Get ready to face competition from the World – BS Yadav

13During 58th National Symposium of CLFMA, Think Grain Think Feed team met Mr. BS Yadav, Executive Director & President of Godrej Agrovet Limited which is biggest manufacturer of compound livestock feeds in the country. We discussed about the present challenges, upcoming issues and way forward for the industry. Below are the excerpts from the interview:

Firstly on behalf of Think Grain Think Feed, we would like to congratulate you for being re-elected Chairman for CLFMA of India. Could you please spell out the main issues confronting the Indian Poultry Industry?
One of the main issues happens to be the lack of branding of the poultry products. Whenever there is increase in the supply of poultry products, the price gets depressed. In US, legs are considered a kind of by-product, as they realize that the main value is for breast meat. Even government understands that they are dumping the by-product here. Hence, some duties should be imparted to get parity in terms of prices. Presently, 110% duty is applicable on portions and 35% on whole chicken.
What are your views on the price trends of the raw materials?
As you know that the prices of soymeal and corn worldwide are lower than in India. GM soy and corn are not allowed for import. On other side debate on chicken imports fed on cheaper GM soy and corn is going on. There should be level field playing for cost regulation.
In times to come, as trade become more global, India has to open its doors. The only way forward is to become more & more competitive vis a vis global market. If you are a raw material player, because of lower margin you cannot protect yourself from world market, while a branding chicken player can be protected because of premium brand value.
Could you throw some light on cold chain infrastructure, where do we stand now ?
Till date the country is having open houses for layers, commercial growing, grand- parents, breeding farms. The feed conversion efficiency is no doubt good, but there is still a long way to go for the industry with regard to disease control, contamination and biosecurity. While demand (consumer) supply chain is quite weak, 95% of the market share is live bird and only 5% is for processed chicken.
Processing plants also run on small capacity of 2000-4000 birds per hour in India, while internationally, the capacity of the processing plants is 10000-15000 birds per hour. The country with a 60 Million broiler a week and 3.5 Kg per capita, growing @ of 7-8% per annum shows huge potential of the market.
Could you identify the wrong perceptions with which Indian poultry industry is plagued with?
There is a general perception harbored by the public that these chicken are fed with hormones in order to achieve a weight gain of 2 Kg within the growth period of 35 days, which needs to be countered. While the actual reason for such a good growth performance is due to the use of genetically superior breeds and excellent nutrition, by taking care of all the major, macro and micro nutrients, required for achieving such growth rate.
Antibiotics are now used for therapeutic purpose only and not as growth promoter like it used to be some years ago. This signifies the changing behavior of the industry. Because of govt. initiatives, the use of antibiotics is already restricted. In coming time, antibiotic will be completely extinct from the industry. To overcome the present situation of misconception among the consumers, industry players have to communicate through different means directly to the general public. They must make public aware of the fact that no hormones and no antibiotics are used for raising chicken.
What do you see in future of Indian poultry industry a few years down the line?
The main hurdle faced by the industry is that the availability and prices of raw material prices remain seasonal and cyclical. However, if GM raw materials are allowed in India, the production cost of eggs and chicken will be lower by 10%.
Global commodity market will remain flat for coming 6-8 months, because of good production estimation, specially for US crop. Due to increased harvesting area and favorable weather conditions, good bumper crop is expected in India as well.
What in your view is the scope for using alternative feed resources by the industry?
India is blessed with diversified oilseeds i.e. protein and energy sources. However, the limiting factors are economics and toxins and other contaminants that limit its use as feed raw material. Scientific research needs to be diverted towards the detoxification and the inclusion of alternate raw materials like rapeseed, cotton seed, mustard seed in poultry feed. Over-emphasizes of using soya has to be stopped.
What key decisions were taken by you to reach present status of the group?
After taking over Animal health business in 2007, the key decision was to sell the retail business to future group which was hitting the company hard. Another was to be in JV with Tyson-world’s largest meat processing company which brought technology including genetics and with expertise of both groups, Godrej-Tyson was made profitable in a time span of just 1 and half year. To grow the company further, we have recently done a 50-50 JV with Bangladesh feed mill which crossed 100 million dollar sales. Stepping stones for success of the group is short and long term planning for company and highly experienced team.
What do you have to say about feed industry’s future growth ?
Milk industry will grow by 5-6% CAGR in volume for next 10 years which means more processed milk will be converted into value-added products that should be @ 15-16% CAGR. Similarly, 5-6% CAGR is expected for egg and broiler industry. As processing in dairy and meat industry shall increase, the production capacity for the feed industry shall also grow proportionately.
Please throw some light on ‘Impact of GST on Poultry and Livestock industry’?
Mr. Adi Godrej, Chairman-Godrej Group believes that GST implementation might result in an increase of 1.5-2% in GDP. Overall taxation will come down in 3-4 years. It will make the industry more honest as input will match with output that will bring more transparency in the industry.