March 13, 2006

 

Vietnam's poultry sector under bird flu cloud: analysis

 

 

Vietnam's poultry sector, battered by bird flu, is divided on whether to slow down or charge ahead and revolutionise the industry.  Experts say now is the time to invest in modern integrated operations that promise more safety for workers and consumers.

 

A shift from family chicken coups to cutting edge factory farms would make both public health and business sense, as they may help farmers achieve higher returns on their investment, said Tony Forman, bird flu adviser for the UN Food and Agriculture Organisation in Vietnam.

 

Vietnam was once the epicenter of the bird flu virus, with 42 of the 97 known human deaths worldwide, occurring there. It has been 3 months since the last outbreak and four months since the last human case was reported, raising hopes that the curse of the bird flu may finally be over.

 

Still, the virus has affected poultry farmers that even the major players are hesitant about stepping back into the market.

 

US food giant Cargill for example, has closed a local chicken facility and slowed animal feed production.

 

Even animal feed market leader Proconco -- a Vietnamese subsidiary of the French group EMC, one of the few who turned a profit during the crisis by shifting to feed for pigs and aquaculture, is none too optimistic.

 

However, at least one producer, Thai company Charoen Pokphand (CP), is upbeat and insists now is the time to invest heavily. The company, which claimed it controls 80 percent of industrial poultry production in Vietnam, plans to double output to a million chickens a week by the end of the year and anticipates a 30 percent growth rate this year.

 

The Thai group is the supplier of the fast-food chains KFC and Lotteria and supermarket chain BigC, whose poultry sales were actually higher than last May.

 

The company said Vietnamese customers now buy more chickens processed by industries, because they are less likely to be contaminated during transport.

 

In the long term, CP wants to control the entire process, from egging to sales, a move that has the backing of the government.

 

The government will eventually promote the industrialization of the sector, said Patrice Gautier, Vietnam coordinator of Veterinarians Without Borders, with real results perhaps in five or 10 years.