Poultry Sector in South East Asia - Iowa Economic Development [PDF]

Poultry Sector in South East Asia Iowa Economic Development Authority

March 2017

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Poultry Sector in South East Asia

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Poultry Sector in South East Asia

Table of Contents 1. Introduction ............................................................................................................................ 1 2. Malaysia ..................................................................................................................................4 2.1 Country Profile ........................................................................................................................ 4 2.2 Poultry Market ........................................................................................................................ 5 2.2.1 Key Developments ........................................................................................................... 6 2.2.2 Key Poultry Processing Areas ........................................................................................... 7 2.3 Useful Information .................................................................................................................. 9 2.3.1 Associations ...................................................................................................................... 9 2.3.2 Trade shows ..................................................................................................................... 9

3. Indonesia .............................................................................................................................. 10 3.1 Country Profile ...................................................................................................................... 10 3.2 Poultry Market ...................................................................................................................... 11 3.2.1 Key Developments ......................................................................................................... 12 3.2.2 Key Poultry Processing Areas ......................................................................................... 13 3.3 Useful Information ................................................................................................................ 15 3.3.1 Associations .................................................................................................................... 15 3.3.2 Trade shows ................................................................................................................... 16

4. Thailand ................................................................................................................................ 17 4.1 Country Profile ...................................................................................................................... 17 4.2 Poultry Market ...................................................................................................................... 18 4.2.1 Key Developments ......................................................................................................... 19 4.2.2 Key Poultry Processing Areas ......................................................................................... 21 4.3 Useful Information ................................................................................................................ 24 4.3.1 Associations .................................................................................................................... 24 4.3.2 Trade shows ................................................................................................................... 24

5. Philippines............................................................................................................................ 25 5.1 Country Profile ...................................................................................................................... 25 5.2 Poultry Market ...................................................................................................................... 26 5.2.1 Key Developments ......................................................................................................... 27 5.2.2 Key Poultry Processing Areas ......................................................................................... 28 5.3 Useful Information ................................................................................................................ 30 5.3.1 Associations .................................................................................................................... 30 5.3.2 Trade shows ................................................................................................................... 30

6. Vietnam ................................................................................................................................ 31 6.1 Country Profile ...................................................................................................................... 31 6.2 Poultry Market ...................................................................................................................... 32 6.2.1 Key Developments ......................................................................................................... 33 6.2.2 Key Poultry Processing Areas ......................................................................................... 34 6.3 Useful Information ................................................................................................................ 35 6.3.1 Associations .................................................................................................................... 35

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Poultry Sector in South East Asia 6.3.2 Trade shows ................................................................................................................... 35

7. References ........................................................................................................................... 36 7.1 Malaysia ............................................................................................................................ 36 7.2 Indonesia ........................................................................................................................... 36 7.3 Thailand ............................................................................................................................. 36 7.4 Philippines ......................................................................................................................... 37 7.5 Vietnam ............................................................................................................................. 37

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Poultry Sector in South East Asia

1. Introduction This report provides information on the poultry sector for the five key markets of South East Asia, namely Malaysia, Indonesia, Thailand, Vietnam and the Philippines. These 5 key countries, together with Singapore, Brunei, Myanmar, Laos and Cambodia, have joined forces to form the ASEAN Economic Community (AEC), which aims to create a common market and production base. The AEC promotes the flow of goods, services, investments, skilled labor, and capital across the region – with a view to creating single market, and offers opportunities in the form of a huge market of US$ 2.5 trillion and over 625 million people. The region is the third largest economy in Asia and the seventh largest in the world. Despite the backdrop of weak external demand, South East Asia saw a steady growth of 4.7% in 2016, a slight pick-up from 2015’s 4.5%.

Figure 1: ASEAN Economic Community

Asia will be the driver of increasing global poultry consumption in the future. Poultry consumption around the world is predicted to grow by 27% to 28 million tons by 2023 - with 40% of that growth in Asia. In Southeast Asia, the combination of growing per capita incomes, population growth and urbanization translated into a growth of demand for animal products. The surge in demand for animal protein resulted in a significant increase of meat – mainly poultry and pork. Poultry is the largest livestock sector in Malaysia, Thailand, and Indonesia.

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Poultry Sector in South East Asia The expansion of poultry production in South East Asia (SE Asia) is occurring within a framework of large-scale commercial farms and intensive livestock operations. Contracting between producers and private industry, particularly feed companies, is now an extremely important element of the broiler industry. However, poultry production cost in the region are high due to imported feeds and lack of efficiency and technology in production. Experts have noted that future success of the poultry industry in the South East Asia will depend on its ability to manage costs in addition to controlling avian influenza, and boosting consumer confidence in the safety and benefits of poultry meat.

Values in USD

1,600,000

1,458,049

1,400,000 1,200,000

1,083,634

1,000,000 800,000

879,408 686,385

674,732

600,000 400,000 200,000 2012

2013

2014

2015

2016

Figure 2 Iowa Poultry Export to SE Asia Source: census.gov

Poultry imports in South East Asia predominantly come from the US, EU, Australia and Brazil. For most exporters, there is still a learning process to go through in terms of maximizing both market access and price for products in the Asian market. Responding to local importer specifications (packaging, trimming, presentation, etc.) is important in gaining repeat trade at the best prices, especially with an increasing number of players competing in the markets.

Report Content & Structure This report has been created by Orissa International Pte Ltd for Iowa Economic Development Authority (IEDA). The report aims to discuss the current trends and issues that dominate the poultry industry of Malaysia, Indonesia, Thailand, Vietnam, and the Philippines. For each market, we offer a country profile and general overview of the poultry sector followed by key topics

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Poultry Sector in South East Asia affecting the country’s poultry production. It is then followed by a list of associations and tradeshows for each market.

Research Methodology Orissa International’s research in each country is managed by an in-country Trade and/or Research Manager. Our on the ground research teams bring fluency in local languages, physical proximity to the best sources, an ability to engage directly with local industry contacts, and an awareness of commercial opportunities in the market. Orissa International undertakes desk research to gather as much secondary data and information from a variety of available and credible sources including but not limited to our proprietary databases, specialist trade press, business and mainstream press, industry news and events, market studies, financial reports, regulatory filings, trade associations, as well as company profiles, publications, and annual reports. Orissa International applies processes and series of quality checks to validate data and information to ensure the accuracy and integrity of the report.

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Poultry Sector in South East Asia

2. Malaysia 2.1 Country Profile Malaysia is a South East Asian country made up of a land area of 330,290 sq. km and is home to over 30.5 million people. West Malaysia, consists of eleven states and two federal territories, while East Malaysia consists of the states of Sabah and Sarawak, and a federal territory.

Total Land Area:

330,290 sq. km. GDP

USD 294,390 Million Form of Government

Federal Monarchy Headed by a Prime Minister

Employment Distribution in Key Sectors GNI per capita (% of total employment) Malaysia’s recorded a GDP of US$ 294.4 USD 10,570 13 Agriculture Agriculture billion in 2015, with nominal GPD per Services 28 13 GDP per capita, nominal IndustryIndustry 59 capita of US$ 9,657. Early estimates USD 9,657 59 Services 28 GDP per capita, PPP indicate the economy grew by 4.2% in USD 26,515 2016, while projections for 2017 range between 4 and 5%. The Malaysian Ringgit fell for the fourth consecutive year, by 4.3% against the US$ in 2016 after an 18.5% plunge in 2015.

