Indian Poultry Giants Lured in by Growth Prospects14 May 2012
BANGLADESH - Three Indian poultry giants set foot in Bangladesh in the last two years, encouraged by growth in the local industry and the prospects of increased demand for protein due to rising income and a huge population.
According to The Daily Star, of the companies, India's poultry conglomerate Venkateshwara Hatcheries (VH) Group has already set up a feed mill - Uttara Food and Feeds Ltd - to grab a part of 25 lakh tonnes of annual market for feed in poultry and fish farms.
Venkateshwara Hatcheries, also known as Venky's, plans to set up a grand parent stock farm here.
Another two firms, Shuguna and Amrit, have rented feed mills.
Suguna Foods, India's number one broiler producer and a pioneer in poultry integration, has leased a number of parent stock farms to breed chicks to market among farmers, said industry insiders.
"Prospects are bright for us in Bangladesh. Before the outbreak of bird flu here and India, we marketed broiler and layer chicks here and received a huge response from farmers," said Dr Rafiqul Islam, country manager of VH Group.
The recent influx of foreign investments is seen after New Hope Group of China, Godrej Agrovet of India and CP of Thailand joined the local industry, which has been growing by 15-20 per cent annually over the past 20 years.
Currently, total investment by in the sector is Tk 15,000 crore, according an industry estimate.
The entry of foreign firms has, however, created worries among the local poultry and feed industry operators who fear uneven competition as foreign companies get funds at lower costs.
Islam, Venky's chief here, however, said higher investments would enhance competition and benefit consumers.
"Our entry will reduce scope of monopolistic behaviour in the industry and thus dampen the tendency (of local poultry operators) to hike prices all on a sudden," he said.
Competition will reach a stage where a price increase of poultry items such as eggs will be marginal, said Islam of Venky's that operates in 40 countries.
Islam said Venky's, which also manufactures medicine and vaccines in India, has been marketing feed for the past seven-eight months here by setting up a mill in Jessore. The mill makes 1,500 tonnes of feed per month.
"We have received a good response," he said, adding that the company has also set up two laboratories to provide disease diagnostic support to farmers and breeders.
Venky's also wants to establish a grand parent farm in Sylhet.
Shameem Al Mamun, head of sales of Amrit Global (Bd) Pvt Ltd, said Bangladesh's internal market for poultry is big due to the population of the country.
"Increasing population and people's income widen the prospects for higher demand for chicken and eggs," he said.
However, Moshiur Rahman, convener of Bangladesh Poultry Industries Coordination Committee, said the government should not allow foreign investment in these sectors where local investors have developed capacity.
Ihtesham Shahjahan, general secretary of Feed Industries Association of Bangladesh, said foreign companies enter Bangladesh market because of competitive advantage in terms of loans that they get at lower interest rate from abroad.
He said the production capacity by Bangladeshi companies far exceeds the present annual demand for 27-30 lakh tonnes of feed.
"So, why do we invite outsiders with a huge competitive advantage," he said, urging the government to make a list of possible investment areas where local companies are yet to venture or bring in new technology.
It should be done in consultation with the local industries, he said.