Feed Industry in Bangladesh (Part 1)

A strategic analysis in the context of Bangladesh

The Value of global feed industry business is around USD 400 billion a year with more than 31000 feed mill companies in the world. Current global capacity is around 980 million tons whereas in Asia there are around 13736 manufacturers with capacity of over 350 million tones. Bangladesh, being a small country in Asia, is gradually increasing the dimension and horizon of the feed milling industry
with the total investment for the poultry sector of the country is more than BDT 5,000 Crore and more than 130,000 Poultry Farms have been established in the rural areas throughout the country. The industry has been successful in providing employment opportunities to the rural population. About 6,000,000 people are directly and indirectly involved in the poultry sector for their livelihood.

The role of Poultry, Fisheries and Livestock sectors in the development of agro-based economy of Bangladesh is very important and promising. They contribute around 8% to national income, which is also 32% of the total agricultural income. About 80% of animal protein in our diet comes from fish and livestock. The poultry industry in Bangladesh plays a crucial role in economic growth and simultaneously creates numerous employment opportunities. The poultry industry, as a fundamental part of animal production, is committed to supplying the nation with a cheap source of good quality nutritious animal protein in terms of meat and eggs. Approximately 20% of the protein consumed in Bangladesh originates from poultry. A gap still exists between the requirement and supply of poultry meat and eggs. Among poultry species, the chicken population is dominant over others, at almost 90%, followed by ducks (8%) and a small number of quail, pigeons and geese. Free range ‘backyard’ and scavenging poultry, that are traditionally reared by rural women and children, still play an important role in generating family income, in addition to improving the family’s diet with eggs and meat.

Market Size and Growth Rate
There is a huge gap between production and supply of the feed items. Current annual turnover in feed industry is over BDT 10 thousand crore and increasing at a rate of 10% every year. As our consumption is very low compare to other country, our internal growth scope is immense. Since 2000, imports from Asian nations have more than doubled from 204,000 tons to 418,000 tons as a result of increased shipments from Turkey, Malaysia, China, India and, to a lesser extent, Thailand.
As per the standard of World Health Organization (WHO), a matured person should intake 22 Kg of protein per year; whereas average intake of protein per person per year is 4.5 Kg in Bangladesh. A study shows that 6% GDP growth leads to 11% growth in poultry industry. Since there is a huge gap between standard intake and actual intake of protein, it is expected that the industry will grow very fast in future, if the present economic growth can be maintained at least.

Average chicken consumption per person per year

Source: World Health Organization

Seasonal Aspect
Demand for feed varies seasonally. Demand for fish feed and poultry feed decreases around 30% during the period from November to February. But demand for the feed increases during the period from July to September by 50%. The product of the Company is used by the poultry farmers and commercial Fish firms throughout the country.

(Countinue)