RESEARCH AND DEVELOPMENT DIVISION ANALYSIS OF BUSINESS OPPORTUNITIES BY LEA REGIONS PHASE IV FINAL MOCHUDI BRANCH REPORT

Transcription

1 RESEARCH AND DEVELOPMENT DIVISION ANALYSIS OF BUSINESS OPPORTUNITIES BY LEA REGIONS PHASE IV FINAL MOCHUDI BRANCH REPORT Submitted To: Ag. Research and Development Director By: Neo Mahube and Patrick Mokwele Date of Submission: 13 April 2013

2 EXECUTIVE SUMMARY The Assessment of Business Opportunities by LEA Regions (ABOLR) Phase IV study is a follow up to Phases I and Phase II study, which had mapped business opportunities across all the 13 LEA branch regions in The current study, is an extension to the Phase III ABOLR study. While the Phase III Study evaluated selected opportunities from phase I and II Studies, the current phase intended to validate and rank, in terms of competitive advantage, business opportunities for pursuance by the LEA Mochudi Branch. OVERALL STUDY OBJECTIVE The overall objective of this study is to provide in-depth analyses of the prioritised opportunities for the Maun branch. Specific Objectives (i) Validate and prioritize the identified opportunities with the relevant stakeholders. (ii) Solicit any additional opportunities from key stakeholders. (iii) Determine the feasibility of exploitation of the identified opportunities. (iv) Align the prioritized opportunities with existing national policies and programmes. (v) Identify supporting and inhibiting factors and recommend remedial actions to ensure exploitation of the opportunities. (vi) Solicit any additional opportunities from key stakeholders. Page ii of 13

3 This study was carried out in the LEA Mochudi Branch Area, which covers the Kgatleng District. The study targeted the District s Economic Development Committees (DEDC) for the Kgatleng Districts, whose main objective is to identify and promote local business opportunities at regional level. The study also engaged other relevant stakeholder (e.g. financiers) who are key to business development in the region, to map, validate and rank opportunities according to their competitive advantage. Business opportunities identified during the Phase II study were validated and prioritised for in-depth analysis. Analysis was undertaken on the top four (4) ranked business opportunities. The study undertook a two prong approach, which firstly entailed undertaking regional workshops with targeted stakeholders and later collecting primary data to those relevant to opportunities in question. Workshop results were achieved through the rating, from a scale of 1-10, various factors affecting the development of identified business opportunities. The rated factors, include availability of raw materials/inputs to undertake the business; available markets for the opportunity; availability of land and water in relation to the opportunity; cultural background to support the opportunity; skills availability; availability of financial and technical support geared towards the opportunity; regional climatic conditions (temperature and rainfall) to support the opportunity; suitability of physical environment (soils, vegetation and land forms); development of infrastructure to enable ease of doing business; and supporting legal framework (strength and challenges) relating to the opportunity. SUMMARY OF RESEARCH FINDINGS The study has identified business opportunities that have potential of being promoted by the LEA Mochudi Branch. (listed in Annex 1). These are primarily Page iii of 13

4 agriculture related. Highly ranked opportunities include, horticulture production, beef production, small stock production, table egg production and production of Tswana chicken. Due to availability of a comprehensive research on the Botswana Horticulture Value Chain Analysis undertaken recently by LEA in 2010, in-depth analysis of the horticulture production was not assessed during this study. Table 1 and 2 summaries study finding for the four aforementioned opportunities. Page iv of 13

5 Page v of 13 MAJOR FINDINGS Table 1: Summary of Findings for the Top Ranked Business Opportunities in the Mochudi Branch Region. MAIN BUSINESS OPPORTUNITY Beef production UPSTREAM AND DOWNSTREAM OPPORTUNITIES Provision of transportation services to markets Establishment of slaughter facilities Weaner production Hides Collection Supply of feeds MAIN SUPPORTING FACTORS Kgatleng has been zoned for beef production by Ministry of Agriculture (MoA) Culturally supported industry Suitable vegetation for beef cattle Availability of parent stock Available underground water (boreholes) Retail Market opportunity. Proximity to market

6 Availability of inputs and raw material Availability of financial and technical support Government support programmes and policies in place (ISPAAD provides grants for boreholes drilling, equipping and Availability of skills, which are traditionally inherent from older generations Favourable physical environment (vegetation) Good infrastructure (electricity connectivity, good road network and telecommunications) allowing ease of access to markets. Rail connectivity between Kgatleng and major beef market (Lobatse BMC), rendering reduced transportation costs. F:RDD:11 Local Enterprise Authority Page vi of 13 Rev.: 01

