Documents the Value Chain Opportunities in the Layer Hen egg production industry of Lesotho.

1. Poultry Value Chain Analysis in Lesotho
Egg Production
Planning, Monitoring and Evaluation Department

2. Outline
– Introduction
– Background
– Industry developments
– Lesotho Poultry Sector Value Chain Analysis
– Findings
– Challenges
– Opportunities
– Business Opportunities
– Recommendations

3. Introduction
• The Planning Monitoring and Evaluation Department through its
research division conducted an Egg Production Research
• This research was aimed to inform BEDCO programme development
and the public on business opportunities and challenges in the poultry
sector
• Literature Review
• One on one interviews were conducted with the MSBCM marketing
department officials
• A country wide survey of producers was also conducted ( 3 farmers/
District)
• A draft report has been compiled

4. Background
Commercial poultry industry in Lesotho, six distinct time periods
 Prior to 1941
– small scale raring of indigenous breeds
 1941-1952
– Department of Agriculture - Poultry Improvement Scheme -
Introduction of improved breeds
 1953-1962
– Poultry plant was built in Maseru which produced improved
chickens which were sold to farmers

5. Background – Cont.
 1963-1972
– Establishment of Applied Nutrition Programme and the egg
marketing co-operatives
 1973-1994
– Regulated egg marketing system
 Post 1994
– Free market system: poultry farmer’s appealed to the Ministry of
Agriculture to be allowed to sell eggs directly to wholesalers,
retailers and consumer

6. Industry developments
• Prior to Deregulation
– From 1941 to 1987/88 3 635 farmers keeping 229 400 commercial layers 3
million dozen eggs per annum
• Post Deregulation
– By 1994/95 number of commercial layers dropped to 169 217

7. Industry developments – Cont.
• The average trend in the years shows an increasing demand for imports into Lesotho.
• Doubling in imported trays from 96 533 trays to 194 626 trays from 2012/13 to
2013/2014 signals an increased national demand for eggs which is being met by
imports.

8. Industry developments – Cont.
• During 4Q 2016, a total of 4 183 tonnes of eggs and egg products left South Africa, at a declared FOB
value of R88.9 million ( 7.56 million – Lesotho)
• Lesotho being the second largest export market for South African Eggs.

9. Lesotho Poultry Sector
- Value Chain Analysis
Value Chain Analysis.docxValue Chain Analysis.docx

10. Findings – Challenges
– There is no Hatchery in Lesotho this creates logistical costs for
farmers who have to order from South Africa
– There are limited suppliers of bird cages in Lesotho, and the few
that exist produce substandard cages
– Farmers claim that Lesotho Flour Mills offers lower grade layer hen
feed which limits produce and is out competed by brands from
South Africa
– Vet clinics are generally understocked
– There need for development of infrastructure specific to layer hen
farming as pollution is a challenge in community-based projects

11. Findings – Challenges
– Water supply is a challenge in the highlands, where a community tap
is shared this normally creates clashes when water is scarce, and the
farm suffers.
– There is a high cost of entry into the egg production business (Inputs
are expensive),
– The cold weather conditions ( longer winters) in the highlands limits
egg production.
– Need for skills development in the business
– Lack of a readily available and accessible National Supplier Database

12. Findings – Opportunities
– There is an abundant demand for eggs in Lesotho that has not been met
– Imported eggs are less preferred to locally produced eggs, despite the fact that
imported eggs are cheaper
– The main competitive advantage that Lesotho eggs have over imported eggs is
freshness, this advantage has created an abundant and growing demand for eggs in
Lesotho from local producers
– South Africa is participating actively in input supply industries include hatchery,
cage production, and feed. Creation of businesses in input specific industries will
enhance local production
– There is a growing demand for Layer Hen Chicken Meat as it is considered healthier
than packaged and imported chicken meat
– There is a growing demand for free range hens and their eggs, where a tray of free
range hens is normally twice the price of cage breed hens

13. Business Opportunities
• Expansion into Value chain opportunities such as:
 Operating national feed depots
 Feed production
 Cage production
 Sale of mechanised systems
 Opening a hatchery
 Opening an abattoir
 Packaging and distribution of Layer Hen Meat
 Hen House Construction
 Borehole drilling
 Egg tray production and sales
 Manure production
 Business Development Services (Business Plan
Development)

14. Recommendations
• BEDCO should introduce layer hen specific training programmes.
• The Government of Lesotho should work towards creating a national
hatchery that will meet the point of lay hen supply needs of the
country.
• A national database of all value chain practitioners in the egg
production business of Lesotho should be created; with readily
available and accessible supplier information starting an egg
production business will become easier.
• Quality checks should be frequently conducted on national Feed
suppliers
• Quality checks should be frequently conducted on egg farms

15. Recommendations– Cont.
• Trainings on innovative technologies in the egg production sector
should be pursued so as the scale up production for those
aspiring entrepreneurs
• Equipment Leasing for Start ups will aid in lowering the barriers
to entry into business
• Access to Start up Finance - It requires close to 500 hens to make
reasonable profit in the business, coupled with the high costs for
cages, infrastructure and feed
• Restrict egg imports through Branding Lesotho Eggs.