eFeedLink - Executive Talk: Salmet sees huge potential in Asia's poultry market

August 31, 2010

Executive Talk: Salmet sees huge potential in Asia's poultry market

An eFeedLink Exclusive

With more poultry farms in Asia transforming from open houses to closed houses, German-based poultry equipment manufacturer Salmet sees huge potential in the region's poultry sector as these farms will need the appropriate equipment to cater to the shift in operation.

Since 1962, Salmet has been developing, manufacturing and distributing poultry equipment to farms all over the world. With almost 50 years of experience, the company can be counted on offering high quality and innovative technological solutions as all systems are consistently being tested on its own farms before they are introduced to the market.

In the following interview, we catch up with Hichame Chafai, Regional Business Manager of Salmet, as he shares his view on the recently concluded Indo Livestock 2010 Expo & Forum as well as the company's future plans in Asia.

What do you think of this year's Indo Livestock Expo & Forum?

Personally, I think it has been a success for us as there have been a sizeable number of visitors to this year's exhibition. This year, we have visitors from Middle East and even North Africa, which indicates the growing significance of the Indonesian market. Nevertheless, the main audience to our booth are still the Indonesians and Malaysians. Compared to the previous edition two years ago, we can see that the Indonesians are more receptive as they get to better understand our products through time.

What are some of the future major developments do you foresee in Indonesia's poultry industry?

First and foremost, the market potential in Indonesia is immense, with the country having a population of 240 million people. Hence, I expect the consumption of eggs in Indonesia will continue to grow. In addition, I think the transformation of farms from the current open-house style to closed houses and tighter disease control and management will be another two important trends that we shall see in Indonesia in the future. However, it would require a period of time before they can be fully implemented.

In terms of market structure, what do you think are the differences between Asia and Europe?

I believe the biggest differentiating factor between these two regions is the disparity in regulation standards. In Europe, regulations are tight, especially if it has to do with food safety. Secondly, in the case of Indonesia, poultry producers here are still not fully ready to employ the usage of cage systems in their operations. Therefore, we are unable to distribute as many varieties of products in Indonesia like we do in Europe, where the receptivity and proportion of closed houses are generally higher.

One point to note is that demand for poultry equipment in Europe has not reached the saturation level. By 2012, all traditional cages in the EU should be replaced by enriched cages or alternative housing systems. With farmers having to change their old cages to newer versions, it will help to maintain the demand for poultry equipment at a relatively firm level in Europe.

Nonetheless, I believe bigger potential still lies in Asia as many farms here are still using A-frame systems or other traditional methods. If we can convince these farms to use more advanced equipment, Asia will become a region full of opportunities to poultry equipment manufacturers.

How are your products different from the others in the market?

Firstly, we are a German-based company, so naturally, our entire production process is done in Germany.

Secondly, the Zimmerer family, who owns Salmet, has business operations in farming as well. Therefore, they too, have plentiful experience in the farming aspect. In light of this, we qualify ourselves as not just manufacturers of cages, but farmers who also manufacture cages, which make us stand out from other manufacturers.

More importantly, we want farmers to see the advantages of operating in closed houses and we would like them to shift to closed-house farming so they will have better control of their operations in terms of disease management and temperature control etc. Furthermore, if they incorporate the use of cages like ours, they will have a larger production capacity and it will translate to better economic sense for them to continue the usage of Salmet-made cages.

Besides the abovementioned differences, Salmet also focuses on adapting to the needs of the market. For instance, we regularly conduct training and seminars in Indonesia so we can find out what difficulties the Indonesian farmers are facing and help offer solutions to them.

How do you think Salmet could further establish its presence in Asia?

In newer markets such as Indonesia, I believe accurate and timely dissemination of our product information is very important. Additionally, we need to be patient as there will be a lot of information for them to digest before they discover the advantages of our equipment. We also need to make our equipment presence felt by constantly engaging with different parties of emerging markets. Over time, they will be more familiar with our equipment and they will see the difference of our materials compared to the others.

What are your company's plans for the next few years?

Overall, Asia will be the main focus for us in the next few years, especially with China and India's economies on the rise. Indonesia will also be one of the key strategic locations for our company due to its huge potential.

Nonetheless, we know it will be a long process before demand for our poultry equipment begins to pick up in these markets. However, we want to make our presence felt from Day 1 onwards, and not when the market is already at its saturation point. If we are able to maintain a strong presence till the market matures, we will be one of the most recognizable brands. That is what we hope and that is also what we are going to achieve.