December 27, 2011
Bangladesh's local poultry industry claimed that foreign poultry companies have appeared as their tough competitors riding on better banking and others.
Local poultry enterprises have urged the government not to allow foreign investment here as nearly 150,000 local farms have the capacity to meet the country's total demand for poultry meat and eggs.
"The foreign companies working in Bangladesh take loan at 4-5% rate from the overseas banks while local poultry farms get loan at 14-16% rate of interest from the local banks. It pushes our production cost up. Thus, we are in a disadvantageous situation," said a local poultry enterprise Chief Fazle Rahim Khan Shahriar.
He said if the government allows foreign companies in the country's poultry business, the local enterprises would be forced to close their operations in the near future.
Shahriar, chief of Aftab Bohumukhi Farm, told the FE that the entry of some nine foreign companies, especially the Indian ones, in Bangladesh has forced the local small, medium and large poultry enterprises into an uneven competition.
The government, over the last couple of years, allowed Indian leading companies like Venkitashire, Suguna, Amreeta, and Godrej to invest in Bangladesh.
Besides, Thai company CP, Chinese company New Hope and Hong Kong-based poultry enterprise Gold Coin are also working in Bangladesh.
Saidur Rahman Babu, General Secretary of the Breeders' Association of Bangladesh, said some foreign poultry companies are taking lease of the local medium-sized poultry farms.
"They import chicks from abroad in the name of the local companies which they have taken over. But they sell the birds commercially using their own brand name in the local market which is a kind of cheating with the Bangladesh's business policy," he said.
"Since the foreign companies' production cost is lower than ours due to their lower bank rate facilities and some other benefits that the government offer to them, we are facing tough competition with them," Babu said.
Mashiur Rahman, chief of Paragon Group, said it is very mysterious that the government is allowing foreign investment in the sector when the local poultry firms are trying to recoup their losses after a deadly bird flu attack in 2007-08 period.
The Aftab Bahumukhi Farm chief said the local poultry farms can produce 80-90 million one-day chicks per week which is higher than the total domestic demand for the same.
"But it is very interesting that the government has allowed some foreign companies, especially the Indian ones, ignoring the sustainability of the local poultry companies," he said.
Moreover, the Indian technology on the poultry industry is almost similar to that of Bangladesh which would not help bring any benefit to the local US$1.75 billion poultry industry, the Aftab Farm chief said.
The poultry industry, a major job creating sector, faced a loss of nearly BDT50 billion (US$613.7 million) because of the attack of Avian Influenza virus in the year 2007 and 2008 when some 2.5 million people became jobless.
Before the attack, investment in the sector was estimated at nearly BDT120 billion (US$1.5 billion) where some 3.5 million people were employed directly.
The Ministry of Fisheries and Livestock said there are about 150,000 poultry farms in Bangladesh, which produce 320,000 tonnes of meat and over five million eggs annually.