(MY) Livestock - the multi-billion-ringgit business

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BizFocus:

Livestock - the multi-billion-ringgit business

By Roziana Hamsawi

 

October 25 2007

 

FROM a mere traditional sector with minimal subsidies

from the government, the Malaysian feed and livestock

industry has grown into a multi-billion-ringgit

business, one that is very competitive and modern too.

It is now the largest food industry in Malaysia in

terms of output value and its importance continues to

grow especially in terms of the produce exported and

locally consumed.

 

Within the industry, Malaysia is an exporter of

poultry meat, self-sufficient in chicken and eggs with

production amounting to 35 million and 400 million

respectively.

 

Agriculture and Agro-based Industry Minister Tan Sri

Muhyiddin Mohd Yassin said the prospects for the local

livestock industry is particularly strong especially

if the latest technology and machinery is applied.

 

“With technology and the continued upgrading of it,

the time is now to further grow the industry as demand

for safe and hygienic products intensifies,” he said

recently after opening the Livestock Asia 2007 Expo

and Forum in Kuala Lumpur.

 

The minister said despite the significant

transformation of the nation’s livestock sector,

players should not rest on their laurels.

 

“We must continue to upgrade our processes,” he said,

adding that by focusing on more innovative and

cost-efficient methods in livestock production and in

particular ensuring food safety, the future of

livestock production will be bright.

 

Muhyiddin said the livestock industry can be even more

competitive if initiatives are taken to cultivate the

much needed feed ingredient like corn to further

reduce the cost of production of poultry meat and

eggs.

 

He also said that players should leverage on the

success of the poultry sector and expand the efforts

in further developing our capacity in the ruminant

sub-sector.

 

As it is, Malaysia is still a net importer of meat

products, particularly beef and mutton.

 

Muhyiddin acknowledged that there is no doubt farmers

are continuing to face challenges such as increasing

costs of feed and competition from other producers,

but this should not stop them from continuing to

invest in the latest innovations.

 

“The future for livestock production will be bright as

per capita consumption is still low in comparison to

developed economies,” he said.

 

Muhyiddin also urged farmers not to delay but

implement immediately production systems that are

environmentally friendly to ensure sustainability.

 

Poultry farmers, he said, should look into converting

their farms into the closed housing system that will

reduce health risks.

 

Dindings Soya & Multifeeds Sdn Bhd technical director

Matthew Clark, when met at the Livestock Asia, said

currently only 20 to 30 per cent of the farmers or

poultry players have opted for the environmentally

controlled closed housing system.

 

He said such system is better for public health and he

lauded the government for pushing towards this,

although he believed it would be a good two to three

years before this could be fully materialised.

 

“The cost of having a closed housing is between RM12

and RM15 per bird as opposed to RM7 and RM8 per bird

in an open concept. With that figure, added with the

fact that the ceiling price of chicken is controlled,

naturally the open concept is more attractive.” Clark

lamented that the controlled ceiling price of chicken

has in a way affected the industry which is already

facing its biggest concern that is the rising cost of

animal feed.

 

“A year ago, corn was priced at US$165 per tonne, now

it is US$290 while soya bean meal has gone up by 50

per cent in price over the last 12 months. Live feed

cost us RM50 per bag last year and today it is RM67.

This is squeezing the industry very badly,” he said.

 

Muhyiddin said the government has no plans to

subsidise the importation of animal feed but instead

is working on efforts to encourage local poultry

players to go to Indonesia to grow corn as animal feed

and export it back to Malaysia.

 

“We are already in talks with the Governor of Sulawesi

for some kind of a joint venture or partnership

agreement and hope to see this happening next year. So

far, four companies have indicated interest,” he said.

 

(The corn needed as animal feed are not the sweet kind

meant for human consumption and attempts to grow it in

Malaysia had failed while those grown in northern

Sulawesi had produced the desired results, Muhyiddin

explained.) Another participant at the Livestock Asia

Pristine Dynamics Sdn Bhd managing director Tan Sew

Heong said the increase in animal feeds can be offset

if farmers spend a bit on the closed housing system.

 

Tan, whose company distributes livestock farm

equipment and climate control system, said with a

closed housing system, feeding is done automatically

and according to feedback he received from customers,

they have saved some 7 per cent in feed cost.

 

“Our system has proven to increase production and

performance and after six years in operation, we have

over 100 customers nationwide and even some from the

Philippines,” said Tan, adding that it was not hard to

convince farmers to go for this system once they are

told of cost savings.

 

He said his system and equipment requires an

investment of about RM300,000 for 20,000 birds, adding

that the system goes through constant upgrading based

on customers’ feedback.

 

American company Diamond Systems, which opened its

regional office in Kuala Lumpur just two years ago,

meanwhile, is bullish about the livestock industry

here and the region.

 

Demand for the latest technology and innovation

continues to be strong, said its Asia marketing

manager Lee Cheam Peng.

 

Diamond Systems offers the technology for farm-packing

of eggs, washing, grading and packing them into

cartons and trays as well as the breaking and

separating of eggs for further processing.

 

“For the packing of eggs, four companies in Malaysia

are already using our technology,” he said, adding

that the egg business here is rather saturated

compared to the other regional countries.

 

“But the technology of breaking and separating of eggs

for the food-based industry is still relatively new

here,” said Lee, adding that there are prospects for

Diamond Systems in this sector.

 

Diamond Systems has machines that can pack 85,000 to

144,000 eggs an hour and an investment in these

machines range from US$400,000 to US$1 million (RM1.4

million to RM3.38 million).

 

This year, the biennial Livestock Asia, organised by

the Department of Veterinary Services, attracted more

than 250 exhibits from 35 countries, an increase of 15

per cent.

 

And judging from the number of very interested looking

visitors at the participating booths, it is quite

certain that the livestock industry here is still

growing with players keen to be updated on the latest

technological advances.

 

“Agriculture is business. The notion that farming is

for subsistence is no longer relevant, sustainable or

viable,” said Muhyiddin, adding that next year some

RM1.73 billion is allocated for this sector.

 

Under the Ninth Malaysia Plan, the livestock industry

has been allocated about RM530 million compared to

only RM203 million spent during the Eighth Malaysia

Plan.

 

http://www.btimes.com.my/Current_News/BT/Monday/Column/20071024230735/Article/

 

 

 

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