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Relationship, Understanding Critical for 30-year Customer

20 February 2014

INDONESIA - Aviagen recently held the Indian River Association meeting in Bali.

Bob Dobbie and Fred Kao present a 30-Year Customer award to Mr Bambang Budi Hendarto

"The establishment of a good relationship and firm understanding between two companies, which often has its most value during hard times when solutions are difficult to get but are most important, is critical in a long standing business association like ours," asserted the CEO of Japfa Indonesia Mr Bambang Budi Hendarto.

Japfa had a good relationship and had dealt with Lohmann for around 14 years purchasing Lohmann Indian River broiler breeders prior to the Ross acquisition of Indian River in 1997. At about that time the joint impact of disease and the Asian financial crisis hit Indonesia and the poultry industry and quickly placed an enormous burden on Japfa. With mortalities at parent stock level of 25-30 per cent and broiler chick production down 60 per cent in Indonesia, the company found itself in survival mode and required immediate assistance.

Assistance was requested from the new Indian River owner, Aviagen to help Japfa by directly supplying parent stock in order to keep the company in operation. The market was difficult, sales of feed and day old chicks had been reduced, no one had credit and the responsibility to support the large number of people working in Japfa was acutely felt by the management. Japfa also took the opportunity to change strategy and immediately sent 25 per cent of the employees out to support the surrounding farmers.

There was little money in feed and chick sales, many were supplied free or at low cost to keep farmers going. Japfa had no experience selling day old broiler chicks and yet the commercial farms began to grow. The assistance from Aviagen was working and by 2000 the feed and day old chick markets increased and returned to profitability. Since that period Japfa has changed as a company and today produces about 60 per cent of the chicks for its own integrated business and 40 per cent for external sales.

Through this experience the company was also better prepared to manage a subsequent challenge from avian influenza in 2002 -2003 and suffered the least of all the major companies in the domestic poultry industry. Over the last 10 years Japfa has played an important role in establishing Indian River as the ‘first choice for farmers’ in the Indonesian market.

"While we have taken some time for the slow and steady change of the name from Lohmann Indian River to Indian River to take hold within the company, it is a good reflection of our culture," said Mr Hendarto

"The strong relationship between Japfa and Indian River and the future look very bright. This kind of meeting here in Bali offers more information, better relations and communication and the chance to know more people in Aviagen. Our culture is like that. If everything is good why change. Understanding that is very important," he added.

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