Dayntee Farms raises two breeds of birds to produce their egg laying chicks: the Isa Brown layer and the Bovans Nera (black feathers). For broiler breeders, they use genetics from Hubbard. As a side enterprise, they also sell commercial table eggs from the chickens they raise, but at the time of our visit, the market for table eggs was slightly saturated and wholesale buying was low (thus prices were low) and they were getting ready to transition a few of their older laying houses into expanded layer and broiler breeder facilities and will likely downsize their commercial table egg production in favor of more breeding stock and broiler production. They sell their “spent hens” to the open market as well. They are also planning to expand into broiler production (both breeding and for finishing/grow out) and build a poultry processing (slaughter) facility to process, freeze, and distribute domestically produced poultry meat.
Dayntee Farms raises two breeds of birds to produce their egg laying chicks: the Isa Brown layer and the Bovans Nera (black feathers). For broiler breeders, they use genetics from Hubbard. As a side enterprise, they also sell commercial table eggs from the chickens they raise, but at the time of our visit, the market for table eggs was slightly saturated and wholesale buying was low (thus prices were low) and they were getting ready to transition a few of their older laying houses into expanded layer and broiler breeder facilities and will likely downsize their commercial table egg production in favor of more breeding stock and broiler production. They sell their “spent hens” to the open market as well. They are also planning to expand into broiler production (both breeding and for finishing/grow out) and build a poultry processing (slaughter) facility to process, freeze, and distribute domestically produced poultry meat.
After the eggs have been stored and they have enough eggs, the next phase of the process is to gradually bring the eggs back up to room temperature and then the eggs are fumigated for approximately 15-20 minutes to kill any pathogens or bacteria that could contaminate the eggs while they are in the incubator over the next 18 days. They use a chemical fumigant in a large room with a single exhaust fan, and though it was supposed to be a pretty air-tight room, there was certainly plenty of room for the gas to escape. I suggested they might want to put some plastic sheeting over the gaps in the wooden doorways so workers who were outside passing by in the hall not wearing protective gear wouldn’t be inhaling the fumigants. Then then the eggs are transferred to one of the four incubation chambers (the company will be doubling in size soon and adding another 4 incubation chambers). There are six rows of eggs in each incubator (which can hold up to 57,600 egg per chamber!) and they are kept at 99.5 degrees Farenheit with a relative humidity of 85%. The trays rotate at a 45 degree angle at least twice a day to keep the air sac on top, and the location of the roller trays are rotated every few days to move the older eggs closer to the ventilation fans and heat source (the older eggs are warmer (due to the larger embryo growth inside)and the fans can then blow the warmer air toward the younger eggs to keep the temperatures constant) to ensure even growth and temperature. The incubators are set to automatic controls, but the workers also keep tabs on the manual thermometers to double check that the settings are accurate. After the 18 days, the eggs are transferred to the hatching chambers.
The goal is to have at least 90% growth in the eggs, otherwise that signifies some kind of problem that needs to be addressed. Eggs coming out of the incubators are candled in the trays and any eggs that have light shining through them mean that the embryo didn’t grow, so they are removed and either tossed or sold. Then the eggs are removed from trays and put into white plastic hatching crates and moved into the hatching chambers that are kept at 90.5 degrees Farenheit. At that stage, the eggs generate their own heat and the goal of the incubation chambers is to keep them well ventilated and the environment is slightly higher in humidity and moisture content. Between 18-21 days, the chicks start to hatch! They have to watch them very closely to make sure that the chicks break their air sacs, that their wings are nicely formed and that the navel closures heal within the hatch period. Once they are hatched, the birds are taken to to the vaccination hall and they receive a subcutaneous injection of a vaccination against Marek’s disease and eye drops which prevent against Newcastle disease. The chicks are then either color or feather sexed (male / female) or vent sexed and sorted. For sexing of chicks, color sexing is apparently 99% accurate and for broilers, feather sexing usually works very well – males have 1 layer of feathers and females have two layers and the female feathers are longer. The hatchery includes 2% additional birds with each order free of charge in case of any casualties during shipment. Then, after vaccination, the birds are sorted and put into the ventilated shipping boxes and sent out to various customers or producer pick up at the hatchery – outside the white gates to avoid biosecurity risks. Most chicks can survive up to 48 hours after hatching before they need supplemental food and water.
After we visited the hatchery, we returned to Ayo’s office. It was his first day to meet with their new investment partner, Niyi Oladejo, from Sahel Capital. The equity investment firm had recently made the public announcement of the investment fun after at least 15 months of due diligence with the company. One of the biggest challenges that Ayo was facing was how to grow and scale the operation with limited access to capital. They regularly had more orders for high quality hatching chicks than they could produce and they wanted to expand their own operations, so they were finally taking on an equity investor for the next 3-5 years and Mr. Oladejo was there as part of the new operations team. Sahel Capital‘s role in the business is to support and define all of the operational systems of the enterprise to enable Dayntee Farms to meet its financial obligations and commitments to the shareholders of the investment firm. One of they key drivers of this type of investment capital is also a serious commitment to environmental and social governance. Part of the growth goals include providing jobs to the local community and supporting other small-holder farmers in the region, so the expanded broiler production operation will also include an out-grower scheme and the new processing plan with provide jobs to women. The five-year plan will focus on the build out of business operations, addition of the processing component, and expansion of overall production – quite ambitious! At the end of the five-year term, Ayo will have the option to buy back the equity or he could continue to open up the company to other international investors.