The services sector contribution to GDP in 2015 was 56.1%, while industry contributed to 35% to GDP, and agriculture 8.9%. The services sector employs 59% of the workforce. Trade Overview (USD millions) Balance of Trade

USD 23,908 million 175,961

208,850 Import 2015 199,869 Export 175,961 Import

208,850

233,927 Export 199,869

233,927

2014

USD 23,908 million

Foreign Direct Investment USD 11,290 Million net inflow Export

Import 2014

2015

USD 11,290 Million net inflow

The country’s total trade in 2015 decreased by 15.1% from 2014 as both its export and import values fell. Malaysia recorded an export value of US$ 199.87 billion in 2015, while imports in 2015 were valued at US$ 175.96 billion. However, the country’s FDI net inflow increased to US$ 11,290 million in 2015 from US$ 10,877 in the previous year.

The World Bank has ranked Malaysia at the 23rd spot in the World Bank’s Doing Business Rank for 2017, one spot lower than its position in 2016. The slip was primarily due to a drop in performance in the ‘Starting A Business’ and ‘Paying Taxes’ categories. Nevertheless, Malaysia remains among the top 20 most competitive economies worldwide. Among ASEAN countries it is trailing only Singapore, which has been ranked 2nd in the same survey.

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Poultry Sector in South East Asia Table 1: Ease of doing business in Malaysia 2017 Rank Starting a business

2016 Rank

Change in Rank

112

59

- 53

13

13

No change

8

7

-1

Registering property

40

39

-1

Getting credit

20

29

+9

3

3

No change

Paying taxes

61

59

-2

Trading across borders

60

58

-2

Enforcing contracts

42

40

-2

Resolving insolvency

46

45

-1

Dealing with construction permits Getting electricity

Protecting minority investors

Source: World Bank

2.2 Poultry Market The Malaysian poultry industry has undergone a transformation over the last decade. Chicken production has increased, and small-scale producers have been largely replaced by integrators. Output is expanding slowly, in line with expectations for domestic demand growth. As a major producer of poultry in the Asia Pacific region, the country is self-sufficient. Currently, Malaysia is exporting live birds and processed poultry products to Singapore and some Middle East countries. Although the industry has the capacity to grow further, rising costs of production are limiting growth as almost all feed input such as soybean meal and corn, which account for 65% of the production cost, are imported. A reduction in fuel subsidies, depreciation of Malaysian ringgit, and implementation of minimum wages in 2013 were also factors that have led to higher production costs in the country’s poultry industry.

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Poultry Sector in South East Asia

2.2.1 Key Developments Consumption Poultry meat is a stable protein in the Malaysian diet due to higher priced beef and a large Muslim population. The country’s poultry meat per capita consumption is among the highest in the world. Malaysians consume 1.8 million chickens and 2.8 million chicken eggs daily. Table 2: Per Capita Consumption of Poultry Meat

Year

Per Capita Consumption in Kilogram

2010

43.3

2011

43.6

2012

44.4

2013

46.5

2014

49.8

2015

50.7

Source: Department of Veterinary Service

Broiler Production Integrated broiler contract farming is one of the systems used to increase poultry production in Malaysia. Broiler production is increasing every year due to higher demand by local consumers and export markets. Integrated broiler contract farming also dominates as much as 75% of the national broiler production in the country, without which shortage of chicken in the market would be possible. Table 3: Integrated Broiler Farms by State

Source: Department of Veterinary Service

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Poultry Sector in South East Asia Development Strategies The Federation of Livestock Farmers’ Association of Malaysia, whose role is to maintain good agricultural practices and compliance in the country, has announced plans to raise poultry production efficiency and technology in the country. The association also encourages modernization of Malaysian farms that will include transformation into closed house system in addition to improving hygiene standards. The association aims to make its poultry products that are sold locally to be good enough for export and to build consumer confidence in local poultry. Foreign Investments Global companies such as Cobb Vantress and Big Dutchman continue to expand and strengthen its position in Malaysia by constructing additional poultry farms that can increase production capacity as well as building state-of-the-art facilities and imposing strict biosecurity standards. These aims to meet the expected growth of the poultry industry not only of Malaysia, but of the Southeast Asian region.

2.2.2 Key Poultry Processing Areas Table 4: Key Processing State and Poultry Population

State

Poultry Population, 2015

Perlis

1,240,122

Kedah

53,862,440

Pulau Pinang

12,933,963

Perak

37,677,871

Selangor

21,552,281

N. Sembilan

21,361,940

Melaka

20,687,676

Johor

66,912,863

Pahang

15,721,309

Terrengganu

6,324,664

Kelantan

1,811,088

Sabah

5,691,950

Sarawak

42,346,698

Grand Total

308,124,865

There are thirteen poultry-producing states in Malaysia according to the Department of Veterinary Service. Johor has one of the densest chicken population in the country, with more than 66 million birds. On the other hand, Kedah, Pulau Pinang and Perak are the top broiler producing states, which account for 60% of total farmers involved in integrated broiler contract farming in Peninsular Malaysia. Almost 90% of production occurs in Peninsular Malaysia, with the rest in East Malaysia. In terms of bird numbers, commercially bred broilers comprise 67% of the total, while layers make up around 25% and breeders make up 8% of the total. Peninsular Malaysia consists of Perlis, Kedah, Perak, Kelantan, Terrengganu, Pahang, Selangor, N. Sembilan, and Johor.

Source: Department of Veterinary Services

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Poultry Sector in South East Asia Peninsular Malaysia has about 3,200 broiler farms, including contract and independent farmers, as well as large vertically integrated farms. Of all livestock products sold in Peninsular Malaysia, broiler meat is the main type that is consumed for cultural and religious reasons. Almost all the broilers are derived from Cobb and/or Ross breeding lines. Backyard and free-range poultry production has declined significantly, and their commercial production is insignificant.

Table 5: Number of Farm Companies in Peninsular Malaysia 4 Grand Parent Stock Farm Companies 23 Broiler Parent Stock Farm Companies (79 farms) 5 Layer Parent Stock Farm Companies (20 farms) approximately 340 Layer Farms approximately 3,200 Broiler Farms Source: Department of Veterinary Service

About 65 to 70% of the output of live broilers is sold directly to wholesalers, while the remaining 30 to 35% is channeled to processing plants which sell the dressed broilers directly to restaurants, hypermarket chains or to wholesalers and retailers. Major Malaysian poultry companies have processing plants located in cities such as Negeri Simbalan, Perak, Port Klang, Penang, Johor, and Selangor. The Ayamas plant in Port Klang, Malaysia, is the largest poultry processing plant in the country. It is equipped with modern equipment which processes more than 80,000 birds per day and 2,000 metric tonnes of further processed poultry products per month.

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Poultry Sector in South East Asia

2.3 Useful Information 2.3.1 Associations Department of Veterinary Services Malaysia Address: Wisma Tani, Block Podium, Lot 4G1, Precinct 4 Federal Government Administrative Center, 62624 Putrajaya Malaysia Website: www.dvs.gov.my Phone: +60 38870 2000 Email: [email protected] The Department of Veterinary Services Malaysia was created to expand livestock production and animal health. It also does research on animal diseases and animal genetic sources in addition to controlling animal welfare and animal genetic materials. The Department also inspects meat, milk, eggs, animal feed, abattoirs, and veterinary product processing plants. Federation of Livestock Farmers' Associations of Malaysia Address: 93 A Jalan SS 15/5A, Subang Jaya, 47500, Petaling Jaya, Selangor, 47500, Malaysia Website: NA Phone: +60 5633 6955 Email: [email protected] The Federation of Livestock Farmers' Associations of Malaysia (FLFAM) exists as a registered body in Malaysia with the aim to safeguard the welfare and interest of farmers, livestock producers and consumers. By liaising with regional livestock associations varying in types of livestock and supply chain steps and communicating regularly with the government agencies, FLFAM ensures the interest of the industry is considered in policy making with in tandem with the quality of its final products for consumption.

