Founded in 1965, Srinivasa Farms has been the leader in the Indian poultry industry for five decades. Its diverse portfolio of products and services include Poultry Breeding (Layer & Broiler), Animal Feed Production, Animal Health & Nutrition, Soya extractions, Chicken Processing, Chicken Retail, Value Added Products, Retail Eggs and Mega Food Park. The business operations are spread across the states of Andhra Pradesh, Assam, Bihar, Chattisgarh, Gujarat, Haryana, Karnataka, Madhya Pradesh, Maharashtra, Orissa, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, West Bengal and further expanding rapidly across pan India. Suresh Chitturi, Managing Director, Srinivasa Farms and Chairman, International Egg Commission shared his views with AgroSpectrum on the status of Indian poultry industry and the way forward. Edited excerpts
What has been the impact of the pandemic on the Indian poultry industry?
During the first week of February 2020, due to unsubstantiated and fabricated messages in social platforms, the entire Indian poultry industry became crippled with a false premise of chickens being a potential transmitter of COVID-19. Amidst this scare, the consumption of chicken meat and eggs dropped severely and subsequently the prices. The world’s biggest nationwide lockdown imposed in the country from March 25, 2020 to contain the virus spread further accentuated the already COVID-19–hit chicken industry following the arrest of logistic supply i.e. restricted moment of feed, vaccines, medicines, and chicks.
Marketing of broilers that were raised in the farms could not bridge their way to processing units as barricading of villages became prominent. Additionally, 70 -75 per cent retail units in the country were closed down. In India, rural areas constitute maximum poultry production, whereas the urban area constitutes the maximum consumption. With the majority of urban areas being under the ‘red zone’ category (with a higher number of COVID-19 cases), the transportation of poultry products had become completely compromised. These events led to the forced culling and destruction of the majority of live broilers in the country. The estimated loss of the poultry industry due to the impact of COVID-19 and its associated lockdown is $3.05 billion.
How is Srinivasa Farms contributing in making the poultry sector sustainable?
Our poultry litter-based Compressed Biogas (CBG) Project is located at Shadnagar, about 70 kms from Hyderabad city, which is the first of its kind in Telangana. The plant has the capacity to process 45 MT of poultry litter per day and produces 2.4 MT of Compressed Biogas per day. We have tied up with IOCL for the sale of biogas produced which generates revenue of about Rs 1 lakh per day. The project has a unique process of ammonia reduction which results in sustained reuse of water, making the biogas plant zero liquid discharge. In addition to CBG, the project also generates around 15 tonnes of organic manure as a by-product, daily, which is being sold to the local farming communities.
The environmental and social impact of the project can be summarised in the following points:-
Cleaner fuel: CBG is a cleaner burning fuel compared to petrol and diesel. It results in 90 per cent to 97 per cent lower Carbon-Monoxide emissions and 35 per cent to 60 per cent lower Nitrogen-Oxide emissions compared to gasoline.
Lower Methane Emissions: Animal wastes when left unattended releases harmful methane (which is 84 times more potent as a Green House Gas, than Carbon Dioxide) into the atmosphere. The production of CBG, which involves the collection and processing of these wastes and storage of the produced methane, results in a significant reduction in methane emissions.
Benefit to Farmers: The selling of poultry waste, which is the raw material in the production of CBG, results in a stable and steady source of income to the farmers.
Social Impact: By regular cleaning of litter, a number of harmful effects on the community staying around poultry farms gets reduced. This includes pathogen borne diseases which are spread by flies, water pollution due to leaching of litter into the soil and Ammonia getting released into the atmosphere which is harmful for birds as well as humans. With regular cleaning of litter, rodents and wild birds are kept away which cause many diseases.
What are the growth plans and strategies of the company for FY 2021-22?
Srinivasa Farms is just entering the growth phase in the second innings of our journey with Hyline international and Aviagen. In the current financial year, we are aiming for a 50 per cent growth in our top line compared to the last year. This is the first step to a bigger plan of achieving 10x growth in the next 6-7 years. The strategy would be to expand our operations in our core businesses i.e. Layers, Broilers and Feed. At the same time, we would be focussing on strengthening our foothold and value creation in the newer businesses like processing and retail.
What are the opportunities for the poultry industry in India?
The opportunities for the poultry sector in India exist across the value chain. India has one of the highest feed costs per kg (Not a cost-competitive market despite low labour cost) due to low yields of corn, soya and other ingredients as well as high import duties on raw feed products. Opportunities exist in increasing the yield of these crops and creatively improving mix with relatively lower cost ingredients at feed mills without compromising on nutrition. There is great scope for research in this area and collaboration between Industry, Academia and government agencies.
