1. Their is only one listed Egg Producer in the CSE and that is CIC, which is not the market leader. In Sri-Lanka, approx 2 million eggs are consumed daily. Eggs and not chicken are the cheapest source of Protein.
2. All Eggs are Halal - or so they think and say ! The Halal certifying board in Sri-Lanka says that all Eggs are Halal and dont need certification since they are naturally produced by the hen. However, not all Chickens (or Hens) are halal. This is due to two factors i.e. the Feed used and the method of killing. Now it is possible for some producers to feed the hens, feed consisting of non-halal ovine bone meal (as a protein supplement in feed - some use soya) , so technically not all eggs are halal ? classic chicken and egg story !
3. In 2012, their was a bumper Fish catch especially in the North east, which temporararily made fish relatively inexpensive and dampened the demand for chicken.
4. Pussella Farms is the largest non-halal producing chicken farmer in sri-lanka. They also rear pigs and sells it alongside their chicken in their own shops country-wide. Maxie and Prima (GRAN & TAFL), although non-muslim, produce only Halal chicken. irrespective of ethnicity and religion, why anybody would prefer non-halal chicken to halal chicken, beats me, unless their is a significant price differential of course.
5. At present, their is a rated capacity to produce approx 10-11 Million Kgs of chicken per month in Sri-Lanka. demand is for 7 million kgs per month. This excess capacity along with rising feed price due to commodity price, drought and exchange rate impact, and rising other input costs like electricity and transportation were the main reasons the poultry industry faired poorly in 2012.
6. The import of broiler chicken from India in late 2011 by Minister Johnny and Pussella's aggressive expansion (tripled his output from approx 500,000 kgs to 1.6 million kgs per month) are some of the main reasons for the downfall and glut in the poultry market. needless to say Pussella is paying the price and i hear Minister Johnny is getting into the poultry business !
7. Gran & TAFL have some issues inherent in them that may not be readily understandable to all.
Firstly, Feed which constitutes approx 70 % of COP in Chicken production is supplied by their principles through companies such as Japfeed etc who are also shareholders in GRAN. Their is a lot of incentive to over-invoice feed costs and show lower profits in Sri-Lanka due to price control. Furthermore, TAFL sells the Broiler DOC (Day Old Chick) at a fixed price way below the floating price in the market to its parent GRAN. So not much joy for TAFL shareholders.
8. GRAN grumbles that the fixed price of Rs 370 per kg of Broiler is low and costs are high. Remember the price control is for the chicken with skin. Skinless chicken, chicken parts, boneless chicken etc sell at a premium at the supermarkets for Rs 700-800/ per Kg. 30-50 % of their sales are in these value added areas. The 3rd Segment is the Live Bird (the dressed bird with feathers) for which the price varies between Rs 230-290.
9. After the 2012 dismal showing, the Industry is slowly getting back on its feet. most of the producers have cut back their production and demand is rising. Broiler DOC which were selling for between Rs 40-50 last year are now Rs 70-75. So far, the trend in the poultry sector for 2013, seems to be our friend. Feb & March are good months for the sector.
Last edited by The Alchemist on Fri Mar 01, 2013 8:56 pm; edited 1 time in total