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Poultry Sector in South East Asia

Iowa Economic Development Authority

March 2017

Orissa International Pte. Ltd. | Market Research


© 2017
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

1,000,000 879,408

800,000 686,385 674,732


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 Total Land Area:

and is home to over 30.5 million people. 330,290 sq. km.


GDP
West Malaysia, consists of eleven states USD 294,390 Million
and two federal territories, while East Form of Government

Malaysia consists of the states of Sabah Federal Monarchy


Headed by a Prime Minister
and Sarawak, and a federal territory.
Employment Distribution in Key Sectors

Malaysia’s recorded a GDP of US$ 294.4 GNI per capita (% of total employment)
USD 10,570 13 Agriculture
billion in 2015, with nominal GPD per GDP per capita, nominal
Agriculture
Services 28 13
IndustryIndustry
59
capita of US$ 9,657. Early estimates USD 9,657 59 Services 28

indicate the economy grew by 4.2% in GDP per capita, PPP


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.

The country’s total trade in 2015


Trade Overview (USD millions)
Balance of Trade decreased by 15.1% from 2014
2014
as both its export and import
233,927

233,927 Export
values fell. Malaysia recorded
208,850
199,869

208,850 Import USD 23,908 million


USD 23,908
175,961

2015 an export value of US$ 199.87


199,869 Export million
175,961 Import billion in 2015, while imports in
2015 were valued at US$ 175.96
Foreign Direct Investment billion. However, the country’s
USD 11,290 Million net inflow
Export Import USD 11,290 Million FDI net inflow increased to
2014 2015
net inflow 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 2016 Rank Change in Rank

Starting a business 112 59 - 53

Dealing with construction permits 13 13 No change

Getting electricity 8 7 -1

Registering property 40 39 -1

Getting credit 20 29 +9

Protecting minority investors 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

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

Per Capita Consumption in


Year 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

Poultry Population, There are thirteen poultry-producing states in


State
2015
Malaysia according to the Department of
Perlis 1,240,122
Veterinary Service. Johor has one of the
Kedah 53,862,440 densest chicken population in the country, with
Pulau Pinang 12,933,963 more than 66 million birds. On the other hand,
Kedah, Pulau Pinang and Perak are the top
Perak 37,677,871
broiler producing states, which account for 60%
Selangor 21,552,281 of total farmers involved in integrated broiler
N. Sembilan 21,361,940 contract farming in Peninsular Malaysia.
Melaka 20,687,676
Almost 90% of production occurs in Peninsular
Johor 66,912,863 Malaysia, with the rest in East Malaysia. In
Pahang 15,721,309 terms of bird numbers, commercially bred
Terrengganu 6,324,664 broilers comprise 67% of the total, while layers
make up around 25% and breeders make up 8%
Kelantan 1,811,088
of the total.
Sabah 5,691,950
Sarawak 42,346,698 Peninsular Malaysia consists of Perlis, Kedah,
Perak, Kelantan, Terrengganu, Pahang,
Grand Total 308,124,865
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: pro@dvs.gov.my
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: info@flfam.org.my
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 Total Land Area:
1,913,579 sq. km.
population of 255.5 million, making it GDP

the world’s fourth most populous USD 857,603 Million


Form of Government
country. Spread across a chain of Democratic
thousands of islands, its total territory Headed by a President

includes 1.9 million square km of land Employment Distribution in Key Sectors


and 5.8 million square km of water. GNI per capita (% of total employment)
USD 3,440 35 Agriculture
Agriculture
GDP per capita, nominal Services 22 Industry
35
Indonesia recorded a GDP of US$ 857.6 USD 3,357 43 Services
43
Industry
billion in 2015, representing 1.3% of the GDP per capita, PPP 22

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) Indonesia recorded a US$ 7.6 billion


Balance of Trade
2014 trade surplus in 2015, a significant
176,293 Export
178,179

improvement from the US$ 1.9 billion


176,293

178,179 Import USD 7,587 million


150,282

USD 7,587
142,695

2015 trade deficit in the preceding year. 2016


150,282 Export million
142,695 Import saw imports decrease by 19.9% to
US$ 142.7 billion (from US$ 178.2 billion
Foreign Direct Investment
USD 16,073 Million net inflow in 2014) while exports also fell by 14.8%
Export Import USD 16,073 Million
2014 2015
net inflow 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

Getting electricity 49 61 +12

Registering property 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

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 40.603.189 51.860.699 57.727.521 64.657.853 82.731.607


Kalimantan
Banten 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 114.178 123.726 130.357 158.673 163.252

South Kalimantan 36.177 55.032 46.511 60.952 81.092

Banten 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

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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 small-
medium 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
Total Land Area:
Indochina Peninsula, and borders by
513,120 sq. km.
Myanmar, Laos, Cambodia, and GDP
Malaysia. The country has an USD 395,726 Million
Form of Government
estimated population of around 68.8
Constitutional Monarchy
million and GDP of US$ 395.7 billion in Headed by a Prime Minister
2015. Its nominal GPD per capita in
Employment Distribution in Key Sectors
2015 was US$ 5,737 or US$ 16,074
GNI per capita (% of total employment)
GDP per capita at PPP. USD 5,620 40 Agriculture
Services
GDP per capita, nominal Agriculture
21 Industry
39
40
Thailand, the world’s 32nd largest USD 5,737 39 Services
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) Thailand’s trade balance reached


