MLBA15: June /  July 2010

 

 

 

 

Potential comes from a region with 500 million people, where per capita meat consumption is set to double over the next 17 years, amid 1.5% annual population growth and consistently strong rises in per capita meat consumption.

 

Momentum comes from Thailand, where home grown state-of-the-art integrators combine facilities technically superior to many found in the west with a far lower cost base. Some firms such as CP and Betagro are now exporting not just their meat but capital, technical equipment, management techniques and know-how to less advanced but hungry markets in eastern Europe, the middle east and Asean's fast growing hinterland countries.

 

The pace of development was recently given a further boost by this year's Asean Free Trade Agreement (AFTA) liberalisation. While investment decisions that assumed AFTA's inevitability were made far in advance of the agreement's inauguration, the agreement is giving new life to long-established but sleepy Philippine integrators. Gaining confidence after decades of domestic political and economic stability, they are waking up to a new world.

 

On one hand, their Thai competitors have certainly gained an advantage by outrunning them for nearly three decades. At the same time, their large domestic market, deep pockets and pre-existing integration is giving Philippine meat processors a unique opportunity to expand their predominance, both in the Philippines and abroad.

 

While they come from very different development backgrounds, both Thai and Philippine integrators are beset by challenges. Thailand has still not fully recovered from a bird flu epidemic that resulted in its raw chicken exports being banned long after the crisis was fully managed.