Surely there are challenges in any business, and here at Danytee, this was no excpetion. The first response about their major challenge was access to working capital. This is the key constraint I continue to hear throughout my visits to farmers and agribusinesses in Nigeria. He also mentioned securing the right expertise has been a challenge, as well as getting their products to the right people given the transportation situation throughout the country (poor road networks). Production has not been much of a challenge for them (aside from the rough start), but marketing and transportation are other big challenges. Unfortunately, the consumer market really doesn’t pay a premium for quality table eggs, since producers can often tweak the color of the yolks artificially (consumers prefer golden yellow yolks, yet anyone can apparently add colorants to the feed and it enhances the yolk color!). Ayo said that they are building their reputation and brand as being a reputable company for quality day-old chicks which is the growth area of their enterprise. Other business challenges centered around the infrastructure challenges: roads, needing to generate their own electricity, installing their own wells for water, and needing to import everything (all the plastic crates and inputs – cages, waterers, feeders, processing equipment, all comes from India!). Despite the challenges, the goal is for the business to grow 5-fold in the next five years! They are planning to double production every two years and the goal for the processing plant is to process 2,000 birds per hour! They will keep the same laying flock breeders and introduce the out-grower broiler scheme to increase overall broiler production.
Might there be other ways they could “add value” to the operation? Apparently, focusing on the day-old chicks is more value than simply producing table eggs, and unfortunately, there is little premium placed on selling “fresh chicken” in the local market since most of the wholesale markets prefer frozen chicken. Dayntee Farms also plans to have their own label and “brand” to market the birds. Most of the larger customers (hotels chains, retail, etc.) want the frozen whole birds and currently, 75-80% of their expected market for broiler chickens is the supermarkets, hotels, and eateries. I guess the “frozen market” makes sense given the frequency of power outages, buyers are safer investing in larger volumes of frozen product rather than trying to keep fresh-killed meat at safe temperatures. Dayntee Farms is also looking into opportunities to export the frozen poultry meat given the increasing demand for poultry in other regions.
When I inquired about the keys to their current success, basically his first response was “sheer tenacity.” He said when “everything is against you and you are in too deep, you can’t give up and you have to come back with an attitude of survival and re-strategize to survive, blow after blow.” That rings true from so many of the other agri-preneurs we met. Other strategies to Ayo’s sanity in the face of so many challenges include networking with other local businesses and friends in the industry who understand the realities and unique conditions of doing business in Nigeria. He does attend poultry shows and international expos and tries to learn all he can about new technology that could be adapted in his operation. When asking Mr. Oladejo, the new operations partner for Dayntee Farms what he was looking forward to about the partnership, he said he likes to get involved in the early stages of the design for business expansion. They will be building out the broader frameworks for expansion (developing the out-grower production model, the broiler processing scheme, expanding markets), etc. and working on other systems of business operations and compliance. His role will mostly be to conduct monitoring visits and to add value and pull in the support and expertise needed to help the company get to the next scale by building the systems needed to grow and expand.
Given that part of my mission is to sleuth out next generation farmer issues, I asked about Ayo’s succession plan for the operation, considering that he
was so young, and he quickly said that he doesn’t want to “die with the business” or to be a slave to the business or for it to be dependent solely on him. He said you see a lot of abandoned businesses in Nigeria, particularly when the owner dies or the investors pull out. He wants to bring in more investment and partners to take it to the next level and build the appropriate infrastructure so that he is replaceable someday. He has some of the same managers today as he brought on since inception, so he hopes to continue to build internal leadership and capacity. We met one of his newer leaders, his new General Manager (a first for the company, since Ayo was “doing it all” before then), Dr. David Otaigbe. Dr. Otaigbe is a trained poultry veterinarian who has been in the industry for over 26 years. Clearly, Ayo was in good hands, as were we when we continued on our tour of the rest of the facility!