2014
Balance of Trade
US$ 11.645 billion in 2015, its first surplus
227,952
227,574

227,574 Export after four straight years of deficit. The


227,952 Import USD 11,645 million
2015 USD 11,645 country’s overall exports were US$ 214.396
214,396

214,396 Export million


202,751 Import billion in 2015, with the US as its top export
market. Exports grew only marginally, by
202,751

Foreign Direct Investment


USD 8,027 Million net inflow 0.45% in 2016.
Export Import USD 8,027 Million
2014 2015
net inflow
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

Paying taxes 109 106 -3

Trading across borders 56 54 -2

Enforcing contracts 51 51 No change

Resolving insolvency 23 26 +3

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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Poultry Sector in South East Asia

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: info@dld.go.th
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: packer97@thaipoultry.org
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 Total Land Area:
300,000 sq. km.
island country in South East Asia situated GDP
in the western Pacific Ocean with a total USD 289,503 Million
Form of Government
land area of 300,00 square kilometers. 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
Industrial (31%), and Agriculture (10%). Services 32
USD 2,850 53 53 Services
Industry
The economy grew by 6.8% in 2016, which GDP per capita, PPP
15

is among the fastest in Asia, and is USD 7,241

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.

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
70,295

61,810 Export
-USD 11,647 million attributed to a fall in electronics exports. In
67,757

67,757 Import
2015 -USD 11,647
58,648 Export million contrast, the Philippines saw an increase in
70,295 Import
61,810

inbound shipments, with orders of capital


58,648

Foreign Direct Investment goods, raw materials and consumer goods


USD 5,724 Million net inflow
Export Import USD 5,724 Million increased by double digits. For the year,
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 2016 Rank Change in Rank

Starting a business 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

Trading across borders 95 93 -2

Enforcing contracts 136 136 No change

Resolving insolvency 56 54 -2

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 flu-
free 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.
Source: Philippine Statistics Authority
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. 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

Number of Poultry Eighteen accredited class AAA meat establishments


Region Dressing Plants exported a volume of 4,542,063 kilograms of meat and meat
I 14 products to 9 foreign markets in 2014. The target markets of
II 5 Philippine meat exports were Japan, Brunei, South Korea,
Papua New Guinea, Australia, Dubai, Kuwait, Qatar, and
III 20
Saudi Arabia. Japan was the largest market for poultry with
IV-A 15
11 meat establishments or 61% of exporters exporting 62%
IV-B 2 of the total export of meat and meat products.
V 7
VI 6
San Miguel is among the major players in the poultry
VII 8
processing industry of the Philippines. Other major players
VIII 7 include Bounty Fresh, Universal Robina Corporation, and
IX 4 Cargill Philippines. The country’s poultry industry has
X 13 commodity characteristics and is subject to frequent
changes in demand and supply. Most of the major integrated
XI 7
producers employ contract-growing schemes for the
XII 3
production of live broilers and have likewise engaged in
NIR 3 contract breeding and toll dressing arrangements.
Total 114

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: georgiesd@msn.com
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: abet-pvg@pldtdsl.net
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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Poultry Sector in South East Asia

6. Vietnam
6.1 Country Profile
Having an area of approximately
330,951 km2 and a coastline of 3,444 Total Land Area:
330,951 sq. km.
km, Vietnam comes with abundant GDP
natural resources, such as natural USD 193,407 Million
Form of Government
water resources, minerals, oil and gas,
Socialist Republic
fertile soil. Headed by a President

Vietnam’s average GDP growth rate Employment Distribution in Key Sectors


GNI per capita (% of total employment)
throughout the 2000s was 6.4% per
USD 1,980 47 Agriculture
year. In 2015, the country recorded a GDP per capita, nominal
Services
32 21 Industry
Agriculture

GDP of US$ 193.4 billion and it grew by USD 2,109 47


Industry 32 Services
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%).

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
165,730

145,686 Import -USD 3,716 million imports rose 5.2% to US$ 174.1 billion.
162,014

2015 -USD 3,716


162,014 Export million
165,730 Import
Meanwhile, the country’s FDI net inflow in
148,092

145,686

Foreign Direct Investment


2015 stands at US$ 11,800 million. It
Export Import
USD 11,800 Million net inflow
USD 11,800 Million
received an estimated US$ 15.8 billion in
2014 2015
net inflow 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 2016 Rank Change in Rank

Starting a business 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

Paying taxes 167 178 +11

Trading across borders 93 108 +15

Enforcing contracts 69 68 -1

Resolving insolvency 125 126 +1

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 62,526 63,230 66,970 70,567


Northern Central area and Central
coastal area 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: cn@mard.gov.vn

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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© 2017 by Orissa International. All rights reserved. Permission to reproduce is required


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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© 2017 by Orissa International. All rights reserved. Permission to reproduce is required


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
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Jakarta 10270, Indonesia
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Malaysia
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50450 Kuala Lumpur, Malaysia
Tel: +603 2181 4936

Philippines
Orissa International Philippines
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Julia Vargas corner Meralco Avenue Ortigas Center
Pasig City 1600, Philippines
Tel: +63 2 798 8132

Thailand
Orissa International Pte Ltd
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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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