7 FMD Free Zone region(i.e. Green Zone) Existence of association to advocate for beef producers and benefit from economies of scale. Small production stock Establishment of slaughter facilities. Hides collection. Kgatleng has been zoned for small production by Ministry of Agriculture (MoA) Culturally supported industry Suitable vegetation for small stock Available underground water (boreholes) Retail Market opportunity. Proximity to major small stock markets Availability of inputs and raw materials Availability of financial and technical support Government support programmes and policies in Page vii of 13

8 Commercial Production of Tswana Chickens Breeding of parent stock Production of feed inputs (sunflower, maize and sorghum) place Relative higher prices from the local market Availability of skills, which are traditionally inherent from older generations Good infrastructure (electricity connectivity, good road network and telecommunications) allowing ease of access to markets. Existence of association to advocate for small stock producers and benefit from economies of scale Kgatleng has been zoned for poultry production by Ministry of Agriculture (MoA) Culturally supported industry Production does not require a lot of water, thus Page viii of 13

9 enabling promotion of this industry all around Kgatleng Available niche market opportunity (retail and hospitality industry). Some retailers import free range chicken, because of the unavailability of commercial and consistent local producers Tswana chicken mostly preferred than broiler chicken, because of the health benefits attached Proximity to markets for tswana chicken producers Availability of inputs and raw material Availability of financial and technical support Government support programmes and policies in place. Page ix of 13

10 Availability of skills, which are traditionally inherent from older generations Good infrastructure (electricity connectivity, good road network and telecommunications) allowing ease of access to markets. Existence of association to advocate for poultry producers and benefit from economies of scale. Page x of 13

11 Table 2: Invalidated Opportunities OPPORTUNITY REASONS FOR INVALIDATION Table Egg production The in-depth analysis of this opportunity established that there is no market for eggs in the region and nationally as the country is self -sufficient in egg production. RECOMMENDATIONS The recommendations being proposed for consideration by LEA management are presented below as per opportunities appraised. OPPORTUNITY Beef Production RECOMMENDATIONS 1. It is recommended that LEA through its Mochudi Branch, should promote commercialization of beef cattle business opportunity in the North-western side of Kgatleng. Page xi of 13

12 2. LEA should lobby MoA to consider providing grants for establishment of regional slaughter facilities, under the LIMID programme. Small stock Production 1. LEA, through its Mochudi Branch should pursue commercialization of small stock production, in the north eastern side of Kgatleng. 2. LEA in collaboration with MoA should negotiate with financial institutions to relax financing requirements for small stock in the quest to promote small stock production. 3. LEA should lobby MoA to consider providing grants for establishment of regional small stock slaughter facilities, under the LIMID programme. Commercial Tswana chicken production Table egg Production 1. It is recommended that LEA should promote commercial production of Tswana chicken business opportunity in the LEA Mochudi Branch. 1. LEA should not promote table eggs production for the region or any other region in Botswana but should rather promote layer breeding as an opportunity, requiring investors. Page xii of 13

13 OVERALL CONCLUSION This study sought to undertake in-depth analysis of four opportunities to be promoted in the Kgatleng District by the LEA Mochudi Branch. The four include beef production; small stock production; commercialisation of Tswana chicken and table egg production. The former three present themselves as opportunities worthy of being promoted and commercialised in the region. The sub-sectors have in place good policies that can develop and grow production of cattle beef, small stock and Tswana chicken, beyond regional supply. The region is in close proximity to the major markets in Gaborone which hosts the country s largest meat distributors as well as the Lobatse BMC, a major market for beef cattle. The region has good infrastructure (electricity and water connectivity) that allows ease of production and access to inputs and markets. The study established that over the years, the country has successfully managed to substitute importation of table eggs through increasing local production to be selfsufficient. This realisation therefore limits the market opportunity for establishment of new table egg producers in the region. The study therefore concludes that any increase in market demand, should be achieved through expansion of current table egg producers, rather than establishment of new entrants. The study has however noted the non-existence of breeding stock (chicken layers), which are imported from South Africa. The over-reliance of breeding stock on imports signifies an opportunity for establishment of a chicken layer breeder in Botswana. The Kgatleng region, being strategically situated along the railway and in close proximity to major table egg producers, places itself as a good location for establishment of this type of enterprise. Page xiii of 13