April 5, 2004

 

 

Thai Poultry Industry Shift Focus To Cooked Products

 

In the aftermath of the bird flu outbreak, leading poultry producers in Thailand are shifting their export focus from fresh to cooked products. Heavy investments have been ploughed into establishing hi-tech integrated manufacturing plants and farms to increase production capacity and meet international food safety requirements.

 

Major exporters include the country's top three - Saha Farm Group, Charoen Pokphand Foods Plc (CPF) and Betagro Group - which controlled about 50-60 per cent of total export volume of 550,000 tons last year. It is expected the country's total exports will reach 600,000 to 700,000 tons annually within a few years.

 

Manufacturing complexes now integrate all chicken businesses in the same or adjacent areas, including animal feed mills, farms for parent-stock of both broiler and layer baby chickens, slaughterhouses and processing plants. The strategy has been to ensure high quality "farm-to-table production" and to meet food safety requirements in importing countries. The investments were planned before 2002.

 

Despite being hit by the deadly virus twice from 2002 to 2004, the construction projects by those firms are ongoing and all will be completed this year.

 

The key players share the view that the completion of the complexes will double not only the country's production capacity but also exports. They have also suffered from an export drop, due mainly to the ban on Thai chicken exports early this year.

 

However, the crisis has passed and they have now restructured to focus more on cooked products rather than fresh chicken meat for export.

 

The Saha Farm Group, Thailand's largest exporter of chicken, has invested a total of Bt10 billion to double its chicken-meat output to 200,000 tons annually. It set up Golden Line Business Co (GLB) in 2002 to facilitate investment, and it expects to boost the group's market share of chicken exports to 40 per cent in 2004, said Ausawin Chotitawan, chief executive of GLB. GLB's plan involves nine related poultry businesses on 8,000 rai in the northern province of Phetchabun.

 

As a result of the investment, the company expects to be able to produce two million grandparent stock, 734,500 parent stock, and 60 million chicks each year. A feed mill facility will manufacture 60 tons of feed an hour, and 162 raising farms will supply 50 million broilers for a slaughterhouse with a capacity to kill 500,000 chickens a day.

 

The project also includes two processing plants to produce 7,000 tons a month of ready-to-eat meat, plus a veterinary medicine plant and a research centre. The group targets a doubling of export revenue to Bt20 billion this year.

 

Charoen Pokphand Foods Plc invested a total of Bt8.5 billion to build an integrated manufacturing complex in Nakhon Ratchasima.

 

The investment includes eight related businesses, a feed mill with an annual capacity of 1.2 million tonnes, 12 parent-stock farms with an annual capacity of 132-million eggs, a hatchery to hatch 110 million chicks per year, 30 broiler farms producing 52 million chickens per year, a slaughterhouse with daily capacity of 333,000 chickens, a processing line to produce 86,400 tons per year, and a sausage factory to make 40,500 tons per year.

 

Company president and chief executive Adirek Sripratak said the feed mill capacity would allow the company to become the biggest manufacturer in Asia.

 

In addition, the country's first computer management control system will be installed at the farms, enabling one worker to feed 100,000 chickens. The system, which uses computer and satellite control systems, is said to protect against animal epidemics and is best installed on closed-system farms.

 

The whole project is scheduled to be completed next year.

 

The Betagro Group, Thailand's third biggest broiler firm has drawn up a three-year expansion plan with a different objective from its two bigger rivals. It wants to expand its business to include swine products. As a result, Complex II was designed for both chicken and swine products. A separate processing line is set up in the same area.

 

Complex II comprises manufacturing plants for sausages, chicken bone extraction, a slaughterhouse for swine, swine goods manufacture and a feed mill - all on 1,000 rai.

 

Before 2002, the company's Complex I was set up on 200-300 rai in the same province and has operated feedmeal, slaughterhouse and two cooked chicken product processing plants.

 

Nopporn Vayuchote, executive vice president for business development, said Betagro was aiming to upgrade its broiler and swine farms to ensure food safety from farm to table and value-added manufacturing. Total slaughterhouse capacity is 350,000 chickens per day.

 

Other small to medium-sized exporters have also invested heavily during the past two years. They have learned that modern technology and good management will help them maintain export competitiveness and reduce business risks, particularly from disease epidemics.