Japan, a major importer of poultry products, takes a liking for Andhra chicken !!

India’s, and particularly Andhra Pradesh’s, poultry sector that currently reports insignificant exports is hoping for major orders from Japan, one of the world’s largest importers of poultry products. A delegation of Japanese companies, led by Mayekawa Manufacturing, visited Andhra Pradesh last month and expressed interest in exploring joint ventures with local partners for processing poultry products and importing them, given the cost advantages in the subcontinent. 

During the visit, Mayekawa Chairman Yoshiro Tanaka told Andhra Pradesh Chief Minister N Chandrababu Naidu that his group has alliances with 24 Japanese companies looking to invest some $9 billion (Rs 56,300 crore) in India’s food processing sector. Mayewaka makes cooling and freezing systems as well as compressors for refrigerators and heat pumps. Japan imports 8.8 lakh tonne a year, or more than a third of its poultry product consumption of 2.21 million tonne, mostly from China, Brazil, the US, Thailand and the Philippines.

Statistics for United Andhra Pradesh

Statistics for United Andhra Pradesh

The Indian poultry sector has been reporting a healthy growth of 12-15% a year on the back of a rapidly growing middle class and rising incomes. Exports have been low owing to cost disadvantages and global concerns over the quality of Indian poultry products following frequent bird-flu outbreaks. “Thanks to mushrooming global quick service restaurants like KFC and McDonald’s, apart from local QSR brands, the Indian poultry industry had-over the last decade or so –begun adopting global quality standards,“ said a senior executive at a large poultry company, requesting anonymity.

Some of India’s poultry players that have made large investments in world class processing technologies include Venky’s, Suguna, Godrej, Amrit and Sneha Farms. “Unfortunately, Indian poultry product exports suffered on account of concerns that were blown out of proportion on bird-flu spread and subsequent quality issues, falling to less than . 600 crore last year from a high of over ` . 1,500 crore few years ago,“ said National ` Egg Coordination Committee coordinator KVS Subba Raju.

Sneha Farms MD D Ram Reddy, who controls more than a fifth of the market share in Andhra Pradesh and Telangana with over ` . 1,400 crore of annual sales, is excited over the fresh business opportunity from Japan. “We are currently setting up a modern chicken-processing unit near Hyderabad at ` . 75 crore of investment,“ Reddy said. “We will now explore options on joint ventures with the Japanese importers who have shown interest in Indian poultry products.“

According to K Ravindran, COO of Kolkata-based Amrit group, India will have proximity advantage ­ which means lower logistics cost ­ over Brazil in Japan’s poultry market. The Amrit group is currently setting up its largest export-oriented processing unit near Kolkata, he said. Acknowledging the feedstock advantages that Brazil has, being one of the world’s largest producers of maize and soya, NECC’s Subba Raju said India’s poultry players have the potential to give tough competition to Brazil if the input costs were contained.

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