2.3.2 Trade shows Livestock ASIA Date: 19-21 April 2018 Venue: Kuala Lumpur Convention Center, Malaysia Website: www.livestockasia.com Livestock ASIA is the leading event for the feed, livestock and meat industries in the region. The event is expected to attract more than 7,000 local, regional and international trade visitors and delegates, representing integrators, veterinarians, livestock farmers, feed millers, wholesaler, retailers, and food processors.

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Poultry Sector in South East Asia

3. Indonesia 3.1 Country Profile Indonesia, South East Asia’s largest economy, has an estimated total population of 255.5 million, making it the world’s fourth most populous country. Spread across a chain of thousands of islands, its total territory includes 1.9 million square km of land and 5.8 million square km of water.

Total Land Area:

1,913,579 sq. km. GDP

USD 857,603 Million Form of Government

Democratic Headed by a President

Employment Distribution in Key Sectors GNI per capita

(% of total employment)

USD 3,440

35 Agriculture

GDP per capita, nominal

Agriculture Services 22 Industry 35 43

Indonesia recorded a GDP of US$ 857.6 USD 3,357 43 Services Industry 22 GDP per capita, PPP billion in 2015, representing 1.3% of the USD 11,108 world’s economy. Indonesia’s economy alone makes up nearly half of ASEAN’s total economic output. Early estimates indicate that its GDP grew by an approximately 5% in 2016 and the country’s central bank forecasts growth in 2017 to range between 5.1 and 5.2%. Indonesia has a young, growing and rapidly urbanizing population that makes the country one of the fastest growing consumer markets in the world. Its gross National income (GNI) per capita is US$ 3,440. The Services sector employs 43% of its workforce, while Agriculture employs 35% of it, and Industry 1%. Trade Overview (USD millions) Balance of Trade

142,695

178,179

178,179 Import 2015 150,282 Export 142,695 Import

150,282

176,293

2014 176,293 Export

USD 7,587 million

USD 7,587 million

Foreign Direct Investment USD 16,073 Million net inflow Export

Import 2014

2015

USD 16,073 Million net inflow

Indonesia recorded a US$ 7.6 billion trade surplus in 2015, a significant improvement from the US$ 1.9 billion trade deficit in the preceding year. 2016 saw imports decrease by 19.9% to US$ 142.7 billion (from US$ 178.2 billion in 2014) while exports also fell by 14.8% from US$ 176.3 billion in 2014 to US$ 150.3 billion in 2015.

Total FDI in 2016 was US$ 28.9 billion, slightly lower than the US$ 29.3 billion recorded a year earlier. Indonesia ranks 106th in the latest Doing Business Rank report of the World Bank for 2017. The country went up by 15 places from 106 to 91, and is among the top 10 biggest climbers. Indonesia’s overall improved performance in the 2017 report is attributed to the government’s efforts to simplify and remove unnecessary regulations.

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Poultry Sector in South East Asia Table 6: Ease of doing business in Indonesia 2017 Rank

2016 Rank

Change in Rank

Starting a business

151

167

+16

Dealing with construction permits

116

113

-3

49

61

+12

118

123

+5

Getting credit

62

70

+8

Protecting minority investors

70

69

-1

Paying taxes

104

115

+11

Trading across borders

108

113

+5

Enforcing contracts

166

171

+5

Resolving insolvency

76

74

-2

Getting electricity Registering property

Source: World Bank

3.2 Poultry Market Indonesia’s demand for poultry meat is expected to continue growing, primarily driven by the growing purchasing power of the country’s expanding middle class. Poultry production in the country has been increasing and, according to public private partnership FoodTechIndonesia, Indonesian poultry production is estimated to have been worth EUR10 billion (US$11 billion) in 2015 with broiler meat accounting for approximately three-quarters of the total. The poultry meat sector is projected to grow 70 to 90% by 2020 if GDP increases by 6% per annum. The layer industry is also projected to grow at around 50 to 60% of the broiler sector. Indonesia’s commercial chicken flock is estimated at 3.5 billion broilers, 200 million layers, and 24.8 million breeders in 2015. Per capita poultry meat and egg consumption in Indonesia remain low compared with neighboring countries such as Thailand and Malaysia. Additionally, there is still a strong demand among Indonesia’s consumers for live, rather than processed poultry.

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Poultry Sector in South East Asia

3.2.1 Key Developments Consumption Indonesia still has relatively lower meat consumption per capita compared to other Southeast Asian countries. However, demand is rapidly increasing and poultry meat is the leading source of protein in the country, accounting for approximately 87% of total meat consumption. In addition, key drivers of growth in the country’s poultry market are population growth and urbanization level.

Figure 3: Poultry per capita consumption Source: Rabobank

Poultry Oversupply Over the past few years, supply has outpaced demand, causing day-old chick (DOC) prices to plummet. A combination of over-investment (i.e. over-importation of grandparent stock (GPS), despite being regulated by the government’s quota system) and weaker purchasing power (lower commodity prices, higher cost of living due to subsidy removal, and a weaker rupiah) led to an oversupply of DOC by 20-30% in 2014. To address the oversupply, the Indonesian government coordinated a mass culling of six million parent stock which account for half of the country’s broiler replenishment. Four million grandparent stock were culled in Q4 2015, with another two million eliminated in Q1 2016.

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Poultry Sector in South East Asia Table 7: Annual Broiler DOC (million heads)

Year

Demand

Supply

2012

1,660

1,800

2013

1,970

2,200

2014

2,100

2,500

2015

2,500

3,000

2016

2,650

3,250

Source: USDA FAS

Poultry Farming System Indonesia’s poultry farming system is slowly transitioning from intensive, open-housed system farms to closed-house, automated housing system farms. This change is the result of increasing poultry market competitiveness, characterized by increasing labor costs, the quest for higher yields, and disease pressures such as highly pathogenic avian influenza (HPAI).

3.2.2 Key Poultry Processing Areas The poultry industry is spread throughout Indonesia, with significant egg production in East Java, a reflection of the availability of locally grown corn and the ease of transporting eggs from to the markets in West Java. Broiler production is countrywide but focused in West Java (Bandung), close to its fresh bird markets that lack an adequate cold chain. Village poultry exists across Indonesia.

Figure 4: Relationship between Broiler, Egg, and Wet Corn Production by Region Source: USAID

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Poultry Sector in South East Asia Broiler and egg production, by region, is highly correlated to the population. This has evolved due to the historical demand for live birds—which cannot be transported efficiently over even medium distances in Indonesia due to high temperatures and poor road infrastructure—and high demand for fresh eggs. The development of the industry therefore follows the development of the wet markets around the large populations of West, East and Central Java.

