|Title:||Indonesia animal feed and day-old chock producers with market share percentages for 2011|
|Source:||Indonesian Commercial Newsletter|
Start of full article - but without data
Animal feed and DOC producers and market share in Indonesia, 2011
Companies Share in DOC (%) Share in feed (%)
Charoen Pokphand XX XX Japfa Comfeed XX XX Sierad Produce X X Other producers XX XX Total XXX XXX
Sources: Data Consult
Poultry farming in Indonesia is an industry including small, medium and large scale farms operated under traditional and modern management systems.
Production of breeding stock and feed are dominated by big companies that operate integrated industry that include animal feed, breeding stock, poultry farms and chicken slaughterhouses leaving small and medium farmers little room for expansion.
According to data at the animal husbandry directorate general, the country's production of chicken meat including meat of pure bred and free range chickens reached X.XX million tons in 2011 as against domestic consumption of X.X million tons.
Java accounts for around XX% of the country's chicken meat production and supply. Poultry farms in Java are small and large scale farms, traditionally and modernly operated.
Dependence on imports for feed basic material is a problem that still hampers expansion of poultry farms in the country. High prices of imported feed basic materials made the end products of poultry farms less competitive in export market.
However, the prospects are still good for business in poultry farms with the growing demand for chicken meat on the domestic market. Chicken consumption in the country declined only when bird flue broke out.
Small farms dominant in number
Poultry farming is capital intensive industry but does not require high technology. Poultry farms, therefore, have grown more as small industry.
There are few big companies operating in poultry farming industry using modern management system. Among the companies is Sierad Produce which operates integrated industry that includes business in poultry breeding farms, commercial poultry farms, and poultry feed manufacturing, poultry slaughterhouse and chicken meat processing industry.
The chicken population in Indonesia including pure bred broilers, and free range chickens has fluctuated in the past several years as a result of the outbreak of the bird flue in several areas. The rise and fall in the population has also been caused by price instability of feed, day old chocks (DOC), chicken meat.
Increase in the prices of feed basic materials in the world market will push up the production cost while farmers could not easily raise the selling prices of their chicken as demand for chicken meat is sensitive to price hike.
The population of chicken in the country has fluctuated but has increased X.X% on the average a year in the 2007-2011 periods. In 2007, the population was recorded at X.XX billion, down X.X% to X.XX billion in 2008, but rose XX.X% in the next year to X.XX billion. In 2010, the population fell X.X% to XXX,XXX, but rose again to X.XX billion in XXX.
Most or XX%-XX% of the country's chicken population is in Java, where most big farms are located
Big players dominate animal feed and DOC supplies
Production and supplies of day old chickens (DOC) and chicken feed are dominated by a few big players that control integrated industry like Charoen Pokphand and Japfa Comfeed.
The big players control the business form the upstream sector animal feed production and breeding, to midstream sector commercial poultry farms and downstream sector chicken slaughterhouse and chicken meat processing. In commercial poultry farming, they are involved in partnership that they do not have to own lands and build chicken coops themselves.
In 2011, Charoen Pokphand and Japfa Comfeed together had a XX% share of the animal feed market and accounted for XX% of the DOC production.
The DOC production of Charoen Pokphand totaled XXX million in 2011, up from XXX.X million in the previous year as against the country's total production of X.X billion in 2011 and X.XX billion in 2010.
Meanwhile, sales of animal feed by Charoen Pokphand reached X.X million tons in 2011, up X million tons in 2010. The sale in 2011 was around XX% of the country's total sales of XX.X million tons and X.X million tons in 2010.
Production continues to rise
The country's production of chicken meat in the past several years has continued to increase--up X.X% annually in the 2007-2011 periods with annual production averaging X,XXX,XXX tons.
In 2010 the country's chicken meat production grew X.X% to X,XXX,XXX tons from X,XXX,XXX tons in 2009. In 2011 the production rose further X.X% to X,XXX,XXX tons. The increase in production was boosted by growing demand in the country.
In 2012, the production is forecast to reach X,XXX,XXX tons. See the following table.
Java, the largest producer
Java is the largest producer of chicken meat in Indonesia accounting for XX.X% of the country's total production in 2011.
The poultry farms in Java are supported by XX animal feed factories or the largest in the country located in Banten, Jakarta, West Java and East Java. The fact that Java is the largest market for chicken meat has boosted the growth of chicken farms and production in the island.
The largest chicken meat production center is West Java accounting for XX% of the total production in Java, followed by East Java accounting for XX% and Central Java for XX%.
West Java is the largest producer of pure bred chickens, but the largest producer of free range chickens is East Java mainly the districts of Lamongan, Malang, Blitar, Probolinggo, Tulungagung and Trenggalek.
The country's livestock sector especially poultry farms has served more to meet domestic meat requirement. The sector has not been competitive enough in export market both in prices and quality. The country's products of animal husbandry have not been up to international standards in quality and health.
Competitiveness in price could not be improved because the country's livestock farms are relatively small in scale, therefore, not efficient.
Exports have fluctuated in volume in the past five years. Exports totaled X,XXX tons valued at US$X,XXX,XXX in 2007, down to X,XXX tons in 2008 when the prices of feed surged resulting in an increase in production cost to follow the rise in the country's inflation. Most feed basic materials like corn grains, soybean meal, meat bone meal (MBM), medicines and vitamins are supplied through imports.
In 2011, exports shrank again to only X,XXX tons. The country's exports of chicken meat in the coming years will depend much on the success in reducing dependence on imports of feed basic materials.
The country is already self sufficient in chicken meat supply. Imports, therefore, remain small. Imports are mainly in mechanically deboned meat (MDM). The price of chicken meat in MDM form is highly competitive that MDM could poses a threat to the market of locally produced chicken meat. However, imports are still small; therefore, it could not be a serious threat in short term.
In the period of 2007-2011 the country's imports of chicken meat averaged X,XXX tons per year. The government's policy in chicken meat imports is based on the condition on the domestic market. Imports have been banned when domestic producers could meet the domestic requirement, but the government would allow imports when there is scarcity on domestic supply.
The government also requires importers to invest in poultry farm in Indonesia to end dependence on imports.
Chicken meat is a source of animal protein cheaper than other meat like beef and mutton. Chicken meat market, therefore, more potential to expand in the country. Chicken meat and eggs are both sources of protein needed by the people with prices within the buying power of the people in general.
Currently, Indonesia has per capita income of around US$X,XXX a year, but per capita consumption of chicken meat remains low at X kg per year. Per capital consumption of eggs are XX eggs per year. The figures are relatively low compared to per capita consumption of XX kg per year in Malaysia and Singapore.
In the period of 2007-2011, the country's consumption of chicken meat grew X.X% per year from X.XX million tons in 2007 to X.XX million tons in 2011. Consumption of chicken meat is estimated to reach X.XX million tons in 2012.
Poultry farming in Indonesia is a capital intensive industry. Poultry farms in the country are both small farms traditionally managed by small farmers and big farms operated with modern system of management by large companies.