Tuesday, March 17, 2009

Crocodiles offer a snappy investment option

Rearing crocodiles is one of the investment opportunities which Ugandans can exploit in a bid to benefit from the increasing global demand for its skin and meat.

Uganda as a country is naturally endowed with these creatures. Queen Elizabeth National Park has the biggest population.

On the world market, crocodiles skin/leather is used to make ladies’ bags, belts, wallets and classy shoes. For example, a wallet made out of a crocs skin costs $200 (Shs380,000).

Realising this potential, two Ugandan businessmen together with a Zimbabwean family with a wealth of experience in crocs rearing, partnered and formed a company called Uganda Crocs Limited in 1991, with the intention of making crocs a source of income.

Uganda Crocs Limited to achieve its export goals applied and secured an International Trade in endangered Species of Wild and Flora (CITES), for a quota to export at least 2,400 skins, annually.

Anyone with the passion to venture into this business, farming of crocodiles is done in an ecologically friendly way under close supervision from UWA and within the CITES regulations.

Mr Fred Kamugira, a director in the company, said; “With this kind of supervision, there is no threat to the existence of the Nile crocodile but instead any investor will be helping to conserve the species,”

Uganda Crocs has so far invested close to $2 million dollar, in designing the crocodile model farms, setting up incubators, heated hatchling ponds, generator and tool storage, water reservoir, skinning and salting bays, cold room, housing, office a frame of lodges and an entertainment area.

Currently, the farm has only 3,000 crocodiles, on average the company earns about $50,000 (Shs95 million) per year from the little exports.
Every year around the months of February-March slaughters the two and half year old crocodiles for its lower skin which is exported to South Korea.

The meat is sold to some local restaurants licensed by UWA to sell game meat like Quality Cuts, Sam’s restaurant and some other Chinese Restaurants in Kampala city.

“Each kilogramme of crocodile meat at the open market costs Shs30, 000-40, 000,” Mr Chris Katsigazi another director said.

The investors said this could have been a bigger investment, unfortunately, this company, which enjoys the monopoly up to date, has failed to meet the required international CITES quota.

This means that for the last 15 years, when the company started exporting, the country has annually been losing close to one billion shillings worth of export revenue for failure to meet this requirement.

Kamugira said; “We would be able to meet the quota if we were able to increase on our production. But the eggs we collect from the wild under an arrangement with Uganda Wildlife Authority are not enough to sustain the quota”.

He added; “Despite the abundant eggs, which are sometimes eaten up by predators, UWA only allows us to collect 1,200 eggs, less than the 4,000 we request for annually”.

The directors of the company say that Uganda is only able to export about 300 skins yet the potential to export more is there.

Mr Katsigazi said, the company needs to have at least 10,000 crocodiles to be able to meet the CITES requirement. During the tour of the farm located 75 km off Kampala at Katebo-Buwama on the shores of Lake Victoria, Mr Chris
He said for each egg, whether normal or stale, the company pays UWA $1.

However, UWA Public Relations Manager, Ms Lillian Nsubuga in an interview about the fewer eggs they permit Uganda Crocs’ to collect said; “UWA is here to protect the sources from being depleted. Apart from this company collecting the crocs eggs, there other predators which eat the eggs, that’s why we limit the numbers”.

Ms Nsubuga further said that UWA allowed Uganda Crocs to collect 2,000 eggs but the company has always been under collecting.

Meanwhile Uganda Export Promotions Board (UEPB) together with the line ministry of trade has embarked on a campaign to see that the private businesses which are export oriented and serving a double purpose but facing challenges in their daily running are helped.

Future plans
The company’s future plan is to build breeding ponds and accumulating on the existing breeding stock, setting up a tannery so as to export processed skins as opposed to wet salted skins,” Kamugira said.

The other activities that the company wants to expand into are the game meat processing and packing for both the local and international market, plus cage fish farming both for feeding the animals and for human consumption.

The company has started trials to turn the place into a tourism site, besides crocodile farming, with activities like, hiking and fishing, water cruises and providing accommodation and catering facilities. The tourism site has been branded as ‘Camp Crocs Resort’.

The camp situated on the shores of Lake Victoria, is a 45 minutes boat ride to the Ssese Islands and a 25 minutes drive from the Uganda Equator.

Ms Carol Kamugira the Resort Manager said; “This place is well placed for tourist purposes. Therefore the plans to build more bandas for accommodation of tourists and of water sports and activities are underway”.

Education facilities for school groups, parties that visit us,
To conserve the species of Wild crocodile (Uganda Crocs Ltd returns a percentage to the
Ms Kamugira said they have in the process of constructing a website www.ugandacrocs.com which will not only increase the export of the crocodile products but also significantly contribute to tourism.

The investment of Uganda Crocs Ltd has already made significant contribution to both the local community and Uganda generally.

“The company has created close to 100 jobs and as expansion of the business is done more will be employed,” Mr Katsigazi said.

He said large numbers of workers are employed to help right from the collection of eggs from the wild, maintenance of the farm right to the labour intensive slaughtering and skinning. “With the tannery and meat processing plants in place, more employment will be created”.

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