Anybody who believes in the motto ‘go big or go home’ has clearly never met 28-year-old Clive Tigere. He is going big in his own home town of Louis Trichardt, Limpopo.
Tigere and his mother, Dr Caroline Tigere, started a broiler operation back in 2011, when he was still in high school.
“Things have changed very much since then. At that time we bought our chicks directly from a hatchery, and our feed from a mill,” he remembers.
By the time he matriculated, business was booming and he and his mother were selling 1 000 live birds a day. “That was good money. We sold birds at R40 each, which means we had a turnover of R40 000 a day.”
Tigere was reluctant to leave the business after matric for further education, as he was simply not keen to go to university. But his mother, a gynaecologist, won this battle.
“She said I had to first study and then I could do whatever I wanted,” he recalls. “I come from a family that believes in a strong educational foundation.”
So he left the country’s northernmost province for the southernmost, the Western Cape, where he obtained a BSc at the University of Cape Town, majoring in statistics and analytics.
“After completing my studies I had various job offers,” he recalls, adding that some of these were from overseas. “But I returned home!”
His reason was simple: the chicken challenge was still nagging him, and he could now tackle it as a graduate, with newly gained knowledge that he could inject into the business.
“After graduation, I had this burning desire to see how far I could take this chicken thing. Once back home, though, I at first thought I’d made the biggest mistake of my life.”
In 2016, Tigere and his mother restarted their poultry operation. But remembering their difficulties in obtaining chicks, they decided to move upward in the value chain. This was the start of their day-old chick business, KC Hatchery.
Tigere explains that, over the years, the informal poultry market has exploded. In and around Louis Trichardt itself, several shops have popped up supplying broiler farmers with feed, medicine and day-old chicks. Instead of having to travel far to obtain what they require, poultry farmers can now make all their purchases locally.
“This is a fairly new development. The oldest store I supply chicks to has been there for about 16 years, but most of the others are only five to seven years old,” says Tigere. He adds that it’s not an easy industry and shops really need to know what they are doing to be successful.
While half of KC Hatchery’s stock is sold to a local commercial broiler producer, Bush Valley Chickens, Tigere says that it’s really the strength of the informal market that has surprised him.
“It’s extremely interesting to experience first hand how resilient South Africa’s informal market is. When I delivered chicks in the local villages, I soon realised how large the business truly is.”
KC Hatchery currently supplies day-old chicks to between 200 and 250 smallholder farmers.
“It’s difficult to pinpoint the exact number, because I deliver the chicks to shops in the region and they sell the chicks, and all other supplies needed to raise them, to the smallholders.”
REDUCING THE RISK
As he had studied probability and risk in statistics, it was only natural for Tigere to try to mitigate business risk as far as possible.
“Gaining access to quality fertile eggs is extremely difficult and is by far the biggest risk that we needed to manage,” he says. (In fact, this is Tigere’s foremost tip to aspiring breeders: find a reliable supplier of fertile eggs even before you buy equipment.)
Initially, he bought eggs from local co-operatives. At that time, only one in four eggs would hatch, a hatching rate of just 25%. He was then able to find a supplier that helped him increase his hatching rate to about 65%, or two out of three eggs. This still wasn’t good enough, so the search continued.
Finally, Tigere made contact with Country Bird Holdings (CBH) and was able to make a deal to get eggs from its branch in Lichtenburg, North West. Although the eggs now have to be transported 600km, it’s well worth it, as he knows that almost nine out of 10 eggs (89%) will hatch.
“This catapulted our hatchery to the next level,” says Tigere. “It wasn’t easy to partner with CBH, but once they were on board, it really boosted the short-term success of our business.”
It also helped his clients’ businesses, and this is when Tigere realised that there was a major problem in the market.
“Customers were suddenly phoning me and thanking me for my product. That’s not the way it’s supposed to work; I should be thanking them!”
The high-quality CBH eggs meant that Tigere’s clients suddenly had a low mortality rate. And the fact that KC Hatchery kept its prices at market level meant that smallholders were able to increase their earnings without an increase in overhead costs.
“Needless to say, our customers were thrilled. In short, we weren’t only able to [lower risk for] our business, but we were also able to build our brand and customer loyalty.”
Two external factors gave the hatchery an additional boost: the COVID-19 lockdown, and importation tariffs.
Tigere says that between 2017 and 2019, many smallholder broiler producers were harmed by cheap chicken imports dumped on the township markets.
“Producers were forced out of business due to cheap imports. It was really heartbreaking to see first hand. Many grandparents have to look after their grandchildren, and those 100 to 200 broilers they produced per fortnight enabled them to take care of the children.”
But then anti-dumping poultry tariffs were implemented in accordance with the Poultry Sector Master Plan, and these immediately benefitted local business.
Another upswing in business came when the COVID-19 lockdown led to a shortage of chicken in the Louis Trichardt area.
“Our sales and those of our clients increased and many people were able to start small businesses during this time. On average, my clients were able to earn between R5 000 and R7 000 monthly, which meant they made an average profit of R3 500 once their expenses were taken into consideration.”
This, Tigere emphasises, is not a bad income compared with government’s monthly pension grant of R1 980. “You have to give the people who sell chickens respect. They’re astute business people in their own right.”
Business has boomed to such an extent that KC Hatchery, CBH and a third partner, Bush Valley Chicks, recently partnered to invest in a new hatchery 1,2km outside Louis Trichardt.
The partners contributed the funds for the new facility, but they are hopeful that the Industrial Development Corporation will take up equity in the building.
The new hatchery has the capacity to produce 210 000 day-old chicks a week. Before the expansion, KC Hatchery could produce no more than 20 000 chicks a week and had to buy in additional chicks, because clients were demanding between 50 000 and 60 000 chicks a week.
While the future looks bright for their business, the same cannot be said for Eskom’s ability to keep the power going. Tigere thus had to make a plan.
“A hatchery without power will simply be a failure. We were forced to buy generators for the operation,” he says.
Initially, KC Hatchery was equipped with only one generator, but recently a second was acquired as a backup.
“Power failures really disrupt our business, and we’re unable to complete a day’s work without [power],” says Tigere.
“It’s cold at the moment and we need heat to keep the eggs alive.”
Email Clive Tigere at [email protected].