Table 8: Broiler Population in Key Cities (heads) Province

2012

2013

2014

2015

2016

West Java

610.436.303

645.229.707

643.321.729

631.154.917

644.923.995

East Java

155.945.927

162.296.157

179.830.682

194.064.874

196.393.653

Central Java

76.906.291

103.964.760

108.195.894

126.102.735

128.105.648

South Kalimantan Banten

40.603.189

51.860.699

57.727.521

64.657.853

82.731.607

54.151.644

61.230.844

63.324.448

74.903.983

75.342.281

Source: Director General of Livestock Services

Java is the largest producer of chicken meat in Indonesia. The poultry farms in Java are supported by 25 animal feed factories or the largest in the country located in Banten, Jakarta, West Java and East Java. The fact that Java is the largest market for chicken meat has boosted the growth of chicken farms and production in the island. The largest chicken meat production center is West Java, accounting for 40% of the total production in Java, followed by East Java accounting for 37% and Central Java for 21%. West Java is the largest producer of pure bred chickens, but the largest producer of free range chickens is East Java mainly the districts of Lamongan, Malang, Blitar, Probolinggo, Tulungagung and Trenggalek. Table 9: Broiler Meat Production in Key Cities (in tons) Province

2012

2013

2014

2015

2016

West Java

498.862

563.529

543.765

530.423

529.932

East Java

162.845

162.892

198.016

203.139

208.218

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Poultry Sector in South East Asia Central Java South Kalimantan Banten

114.178

123.726

130.357

158.673

163.252

36.177

55.032

46.511

60.952

81.092

111.159

109.029

96.554

73.488

73.918

Source: Director General of Livestock Services

Production and supplies of DOCs are dominated by a few big players that control integrated industry like Charoen Pokphand and Japfa Comfeed. The big players control the business from the upstream sector (animal feed production and breeding), to the midstream sector (commercial poultry farms) and downstream sector (chicken slaughterhouse and chicken meat processing). In the commercial poultry farming, they are involved in partnerships so that they do not have to own lands and build chicken coops themselves. According to the Indonesian Poultry Slaughterhouses Association, there are a total of 130 chicken processing plants and slaughterhouses in the country. Of the figure, the number of chicken processing plant is less than 100, with the number of grade A and B plants no more than 30. Major poultry integrators in the country such as Charoen Pokphand and Japfa Comfeed have processing plants in the cities of Banten, Medan, Sidoarjo, Surabaya, Pekanbaru, Banjarbaru, Lampung, Bogor, Pabelan, Grobogan, and Bali.

3.3 Useful Information 3.3.1 Associations Perhimpunan Insan Perunggasan Rakyat Indonesia (PINSAR) Address: Jl. Raya Imam Bonjol 34 G, Tangerang 15115, Indonesia Website: www.pinsarindonesia.com Phone: +62 21 5366 1847 Fax: +62 621 5520 753 Email: NA Perhimpunan Insan Perunggasan Rakyat Indonesia is the biggest poultry association in Indonesia. It is a partner of the government in deciding policies for the poultry industry. The association includes some of the major poultry companies in Indonesia, namely Chaoren Pokphand and JAPFA Comfeed.

Perhimpunan Peternak Unggas Nusanatara (PPUN) Address: BSD City Golden Vienna I, Blok B - 4 No. 10, Kencana Loka, Tangerang, Indonesia 15 © 2017 by Orissa International. All rights reserved. Permission to reproduce is required

Poultry Sector in South East Asia Website: www.ppunbogor.blogspot.co.id Phone: +62 21 9286 5709 / +62 21 7424 713 Fax: +62 21 7587 5513 / +62 21 7424 713 Email: NA Established in 2001, this association's purpose is to be a platform of communication for smallmedium sized poultry farmers. The association arranges meeting to discuss poultry issues in the country. It also organizes activities that campaigns for poultry nutrition.

3.3.2 Trade shows ILDEX Date: 18-20 May 2017 Venue: JIEXPO, Jakarta, Indonesia Website: www.ildex-indonesia.com ILDEX Indonesia is a trade fair for livestock, dairy products, meat processing and aquaculture. This event also brings international expertise to satisfy the needs of the local livestock industry. Exhibitors in this tradeshow are involved in animal feed and animal health, genetics and breeding, and traders, among others.

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Poultry Sector in South East Asia

4. Thailand 4.1 Country Profile Thailand sits on South East Asia’s Indochina Peninsula, and borders by Myanmar, Laos, Cambodia, and Malaysia. The country has an estimated population of around 68.8 million and GDP of US$ 395.7 billion in 2015. Its nominal GPD per capita in 2015 was US$ 5,737 or US$ 16,074 GDP per capita at PPP.

Total Land Area:

513,120 sq. km. GDP

USD 395,726 Million Form of Government

Constitutional Monarchy Headed by a Prime Minister

Employment Distribution in Key Sectors GNI per capita

(% of total employment)

USD 5,620

40 Agriculture

GDP per capita, nominal

Services Agriculture 21 Industry 39 40

USD 5,737 39 Services Thailand, the world’s 32nd largest Industry GDP per capita, PPP 21 economy and the second largest USD 16,064 economy in ASEAN, accounts for 17% of ASEAN’s GDP. Its economy is estimated to have expanded by 3.2 – 3.3% in 2016, and for now, the government estimates that growth will be 3.4% in 2017.

The country’s Agricultural sector is the largest employing sector, employing 40% of the total workforce, followed by Services (39%), and the Industrial sector (21%). Trade Overview (USD millions) Balance of Trade

227,952

227,952 Import 2015 214,396 Export 202,751 Import

USD 11,645 million

USD 11,645 million

202,751

214,396

227,574

2014 227,574 Export

Export

Import 2014

2015

Foreign Direct Investment USD 8,027 Million net inflow

USD 8,027 Million net inflow

Thailand’s trade balance reached US$ 11.645 billion in 2015, its first surplus after four straight years of deficit. The country’s overall exports were US$ 214.396 billion in 2015, with the US as its top export market. Exports grew only marginally, by 0.45% in 2016.

Imports fell by 11.1% in 2015, the highest contraction since 2009. The country’s FDI inflow in 2015 increased to US$ 8,027.5 million from US$ 3,720.2 million in the previous year. Thailand currently ranks 46th in the World Bank’s latest Doing Business Rank for 2017. The country’s ranks 3rd among the ASEAN countries, behind Singapore and Malaysia. According to the World Bank, Thailand is steadily making progress to ease the process of doing business and it continues to focus on reforms to promote a better business environment, in addition to implementing public infrastructure investments, developing skilled-workers through quality education, and promoting innovations.

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Poultry Sector in South East Asia Table 10: Ease of doing business in Thailand 2017 Rank

2016 Rank

Change in Rank

Starting a business

78

93

+15

Dealing with construction permits

42

38

-4

Getting electricity

37

34

-3

Registering property

68

67

-1

Getting credit

82

97

+15

Protecting minority investors

27

25

-2

109

106

-3

Trading across borders

56

54

-2

Enforcing contracts

51

51

No change

Resolving insolvency

23

26

+3

Paying taxes

Source: World Bank

4.2 Poultry Market Thailand is one of the world’s leading producers of agricultural commodities. Its poultry industry is the largest in Southeast Asia and is home to major local and foreign players. Over the past four decades, Thailand’s poultry sector has transformed itself from backyard farming into a leading poultry exporter. Due to the potential growth in export demand, driven by the robust prices for live broilers and chicken meat, as well as the anticipated increase in chick production capacity, Thai chicken meat production is forecast to increase by 5-7% in 2017. Thailand's poultry industry has successfully recovered from the avian flu outbreak in 2004 and has returned to dynamic growth. A positive outcome from the outbreak was that it forced the Thai poultry industry to adopt new farming practices and farming facilities. With its new industry structures, Thailand is expected to increase its production capacity and remain a recognized leader in global poultry exports.

