April 8, 2015
A brighter future for Indonesia''s feed industry
An industry analyst cites at least two factors why Indonesia''s animal feed industry is headed for the good times.
First, according to Araminta Setyawati, industry analyst for PT Bank Mandiri, in her article ("Animal feed industry: Still plenty of room to grow)" published in The Jakarta Post on April 8, 2015, Indonesia''s meat consumption is rising. Still low at 8 kg per capita per year compared with the Philippines'' 9 kg, Thailand''s 14 kg and Malaysia''s 34 kg, Indonesia''s meat consumption should ideally rise to 15 kg per capita per year, she says, citing figures from the Indonesian Feed Millers Association (GPMT).
Setyawati says that based on the ideal 15-kg-per-capita-per-year meat consumption, Indonesia will require 27.6 million tonnes of animal feed, a 72.5% increase from 14.7 million tonnes required at the current meat consumption level of 8kg per capita per year.
"Efforts to achieve the ideal level of meat consumption per capita, as declared by GPMT, translate into increases in the consumption of animal feed, which in turn means that great opportunities still exist for animal feed companies to expand their production capacities," says Setyawati.
Access to Japan reopened
Setyawati cites another factor why the industry should be looking forward to a brighter future: Early this year Indonesia was allowed to resume exports of processed chicken to Japan after 11 years of being banned by the Japanese government due to bird flu (H5N1) outbreak in 2004.
Three animal feedcompanies (PT Japfa Comfeed Indonesia, PT Malindo Feedmill and PT Charoen Pokphand Indonesia Tbk) are cited as possible exporters of chicken products such as meatballs, nuggets, sausages, chicken satay (kitori), chicken meat (karage) to Japan.
Indonesia is expected to export US$200 million worth of processed chicken annually (equivalent to 10% of Japan''s processed chicken market or 2 to 3% of the Indonesian market), resulting in increased demand for animal feed, according to Setyawati.
Indonesia''s feed millers rely on corn, which is the feed''s largest component at 51.4%. According to the GPMT, the industry relies on imported corn as the local farmers can only supply 40% of the millers'' total requirement of some 8 million tonnes.
Indonesia imports some other raw components of animal feed including meat and bone meal (MBM), soybean meal and rapeseed meal.