In poultry production, opportunities are more geography based. Most of the supply comes from the southern states of Andhra Pradesh, Telangana, Tamil Nadu and Maharashtra, whereas in some of the most populous states like Uttar Pradesh, Bihar and West Bengal, local poultry production is low despite high demand. This could mean a big opportunity for local poultry producers in these states.
Thirdly, opportunities lie in automation (e.g. Conversion from open sheds to environmentally controlled sheds, automation of feeding/drinking systems) and adoption of modern technologies like AI, Big Data in genetic research, disease diagnosis etc. There are also opportunities in developing economically feasible alternative antibiotic products.
Finally, I think the biggest opportunity lies in building consumer brands in this segment- across processed chicken and eggs category and associated services. The demand for processed chicken is on the rise. However, most of the online platforms who have come up with their own brands, haven’t built their own supply chain and are completely dependent on their partners to provide consistent quality meat and eggs. Opportunities exist in the areas of processing, cold storage infrastructure, logistics (refrigerated trucks), packaging equipment etc. There is also a huge opportunity in the export of high value frozen processed products like egg powder, retort meat products etc.
What measures should be implemented for Disease-free poultry production?
Some of the measures that should be implemented for disease-free poultry production in India include:
- Improving biosecurity at the farm level and educating the farmers on the importance of biosecurity.
- Improving laboratory and diagnostic facilities both in terms of quality and quantity
- Research on improving the genetic potency of birds towards disease resistance.
- Enhanced collaboration between the academia, government bodies and the industry in terms of disease diagnosis and preventive actions.
- Research on developing economically feasible alternative antibiotic products.
- Government support and policies towards enhancing farmer’s education and awareness in this aspect.
Do you think that plant-based meat and lab-grown meat will be a threat to the poultry industry in India?
In recent times, plant-based meat and lab-grown meat is getting a lot of attention on the international stage, particularly in the western world. But reality doesn’t seem to match the excitement. Last year the market for plant-based meat grew by a few hundred million dollars whereas the market of the traditional poultry industry (chicken and eggs) grew by more than $10 billion globally. Secondly, lab-grown meat is actually worse in terms of environmental emissions compared to the poultry industry. Thirdly, 90 per cent of the people who are adopting plant-based and lab-grown meat are actually vegetarians. So, the switch happening from traditional meat to this is very minimal. Lastly, as per research the investment required to replace 10 per cent of the traditional meat market with plant-based and lab-grown meat is to the tune of $2 trillion. If at least 10 per cent of this investment goes to the traditional poultry industry, it would go a long way in eradicating world hunger and malnutrition problems. Given these factors, I don’t see plant-based meat and lab-grown meat to be a threat to the poultry industry in India at least in the next 10 years.
How would you envisage the future of poultry industry in India?
I see the poultry industry in India on the verge of rapid growth for the next 20-25 years. In the next 10 years, the broiler industry is expected to grow with a CAGR of 10-12 per cent and the layer industry at a CAGR of 6 -7 per cent.
The processing industry is expected to grow at a CAGR of 25 per cent.
The driving forces for this growth are going to be:
- Increase in per capita income
- Increasing urbanisation and awareness leading to dietary changes
- Emergence of organised retail and modern trade
- Changing demographics, increasing number of working women and double income families
The per capita chicken consumption in India is about 4 kg/year whereas the world average is 17 kg/year. The per capita egg consumption in India is about 70 eggs per year whereas the recommended levels by the National Institute of Nutrition is 180 eggs per year.
As per capita incomes improve in the country and people become aware of the dietary needs, it is envisaged that we shall get closer to the level of the world average. With a 135 crore population, you can imagine the growth the industry needs.
Having said that, the growth is not going to be without challenges. Volatility in feed prices cannot be wished away. Rising feed costs can potentially raise the overall production costs in a price-sensitive market. The industry also needs to gear up for this.
Some of the other areas the industry and authorities need to focus are:
- Improved disease diagnosis, treatment and prevention
- Drug residue and drug/ vaccine quality control
- Standardisation & quality control of poultry feed, eggs & meat
- Application of Hazard Analysis and Critical Control Point (HACCP) and Good Manufacturing Practices
- Value addition
- Brand promotion
How can industry and government boost the export of frozen poultry meat?
The use of GM crops-derived products as ingredients in poultry feed will go a long way in making us competitive in the export market. This is the single most important policy decision which will help to boost the export of frozen poultry meat.
Last year, the Middle Eastern countries imported frozen poultry meat worth half a trillion dollars. Although being close to these countries, India doesn’t have a presence in this market.
Government intervention and clear policies in this regard will not only help the industry and boost the export of frozen poultry meat but also help in enhancing farmer’s income. By farmers, I am not only referring to the poultry farmers but also those who are associated with crop production that are ingredients of poultry feed. This will be a giant step towards achieving the Prime Minister’s dream of doubling farmers’ income.
Dipti Barve
dipti.barve@mmactiv.com
