January 12, 2011

 

Betagro Group to upgrade supply chain

 

 

Betagro Group will spend THB3 billion (US$98.72 million) in 2011 to upgrade its supply chain and add capacity output to cash in on rising demand, according to local news.

 

A technician at the Betagro Science Centre conducts a quality test on feed and meat.

 

The improvements will also help it to achieve its ambitious goal of becoming a major supplier for premium-grade chicken and pork products.

 

Vasit Taepaisitphongse, the chief operating officer, said Betagro will raise chicken production to 410,000 birds a day, up from 370,000 last year.

 

The increased volume will help to serve growing demand, especially in exports, which are expected to expand 10% from last year's 40,000 tonnes.

 

"Export prices were high in last year's fourth quarter thanks to the strong yen and larger orders placed ahead of the festive season," said Mr Vasit.

 

He said chicken products shipped to Japan such as yakitori, or bite-sized grilled pieces on a skewer, earned Betagro US$7,000-$8,000 a tonne. That is far above the average export price for all processed chicken shipped from Thailand, which is US$4,500 a tonne.

 

The bullish prices in the fourth quarter helped offset weak first- and second-quarter prices due to slow domestic consumption that affected the company's 2010 sales projection.

 

Betagro reported sales of THB53 billion (US$1.74 billion) last year, up by 12% from 2009 but below the target of 15%.

 

The group is targeting more modest growth of 10% this year, expecting that high food prices driven by costly fuel prices and strong consumption worldwide will promote meat exports.

 

Thailand expects to export a total of 438,000 tonnes of chicken meat this year, up from an estimated 417,500 tonnes last year.

 

Exports of fresh meat have yet to recover fully from their collapse in 2004 caused by the bird flu outbreak, says Mr Vasit.

 

Europe and Japan are major importers of the product, accounting for 46.35% and 43.7%, respectively, of Thai export volume last year.

 

The country is the world's fourth-largest exporter of chicken meat, representing 4.7% of the global trade valued 8.66 million tonnes last year and dominated by Brazil at 3.35 million tonnes.

 

The Thai Broiler Processing Exporters Association expects export prices will increase by US$300-$500 a tonne this year due to higher feed costs driven by more expensive corn and soy waste. Traders foresee exchange rate volatility and rising wages will remain negative factors in this labour-intensive industry.

 

Mr Vasit said exports of fresh meat have yet to recover fully from their collapse in 2004 caused by the bird flu outbreak.

 

Despite good prospects for raw meat, many processors including Betagro put more effort into making and selling cooked products instead.

 

Many processing facilities at Betagro's Lop Buri production hub will be upgraded this year for higher-quality meat production that could raise its profile as a premium food producer.

 

Betagro's recent launch of hygienic eggs received a good response despite the product being priced three times higher than normal eggs.