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Poultry Sector in South East Asia

4.2.1 Key Developments Domestic Consumption Reflecting trends in the tourism industry and an anticipated recovery of the Thai economy, domestic consumption of chicken meat is forecasted to increase by 4-5% in 2017. Although recent trends have shown Thais moving toward a big-city lifestyle and away from traditional practices, most Thais still buy fresh chicken meat from traditional markets. This accounts for about 60-70% of the total domestic chicken meat sales. In addition, trade sources also expect chicken meat consumption in the ready-to-eat and quick service restaurant sectors to continue to grow annually for the next few years. Table 11: Thailand Broiler Meat (Poultry) Domestic Consumption by Year

Market Year

Domestic Consumption (in 1000 MT)

Growth Rate

2012

932

7.87%

2013

1,039

11.48%

2014

1,050

1.06%

2015

1,080

2.86%

2016

1,117

3.43%

2017E

1,167

4.48%

Source: Index Mundi

Export Trends Global chicken consumption continues to grow as chicken is cheaper than other meats. The prospect of the Thai frozen and processed chicken industry in the next 1-3 years is promising, underpinned by the country’s continuing export market growth of 10-15% per year. The outbreak of the avian flu in many countries will also enhance the export opportunity for Thai chick chickens to continue to expand, especially to Japan, a major export country for Thai poultry together with the European Union.

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Poultry Sector in South East Asia Table 12: Expected Chicken Meat Exports of Thailand 2016

Source: Thai Broiler Processing Export Association

Technology In recent years, animal welfare practices and technology have become extremely important in many western countries. As a major poultry exporter, Thailand has been moving away from contract farming and towards vertical integration in order to ensure compliance with European importers’ more stringent requirement. This opens up opportunities for equipment and technology used in the whole chain process such as automated systems, food safety, and animal well-being.

Trade Development Thailand’s poultry prospects are looking more promising due to the resumption of fresh poultry imports by many countries, after Thailand’s bird flu outbreak was brought under control. South Korea, in particular, has already lifted a 12-year ban on Thai chicken imports that is expected to increase Thai’s poultry trade by 3% in 2017.

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Poultry Sector in South East Asia

4.2.2 Key Poultry Processing Areas The major broiler producing provinces can be divided into different groups. The first group include the key provinces Nakorn Ratchasima (or Korat), Burirum, Surin, Prachinburi and Lopburi. The second group includes Chonburi, Chachoengsao and Ayudhaya in the Central and East region. Recently, broiler production has been expanded to the eastern provinces Saraburi and Suphanburi in the Central West. Moreover, Chachoengsao, Ayudhaya and Nakorn Nayok are also the major producing provinces on layer for hen egg production. Table 13: Broiler production in Thailand by region

Source: IPSOS Business Consulting

There are two main species of poultry produced in Thailand, chicken and duck. Poultry population and production are highly concentrated in central Thailand as broiler producers need to be located near certified slaughterhouses, feed mills and food processing plants. These facilities are also concentrated in central Thailand. Large-size farms, with an average 70,000 chickens per farm account for 90% of chicken broilers in the central region.

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Poultry Sector in South East Asia

Figure 5: Chicken Population Density in Thailand Source: IPSOS Business Consulting

Integrated commercial farms set very high biosecurity standards, and currently cover 80-90% of national production. Traditional poultry farms are spread across the country and account for 10% of national production with most of their produce being consumed locally. Table 14: Commercial broiler holding by farm size

Source: IPSOS Business Consulting

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Poultry Sector in South East Asia There are 128 poultry processing establishments across 29 provinces that were approved for export manufacturing by the country’s Department of Livestock Development as of July 2016. The majority of the processing plants can be found in Samutsakhon which is located in the central area of Thailand. Table 15: Key Locations of Poultry Processing Plants Province

Number of Processing Plants

SAMUTSAKHON

22

SAMUT PRAKAN

13

CHON BURI

10

LOPBURI

10

SARABURI

8

BANGKOK

8

PATHUMTHANI

7

Source: Department of Livestock Development

There are more than 40 players active in the Thai poultry industry. Integrated commercial farms or large to medium commercial farms make up only around 20% of these market players. In terms of production volume, Charoen Pokphand Foods (CPF) Thailand is the largest company, accounting for 29% of total production, followed by Betagro, Saha Farm, Laemthong, Thai Foods Group, and GFPT. Thailand’s poultry export production is dominated by five companies which are responsible for 70-75% of the total export production. According to the Thai Broiler Processing Exporters Association, the largest are CP, Betagro, Saha Farm, GFPT and Cargill. Moreover, most of these companies have implemented fully vertically integration farming. Increasing scale of production by industrializing farms was a key structural reform that aimed to meet growing demand for poultry while controlling costs. The reform led to consolidation within the industry, which saw the average size of commercial farms increase while the number of producers declined. Major producers, such as Charoen Pokphand Foods and Betagro, have not only adopted advanced technology, they have also helped transfer this technology to smaller farms. Such technology has shortened the broiler period from 60 days to 40-49 days as well as improved the feed conversion ratio, and reduced costs.

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4.3 Useful Information 4.3.1 Associations Department of Livestock Development Address: Khwaeng Thanon Phaya Thai, Khet Ratchathewi, Krung Thep Maha Nakhon 10400, Thailand Website: www.dld.go.th Phone: +66 2653 4444 Email: [email protected]

The Department of Livestock Development is responsible for animal health, animal production and livestock extension, food safety of animal-derived products, veterinary public health, animal welfare, environmental impact of livestock farms and international animal health matters including disease control and eradication, quarantine, disease reporting, import-export controls, health certification, and monitoring of animal farms and slaughterhouses in Thailand.

Thai Broiler Processing Exporters Association Address: 313 C.P. Tower, 22nd Floor, Silom Road, Bangrak, Bangkok, 10500 Thailand Website: www.thaipoultry.org Phone: +66 2638 219 Email: [email protected]

Thai Broiler Processing Exporters Association was established in 1991 to act as a regulating and service agency for the large number of Thai chicken meat producers and exporters. All of the association's members are leading Thai producers and exporters with decades of proven track record in the chicken industry.

4.3.2 Trade shows VIV Asia Date: 15-17 March 2017 Venue: BITEC Bangkok, Thailand Website: www.vivasia.nl A biennial trade show that showcases companies involved in industrial feed processing equipment, supplies and raw materials, animal feed, medicines and breeding tools, farm equipment, slaughter equipment, meat processing and packaging products as well as systems, dairy products, organic food items.

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Poultry Sector in South East Asia

5. Philippines 5.1 Country Profile The Philippines, officially known as the Republic of the Philippines, is a sovereign island country in South East Asia situated in the western Pacific Ocean with a total land area of 300,00 square kilometers.