We started with the feed mill: you always work from least bio-secure to most bio-secure in a poultry facility so you don’t bring or transmit any potential diseases to or between the flocks. One of the challenges in the poultry business in Nigeria is the cost of feed – it’s expensive, so most producers mill their own. Dayntee Farms produces all their own poultry feed except for their commercial layer flock that gets a commercially-purchased higher protein ration. We got to see the *manual* unloading of some of their feedstocks (maize) that they buy in to process at the on-site poultry feed mill. They use approximately 16 different micro- and macro- nutrients plus the major feed ingredients (maize, soy) and they have capacity to make either 1-ton, 5-ton, or 8-ton batches depending on the machine they use for the mixing and blending. They generally keep feed in storage for less than a week, so the feed they are providing the breeders is ultra fresh. They are constantly weighing the costs versus benefits of the cost of the feed inputs versus buying in pre-blended commercial feed, but if they make it themselves, they are assured of the quality and they do send out their own feed for analysis at a feed lab at least every few weeks to be sure that their blend is providing the most important nutrients.
Next, after the feed mill, we went to check out the breeder facility – hen house after hen house with the caged breeder stock (25,000-27,000 hens per house!). Each house had three long rows of caged hens (three hens per cage) stacked three levels high down one side, and another three levels high down the other, for a total of 6 rows per house. In the middle of the house were the males where the staff collected semen from the roosters to artificially inseminate the hens. Yes, AI – artificial insemination. I guess I never thought about it, but how else do you produce hatching eggs for chicks unless you can assure that the hens have been “bred” by the rooster. When the hens are kept 24-7 in cages, obviously they are not being bred regularly by roosters, so they can’t lay fertilized eggs. In natural systems, the stocking density is 10 hens per rooster in an open barn system, but that’s harder to control, so with AI systems, you can be assured that each hen has received an adequate dosage of sperm to be sure that her eggs are fertilized. Keeping them in cages requires it after all, and it’s all done manually. The sperm must be collected from the roosters and then inserted directly into the “vent” or “cloaca” of the hen approximately every three days. So, in this facility, the workers collect and inseminate two rows of hens each day so that each hen is inseminated approximately once very three days. It’s not an easy task either! I got some great video of the semen collection process and then saw how quickly the women were able to inseminate the hens. After I watched and recorded it, Dr. Otaigbe wanted to make sure I “really” understood it, so he made me practice! At first I thought he was kidding, but he was serious – he said, “Try it, make sure you can really do it!” While this probably violates every IACUC rule in the book, this was Nigeria after all, so I figured, why not! I’ve been attending a SARE-funded professional development program on Poultry Extension for years with the University of Maine, so this would be another useful skill in my poultry “toolbox” to have, so I embraced the opportunity with gusto!
My dear friend Dolapo made sure to capture the moment on all 2:37 minutes of video as well! It certainly was harder than the ladies who had performed this task thousands of times made it look. I wasn’t quite sure if this was really a one-person task or if it took two people (one to hold the hen’s legs and the other to pipette and suck up the semen into the AI straw and the other to quickly squeeze the chickens abdomen to “pop out” the vagina and then insert the syringe into the vent and squeeze. It took the skilled ladies a matter of a second or two to quickly perform the task, yet, somehow I was not quite “squeezing” the abdomen hard enough to get the internal organs to “pop out” of the cavity of their bodies – I guess I was feeling like I would squeeze them too hard and their guts would pop out, but that was sort of the point. I was definitely not that graceful to be holding the legs together with one hand and then squeezing with the other and then how were you supposed to insert the pipette into the vent with a third arm? It was all rather confusing, but eventually I did a couple and they seemed satisfied that I gave it a try. I know they definitely had more than a few laughs watching the white gal in my white lab coat giving it a try! At least I wasn’t squeamish and was definitely up for the challenge and now I can appreciate how much work it is make sure we have a regular supply of baby chicks for our own poultry operation!
After visiting the breeder flocks, we also toured the 120 x 30 meter hen “rearing houses” which were currently empty. They were getting ready to populate the houses with the next group of breeding hens they would be replacing from day-old chicks of some new genetics they were planning for that they would then raise up to the 16-week old “point-of-lay” age to then re-populate their new and expanding breeder houses. I found the tropical “brooder heaters” interesting – they use charcoal heaters to keep the day-old chicks warm until they grow out their feathers. They use a combination of old newspapers and wood shavings from the sawmill industries as bedding. I could imagine the air quality and fire hazard this would cause in a traditional New England barn!
It was mind boggling to think of all the complexity of the operation Ayo and his management team are juggling – from the care and feeding of the breeders alone, to the constant AI process, daily egg collection, washing, cooling, fumigating, incubating, hatching, shipping, marketing, branding, and then raising up of all the replacements to keep a constant cycle of production in motion – this is a big-time operation to manage. They currently have five houses in operation and the plan is to double every year for the next five years. This is growth and scale of an agribusiness venture at its finest. To manage such incredible growth most certainly requires systems development and to be sure all protocols and management operations are very well-defined! Adding in broiler production, management, processing, and marketing will be a whole other “layer” of management and we visited one of their new broiler breeder flocks as well – they were a bit younger, just starting to lay the first small eggs of the production cycle, a dainty little package indeed in the grand scheme of a company’s grand plans for growth and expansion.
Source: jhashley2016eisenhowerfellowship