ASEAN KEY DESTINATIONS
Animal feed business to grow 12% in 2014
The animal feed business is expected to grow by 10-12 percent this year on the back of increasing demand for chicken, according to a national association.
They said large election-related gatherings this year would contribute to heightened demand for chicken dishes — one of the most common sources of protein for Indonesians.
Desianto Budi Utomo, secretary general for the Indonesia Animal Feed Producers Association (GPMTI), said the group projected the animal feed business to grow 10-12 percent this year, compared to 9 percent last year.
“There will be more food orders to caterers, and chances are there will be meat on the menu. This will surely boost poultry demand, and positively impact animal feed enterprises as well,” Desianto said over the weekend.
He added that the continued growth of the nation’s economy and middle class would also contribute to the growth of animal feed industry.
“The country is estimated to maintain growth above 5 percent this year, and that is actually quite good because it ensures that Indonesians’ purchasing power will remain strong and keep them consuming meat products,” he said.
According to him, the country would see its animal feed production rising to 15.5 million tons this year. Last year, the country produced about 14.8 million tons of animal feed.
Desianto, who is also the deputy director of the country’s biggest animal feed producer, PT Charoen Pokphand, said his company was set to see its revenue grow by about 12 to 15 percent this year.
He added that his company was looking to build 8 new processing facilities in 2014 and 2015.
The publicly listed Thailand-based firm now operates seven feed mills.
The company has yet to publish its 2013 annual results, but previous reports said that it was upbeat it had reached its 15 percent growth target for 2013, equal to Rp 24.51 trillion (US$2 billion) in revenue.
A recent report published by investment consultant Investa Sarana Mandiri advises investors to keep an eye on stocks of publicly listed animal feed companies.
“Historically, meat consumption — especially chicken — increases significantly during an election year. Usually, 70 percent of the country’s gross domestic product [GDP] goes toward consumption during a political year, with 50 percent of that being for food,” said Kiswoyo Adi Joe, an analyst with the firm.
“Here is where we almost always find chicken in the main course.”
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