Total Land Area:

300,000 sq. km. GDP

USD 289,503 Million Form of Government

Republic Headed by a President

The Philippines’ recorded GDP in 2015 was Employment Distribution in Key Sectors US$ 289.5 billion with the Services sector GNI per capita (% of total employment) contributing 59% to total GDP, followed by USD 3,540 32 Agriculture Agriculture GDP per capita, nominal 15 Industry 32 Services Industrial (31%), and Agriculture (10%). 53 USD 2,850 Industry 53 Services 15 The economy grew by 6.8% in 2016, which GDP per capita, PPP USD 7,241 is among the fastest in Asia, and is projected to grow by as much as 7-8% in 2017 as the government ramps up infrastructure spending. The Services sector employs more than half of its workforce, while Industrial employs 15%, and Agriculture 32%. The Philippines is classified as a low middle income nation with a GNI per capita of US$ 3,540.

70,295

58,648

61,810

67,757

The country’s total external trade in goods in 2015 was US$ 128.9 billion. Exports for Jan–Nov Trade Overview (USD millions) 2016 were $51.361 billion, a 5.2% decrease Balance of Trade 2014 from 2015’s $54.168 billion. The decline is 61,810 Export attributed to a fall in electronics exports. In 67,757 Import -USD 11,647 million -USD 11,647 2015 contrast, the Philippines saw an increase in 58,648 Export million 70,295 Import inbound shipments, with orders of capital goods, raw materials and consumer goods Foreign Direct Investment USD 5,724 Million net inflow increased by double digits. For the year, USD 5,724 Million Export Import net inflow 2014 2015 inbound shipments grew 13.7% to $73.724 billion, against the government’s 10% target for 2016. The country’s net FDI inflow was at US$ 5,724 million in 2015. The Philippines’ ranking in the latest Doing Business Rank report of the World Bank for 2017 remains unchanged at 99th place. The country has improved in various areas, from dealing with construction permits, getting electricity, and paying taxes. Philippines has improved the transparency of its building regulations, made paying taxes easier by introducing an online system for filing and paying and by allowing for online corporate income tax and VAT returns to be completed offline. The government’s launch of an online facility in paying other government mandatory contributions such as health and social security also contributed to its improved ranking in 2017.

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Poultry Sector in South East Asia Table 16: Ease of doing business in the Philippines 2017 Rank Starting a business

2016 Rank

Change in Rank

171

164

-7

Dealing with construction permits

85

103

+18

Getting electricity

22

30

+8

Registering property

112

109

-3

Getting credit

118

109

-9

Protecting minority investors

137

136

-1

Paying taxes

115

120

+5

95

93

-2

Enforcing contracts

136

136

No change

Resolving insolvency

56

54

-2

Trading across borders

Source: World Bank

5.2 Poultry Market The Philippines is a producer of poultry products, and it is also self-sufficient for what concerns domestic demand. About 800 million broilers are produced annually and in spite of rising population, the country’s supply continues to meet consumer demands. The country’s poultry production is likely expanded to 1.83 million metric tons (MMT), 10 % higher than the 1.66 MMT recorded in 2015, according to the United Broiler Raisers Association (Ubra). The country’s broiler production could expand by nearly 17% to 1.4 billion heads in 2017 on the back of favorable weather and the entry of new industry players. Chicken broiler and egg production are the most developed animal enterprises in the Philippines today. The poultry industry in fact began as a backyard enterprise but has shifted to the formation of very large integrated contract farming operations. Poultry production in the Philippines is set to outperform the other sectors, as it will attract the majority of investment in the coming years, both domestic and foreign.

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Poultry Sector in South East Asia

5.2.1 Key Developments Consumption In 2014, the Philippines’s population reached 100M inhabitants, making it the 12th most populous country in the world. And with one of the highest population growth rate in the world, it is estimated a corresponding 2% per annum increase in the consumption of meat and meat products as a source of protein. Based on the Philippine Statistics Authority-Bureau of Statistics (PSA-BSA), demand for meat reached 1,484,000,000 kg in 2014 for an estimated 50 million meat eating Filipinos, 10 years old and above.

Table 17: Per Capita Consumption of Meat in kilogram/year

Source: National Meat Inspection Service

Poultry Import Bans Import bans on poultry products including dressed and deboned chicken, duck and eggs, following outbreaks of bird flu in Europe and Asia, are expected to benefit the local poultry industry. The Philippines is one of the few countries in Southeast Asia that remains free from the dreaded avian influenza virus mainly because it is isolated by the bodies of water which surround its islands and it does not share borders with other countries. The country’s bird flufree status will allow local poultry producers to access major markets for poultry products such as the Middle East.

Foreign Investments The Philippine poultry industry is starting to attract investments from overseas, helping local producers and workers source seeds, feed, grow and process chicken. Foreign investors contribute in improving the system of hygiene, food safety, and quality by setting high level partnerships with the poultry growers and farmers.

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Poultry Sector in South East Asia

5.2.2 Key Poultry Processing Areas

Broiler population as of July 2016 was 64.84 million birds. Region III (Central Luzon) had the highest broiler inventory with a total share of 30.58% in the country’s total broiler inventory. The inventory of layer poultry as of 2016, was 32.47 million birds. The top three regions in terms of layer inventory were Region IV-A (CALABARZON) with 35.8% share, Region III (Central Luzon) with 24.34% share and Region X (Northern Mindanao) with 10.13% share. The total native/improved chicken inventory as of July 2016 was 77.23 million birds. The region with highest inventory for native/improved chicken was Region X (Northern Mindanao) with 10.91% share to the total native chicken inventory. The total volume of chicken production increased from 1,571,762 metric tons in 2014 to 1,660,813 metric tons in 2015. This brought a 5.67% growth in production compared to its 2014 level.

Source: Philippine Statistics Authority

Figure 6: Thematic Map of Chicken Production, 2015 Source: Philippine Statistics Authority

There are a total of 114 accredited poultry dressing plants in the Philippines as of February 2017. Majority of the dressing plants are located in region III particularly in the provinces of Bulacan, Nueva Ecija, and Pampanga. There are 10 dressing plants in this region that are class AAA certified, the highest certification that the country’s National Meat Inspection Service gives to dressing plants. Plants with this certification can export and distribute outside of the province. The provinces in region IV-A where poultry dressing plants can be found are Rizal, Batangas, Laguna, and Quezon. There are six dressing plants in this region that are class AAA certified. Region X has the third highest number of poultry dressing plants in the country. Misamis Oriental, Misamis Occidental, Cagayan de Oro, and Bukidnon are the provinces where these dressing plants are located. There are 3 class AAA certified dressing plants in this region.

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Poultry Sector in South East Asia Table 18: Dressing Plants in the Philippines

Region

Number of Poultry Dressing Plants

I

14

II

5

III

20

IV-A

15

IV-B

2

V

7

VI

6

VII

8

VIII

7

IX

4

X

13

XI

7

XII

3

NIR

3

Total

114

Eighteen accredited class AAA meat establishments exported a volume of 4,542,063 kilograms of meat and meat products to 9 foreign markets in 2014. The target markets of Philippine meat exports were Japan, Brunei, South Korea, Papua New Guinea, Australia, Dubai, Kuwait, Qatar, and Saudi Arabia. Japan was the largest market for poultry with 11 meat establishments or 61% of exporters exporting 62% of the total export of meat and meat products.

San Miguel is among the major players in the poultry processing industry of the Philippines. Other major players include Bounty Fresh, Universal Robina Corporation, and Cargill Philippines. The country’s poultry industry has commodity characteristics and is subject to frequent changes in demand and supply. Most of the major integrated producers employ contract-growing schemes for the production of live broilers and have likewise engaged in contract breeding and toll dressing arrangements.

