October 14, 2011

Disease outbreaks drive unprecedented growth in Thailand's animal health sector
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By F.E. OLIMPO and Anan TRIDECHAPONG in Bangkok
Thailand's animal health sector expects total sales of THB23.6 billion (US$766 million) this year, an unprecedented 30% growth from last year's THB18.6 billion (US$604 million).
Dr. Chatchawan Orawannukul, president of Thailand's Animal Health Products Association, attributes the spike to a recent slew of disease outbreaks that drove demand for vaccines and other preventive medicines.
In the last nine months, the Thai livestock industry had already spent THB2.87 billion (US$93 million) on vaccines alone.
Most of these vaccines were used by the pig sector, which has been ravaged since late last year by an outbreak of the blue-ear disease, otherwise known as the Porcine Reproductive and Respiratory Syndrome (PRRS).  The epidemic was so pervasive it cut Thai pig production during the first half of the year by 30%. The shortfall has been responsible for the current high pork prices.
Although the outbreak has largely been contained, vaccination is still being carried out by most pig farms across the country to prevent the disease's resurgence.  Hence, by end of this year, Thailand's vaccine spending is expected to reach THB2.98 billion (US$98 million).
Aside from the blue-ear disease, the swine sector also had to deal with foot-and-mouth disease, swine fever and other health issues, which contributed to the demand for preventive medicines. In fact, the pig sector has spent THB4.7 billion (US$152 million) on drugs and feed supplements. It is followed by the poultry and shrimp sectors, which has spent THB3.6 billion (US$117 million) each so far.
Similar to the hog industry, the Thai chicken sector was struck by a major disease outbreak this year. In March and April, tens of thousands of chicken died from an outbreak of Newcastle disease in North-eastern Thailand. The epidemic caused a 10% drop in local broiler production, causing chicken prices to skyrocket almost simultaneously with those of pork.
The Newcastle outbreak, of course, was nothing compared to the 2004 bird-flu epidemic which almost killed Thailand's frozen chicken export. Before the contagion, the country was exporting about 330,000 tonnes of raw chicken a year mainly to Europe and Japan. The year after the bird-flu disaster, following a global ban on uncooked Thai chicken, its broiler export was down to about 4,000 tonnes.
Against this backdrop, Thai chicken producers were not taking any chances. This also explains why there has been an upsurge in health products' spending in Thailand's broiler sector.
Long before the current boom, however, Thailand's animal health industry had always enjoyed a good run. Until 2009, its growth rate was about 6% a year. While not phenomenal, it was the most respectable expansion rate among the animal health industries in the region.  Although it was only worth THB16 billion (US$519 million) in 2009, it was already the biggest animal health market share in the world, says Nackanun Chitaroon, the association's former president.
In the US, the market share of animal health products is less than 5% of the entire pharmaceutical sector. In comparison, according to him, the industry's share in Thailand is about 20-30%.
The kingdom's flourishing meat exports have been mainly responsible for the sales explosion. There is a downside to this, however.  Most of these animal care products are imported from over a dozen countries. What are produced locally are only premixes, which use imported ingredients just the same.
In enzymes alone, the country imports about THB1 billion (US$32 million) a year, mainly from European suppliers. Not surprisingly, Pfizer, the world's No.1 animal health products manufacturer, recently made Thailand its regional operations hub. In the last few years, Pfizer has been enjoying a 20% annual growth rate in the country. It is confident about its future in the country and expects to triple its sales in Thailand by 2015.
As a national strategy, Thailand hopes to minimise reliance on foreign products as quickly as possible. In the case of enzymes, for example, Thailand has started producing around 200 kg a year during the past two years. This is, of course, a drop in the bucket, considering the livestock industry's annual requirement of 5,000 kg.
Indeed, the country's ultimate goal is to be self-sufficient in everything, including enzymes.  Boasting the world's richest micro-organism biodiversity, Thailand believes it could cultivate new strains of enzymes, which by themselves are produced by living organisms. It has a long way to go but as the saying goes, a journey of a thousand miles always begins with the first step.

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