August 10, 2010

Betagro eyes India's booming chicken industry

Thailand's leading chicken producer and exporter Betagro Group has been approached by a major chicken company in India to help develop meat production processes, with supplies from its slaughterhouse.

Betagro declined to name the company as talks are continuing, but it is said to be one of the top five chicken producers in India with about THB3 billion (US$93.8 million) in annual sales. The company operates chicken farms and a slaughterhouse with a capacity to produce 10,000 chickens to supply domestic markets.

Vanus Taepaisitphongse, Betagro chief executive, said the deal would match Betagro's objective to adapt its technological know-how and management expertise to fit particular markets.

Betagro Group executive vice-president Nopporn Vayuchote said that although the business outlook in India is promising, consumption per capita remains very low at 2.4 kilogrammes per head per year, compared with 9.6 kg in Thailand, and 10 kg in China.

"Some other major obstacles in the India chicken industry that we have observed are that the sales of live birds remain strong, resulting in slow expansion of slaughterhouse businesses. Furthermore, inadequate utilities, especially electricity in some cities, would impede meat processing production for which cold-chain supply is vital," he said.

But he expects these impediments will be overcome soon as economic growth props up chicken meat consumption.

The Mumbai-based diversified agribusiness company Godrej Agrovet predicted local chicken consumption would double to about 4.5kg to 5 kg by 2014-15 thanks to the rapid growth of dining out and expansion of quick-service restaurants.

It expects the rise will lead to big investment expansion by current players to process about 4.8 billion birds commercially in the next four to five years, from 2.4 billion today.

"Using the same concept [as with chicken], we could transfer our expertise and know-how in the meat industry for interested partners for some areas such as upstream, not the entire business through to downstream," he said.

Betagro's strategy is unlike that of the CP Group, which tends to make large investments from primary industry to finished products, he added.