Source: National Meat Inspection Service

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Poultry Sector in South East Asia

5.3 Useful Information 5.3.1 Associations United Broilers Raisers Association Address: 124 General Luna St., Gitnang Bayan San Mateo, Rizal, 1850 Philippines Website NA Phone: +63 2941 5915 Email: [email protected] The United Broiler Raisers Association is a non-stock and non-profit national association of mainly small and medium scale poultry broiler raisers with chapters in all the major poultry producing areas of the country. Aside from interfacing with government and other NGO’s, UBRA seeks to promote the efficiency and competitiveness of the Philippine broiler industry.

Philippine College of Poultry Practitioners Address: Manila East Road, Tanay Rizal, 1980 Philippines Website www.rasterizedesigns.com/pcpporg/index.html Phone: +63 2654 5523 Email: [email protected] The Philippine College of Poultry Practitioners, Inc. is an organization of poultry practitioners that advocates the professional advancement of its members and is committed to the upliftment of the Philippine poultry industry. It contributes to the development of the poultry industry through the promotion of ethical poultry practice by providing an effective forum for the professional veterinary expertise.

5.3.2 Trade shows Livestock Philippines Date: 24-26 May 2017 Venue: SMX Convention Center Manila, Philippines Website: www.livestockphilippines.com Livestock Philippines is the country’s 1st International Livestock Nutrition, Health and Production, and Meat Industry Expo. It is the premier biennial event for the livestock, feed milling and meat industries in the country.

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6. Vietnam 6.1 Country Profile Having an area of approximately 330,951 km2 and a coastline of 3,444 km, Vietnam comes with abundant natural resources, such as natural water resources, minerals, oil and gas, fertile soil.

Total Land Area:

330,951 sq. km. GDP

USD 193,407 Million Form of Government

Socialist Republic Headed by a President

Employment Distribution in Key Sectors Vietnam’s average GDP growth rate GNI per capita (% of total employment) throughout the 2000s was 6.4% per USD 1,980 47 Agriculture Services year. In 2015, the country recorded a GDP per capita, nominal 32 21 Industry Agriculture 47 USD 2,109 Industry 32 Services GDP of US$ 193.4 billion and it grew by 21 GDP per capita, PPP and estimated 6.21% in 2016, making USD 6,083 it one of the fastest growing markets in the work. Its nominal GDP per capita in 2015 was US$ 2,109 or US$ 6,083 GDP per capita at PPP.

Vietnam’s Agricultural sector is the largest employing sector with 47% share of total employment, followed by Services sector (32%), and the Industrial sector (21%).

162,014

165,730

Vietnam posted a trade surplus of US$ 2.52 billion in 2016, reversing from a US$ 3.55 billion Trade Overview (USD millions) deficit a year earlier. Exports in 2016 Balance of Trade 2014 expanded 9% to $176.6 billion, and while 148,092 Export imports rose 5.2% to US$ 174.1 billion. 145,686 Import -USD 3,716 million

145,686

148,092

2015 162,014 Export 165,730 Import

Export

Foreign Direct Investment USD 11,800 Million net inflow Import

2014

2015

-USD 3,716 million

USD 11,800 Million net inflow

Meanwhile, the country’s FDI net inflow in 2015 stands at US$ 11,800 million. It received an estimated US$ 15.8 billion in actual FDI in 2016, up 9% from 2015.

Vietnam has improved in its ranking in the latest 2017 report of World Bank’s Doing Business Rank, going from to 82nd from 91st place. A review of the indicators shows that the country has made great strides in protecting minority investors, paying taxes, and trading across borders, as well as seen an improvement in resolving insolvency. However, Vietnam lost points in other areas: starting a business, dealing with construction permits, registering property, getting credit, and enforcing contracts.

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Poultry Sector in South East Asia Table 19: Ease of doing business in Vietnam 2017 Rank Starting a business

2016 Rank

Change in Rank

121

111

-10

Dealing with construction permits

24

21

-3

Getting electricity

96

101

+5

Registering property

59

58

-1

Getting credit

32

29

-3

Protecting minority investors

87

118

+31

167

178

+11

Trading across borders

93

108

+15

Enforcing contracts

69

68

-1

Resolving insolvency

125

126

+1

Paying taxes

Source: World Bank

6.2 Poultry Market Vietnam’s demand for poultry meat is expected to triple by 2020, while demand for eggs is set to double. The forecast, released by the Agriculture Ministry’s Department of Livestock Production, reflects Vietnam’s increasing population and rising living standards. Due to urbanization, a rapidly growing population, and a desire for a healthy lifestyle, demand for the latest innovations in the livestock industry is urgently needed. After pork, poultry is the second most important meat for the Vietnamese people. Production capacity in poultry is far less than that of pork and the poultry sector is not able to supply sufficiently for local consumption. Currently, poultry production is mainly owned by small-scale households. Among main constraints faced by these small-scale households are lack of knowledge and access to production innovation due to weak capital investment, limited ability in disease prevention and control. Thus, Vietnam has to rely on imports of frozen chicken parts from countries such as the United States, Turkey, and Hong Kong. Over 85% of Vietnam’s livestock is raised on small-scale farms. This arrangement leads to un-scalable production levels and prices, as well as inconsistence in the quality of breeders.

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Poultry Sector in South East Asia

6.2.1 Key Developments High Production Costs Vietnamese poultry producers could lose their market to regional and international rivals if they don’t improve their productivity and cut costs. Although local chicken production grew at a fast pace between 2003-2012 -- 9.3% a year compared to the world rate at 3.7%, Vietnamese productivity is lower. In 2010, it took local big farms an average of 49 days to raise a 2.2-kilogram chicken, and it was much longer for small farms. Elsewhere around the world, the time needed was 37-41 days and it is expected to be shortened further to 31 days by 2020. In addition, most of chicken production's inputs are imported, from breeds and veterinary drugs to animal feed. As a result, Vietnamese chicken products' prices are 1.5 times higher, or even twice the world's. In addition, the country’s trade agreements liberalize most of import tariffs and therefore pose challenges for local producers in competing in prices.

Poultry Importation The demand for poultry meat in Vietnam has increased over the past five years. As a result, local poultry production has also increased. However, local production is not enough to meet the country’s local demand hence poultry meat imports have also increased steadily.

Table 20: Vietnam Poultry Market In 1,000 metric tons

2014

2015

2016E

2017E

Total Consumption

1,240

1,390

1,481

1,549

Total Local Production

875

908

945

985

Total Imports

613

662

662

690

Total Exports

0.2

0.2

0.2

0.2

Source: USDA FAS

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Poultry Sector in South East Asia

6.2.2 Key Poultry Processing Areas Red River Delta, Mekong River Delta and North East regions are the agroecological regions with the highest population of poultry in the country. The poultry production in Vietnam is mainly in the hands of small holders, closed to habitant area. However, poultry production in farms of medium to big size, in separated area is increasing.

Table 21: Number of Poultry by Region in thousand heads

Region

2012

2013

2014

2015

Red River Delta

81,344

87,885

88,928

90,949

Northern midlands and mountain areas Northern Central area and Central coastal area

62,526

63,230

66,970

70,567

66,175

65,813

67,990

71,135

Central Highlands

13,754

14,638

15,513

16,490

South East

23,335

27,428

30,049

34,306

Mekong River Delta

61,327

58,703

58,246

58,459

Total

308,461

317,697

327,696

341,906

Source: General Statistics Office of Vietnam

So far livestock processing in Vietnam has not been practiced in an advanced way with technology or comprehensive equipment. For the livestock sector, the term “processing” is understood as “slaughtering” because slaughtering is the main activity done after livestock is taken from the farms and before it is sold at the wet markets. The vast majority of livestock slaughtering in Vietnam is carried out under unhygienic backyard conditions by households who specialized in this job. Large commercial public owned plants or privately owned slaughtering plants buy from commercial farms and sell mainly to supermarket and restaurants or hotels. Meat inspection does not always take place and is best described as cursory. Yet, this fresh meat is sold right after slaughtering at wet markets without any further processing like cutting, slicing, portioning, forming nor packaging. Most of the meat after slaughtering is distributed to wet markets. Even though urbanization is currently booming in Vietnam which encourages the establishment of supermarkets, hypermarkets and many other convenient department stores, buying fresh food including meat, fish, vegetable at wet markets is still daily practiced by majority of Vietnamʼs consumers.

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Poultry Sector in South East Asia

6.3 Useful Information 6.3.1 Associations General Department of Livestock Address: 16 Thuy Khue Street, Tay Ho, Hanoi Vietnam Website: www.cucchannuoi.gov.vn Phone: +84 4372 86130 Email: [email protected] The General Department of Livestock directs the local planning associated with the processing of livestock and poultry in Vietnam. It also direct and implements plans for the regional development of livestock farms including poultry production.

6.3.2 Trade shows ILDEX Vietnam Date: 14-16 March 2018 Venue: SECC, Ho Chi Minh City, Vietnam Website: www.ildex-vietnam.com ILDEX Vietnam is a trade fair for livestock, dairy products, meat processing and aquaculture. This event also brings international expertise to satisfy the needs of the local livestock industry. Exhibitors in this tradeshow are involved in animal feed and animal health, genetics and breeding, and traders, among others.

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Poultry Sector in South East Asia

7. References 7.1 Malaysia “The Malaysian Poultry Industry: Our Vision of the Future, Advancing Poultry Production for Food Security”, 2013, The Federation of Livestock Farmers’ Association of Malaysia “Malaysia Broiler Meat Sector”, 2014, USDA Foreign Agricultural Service “Participation of Farmers in the Integrated Broiler Contract Farming in Malaysia”, 2016, International Journal of Current Multidisciplinary Studies “Review of Domestics Broiler Market: Final Report”, 2014, Malaysia Competition Commission “Cobb Extends Leong Hup Agreement in Malaysia”, 2016, The Poultry Site

7.2 Indonesia “Indonesia Voluntary Poultry Report”, 2017, USDA Foreign Agricultural Services “Indonesia’s Poultry Value Chain”, 2013, United States Agency for International Development “Meeting the Challenge of Indonesia’s Growing Demand for Poultry”, 2014, WATTagNet “Foreign Firms Dominates Indonesian Broiler Production”, 2016, WATTagNet “Indonesia’s Growing Appetite for Animal Protein: An Overview of Business Models, Opportunities and Strategies”, 2016, DBS Asian Insights

7.3 Thailand “The Poultry Sector in Thailand”, 2016, Netherlands Embassy in Bangkok “Thailand Industry Outlook 2016-18: Frozen & Processed Chicken Industry, 2016, Krungsri Research “2016 Top Markets Report Environmental Technologies Regional Supplement”, 2016, International Trade Administration “GAIN Report – Thailand Poultry and Products Annual 2016”, 2016, USDA Foreign Agricultural Services “Poultry export outlook solidly optimistic”, 2017, Bangkok Post “Thailand’s Poultry Industry”, 2013, IPSOS Business Consulting Group “Animal Health in Thailand”, 2012, Department of Livestock and Development

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Poultry Sector in South East Asia

7.4 Philippines “How big is the Philippines Poultry Industry?”, 2014, Philippine Daily Inquirer “Broiler Output to Grow 17% This Year- Ubra”, 2017, BusinessMirror “Malaysian Firm Explores Ways to Help PH Poultry Sector”, 2015, Philippine Daily Inquirer “Accredited Poultry Dressing Plants”, 2017, National Meat Inspection Service “NMIS 2014 Annual Report of Accomplishment”, 2015, National Meat Inspection Service

7.5 Vietnam “Food Processing in Vietnam: Where is the Potential for High Value Export?”, 2014, Trung Quan Dinh “Vietnam- Agribusiness”, 2017, Export.gov “Vietnam Meat Market”, 2016, IPSOS Business Consulting “Asian Livestock: Challenges, Opportunities and the Response”, 2012, International Livestock Research Institute “Heathy Outlook for Vietnam’s Poultry and Egg Production”, 2012, WATTAgNet

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ABOUT US ORISSA INTERNATIONAL Orissa International is a consulting firm serving government economic development agencies and companies seeking to grow their trade, exports or investments in new markets. We are the leader in trade and foreign investment promotion within South East Asia, based on the number of American and European trade and investment promotion agencies and foreign companies who have selected our firm to assist them in doing business in this region. They have recognized that our 20 years of experience, our direct presence in key markets within the region, and our long track record of success, offers them the opportunity to enter into these markets faster and more successfully than if they were to pursue this on their own. In recent years, our track record and global network covering 40 markets have also made us the consultant of choice among South East Asian companies and trade promotion agencies looking to expand internationally. From strategy through to implementation, Orissa International can be relied on to serve you whether you are a TPO, IPA or a company.

OUR RESEARCH CAPABILITIES Orissa International regularly undertakes market research projects in various sectors in South East Asia, for trade promotion agencies and individual companies. With 18 years’ experience in South East Asia, Orissa International’s research methodology offers a unique combination of specialist industry knowledge and in-country research expertise. Research in each country is managed by an in-country Manager, who is well schooled in our methodology. The in-country research team is in constant dialogue with industry players and opinion makers, and is able to collate the latest market trends and industry events that impact the market. Our in-country research team is managed by Senior Research Specialists, who overlook final editorial control over the publication of market research. Our on ground research teams bring fluency in local languages, physical proximity to the best sources, an ability to engage directly with local industry contacts, and an awareness of commercial opportunities in the market.

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OUR PRESENCE ACROSS SOUTH EAST ASIA Our offices across South East Asia support our clients in both research and partner search projects. Singapore (Head Office) Orissa International Pte Ltd 1003 Bukit Merah Central #05-06 Inno Center Singapore 159836 Tel: +65 6225 8667 Indonesia Orissa International Pte Ltd Sentral Senayan 2, 16th Floor Jl. Asia Afrika No.8 Jakarta 10270, Indonesia Tel: +62 21 2924 1963 Malaysia Orissa International Sdn Bhd B1-23A-6 Soho Suites@KLCC 20 Jalan Perak 50450 Kuala Lumpur, Malaysia Tel: +603 2181 4936 Philippines Orissa International Philippines 2410 One Corporate Centre Julia Vargas corner Meralco Avenue Ortigas Center Pasig City 1600, Philippines Tel: +63 2 798 8132 Thailand Orissa International Pte Ltd 142 Two Pacific Place, 14th Floor, Suite 1406-07 Sukhumvit Road, Klongtoey Bangkok 10110, Thailand Tel: +66 9 9099 0326 Vietnam VPDD Orissa International Pte Ltd Representative Office in Ho Chi Minh City R.22, No. 23 Phung Khac Khoan St
 Dakao Ward, District 1
 Ho Chi Minh City, Vietnam Tel: +84 8 3827 3904

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