Poultry, meat demand increases forecast
With significant growth forecast in the human population, urbanization and the economy in Indonesia, a new Australian report highlights the likely increases in demand for poultry and other meat products.
Demand for food in Indonesia is expected to increase significantly towards 2050 as the result of significant income growth and urbanization. A newly published study for theAustralian Bureau of Agricultural and Resource Economics and Sciences (ABARES) entitled ‘What Indonesia Wants: Analysis of Indonesia’s Food Demand to 2050’ investigates projected demand for a range of different foods across urban and rural populations under a business-as-usual policy environment, without changes to underlying policies. “Over the next few decades, sustained economic growth, population increases and continued urbanisation are expected to change Indonesia’s demand for food. Not only will total food consumption increase but diets are expected to become more diverse,” write the report’s authors, Caroline Gunning-Trant, Yu Sheng, Patrick Hamshere, Trish Gleeson, and Brian Moir as quoted by Wattagnet. “The value of agri-food consumption in Indonesia is projected to quadruple between 2009 and 2050. At the same time, the Indonesian agri-food sector faces challenges to increase its production and productivity growth.”
The most significant demand growth is projected for meat, dairy products, fruit and vegetables among urban consumers. Assuming no significant change to agricultural productivity growth, food imports will be an important component of Indonesia’s food and feed supply towards 2050.
For the period 2009 to 2050, among the biggest projected increases in the value of food group demand are poultry meat, beef and sheep and goat meat, all expected to rise by a factor of 14. Dairy products are not far behind – estimated to be up tenfold. For all these commodities, the starting point is low compared to other Asian countries but by the end of the period, the value of Indonesia’s poultry meat and beef demand is valued at well over US$30 billion and dairy at approaching US$10 billion.
To meet this growing demand – assuming there are no major policy changes in the meantime – the report highlights that food imports will become an ever more important component of Indonesia’s food supply over the next 35 years. It forecasts that the real value of agri-food imports will rise more than 20 times from 2009, to US$152 billion in 2050. By that time, imports of beef are projected to reach US$26 billion (from US$0.5 billion in 2009), and imports of dairy products US$7 billion compared with US$0.4 billion in 2009.
According to the report, Indonesia’s livestock feed is based on locally grown corn but the country relies on imports of many other feedstuffs including soybean meal, rapeseed meal, meat and bone meal, corn gluten meal and feed additives.
Because of their geographic proximity, Australia and Indonesia are well placed to benefit from advancing bilateral agricultural trade, according to the ABARES report.
There are signs that Indonesia is taking seriously the growing demand for food and the need to raise food safety standards. According to the Jakarta Post, the capital city’s administration announced plans to concentrate poultry slaughtering at just five new locations. City governor, Basuki “Ahok” Tjahaja Purnama, said the new facilities will be equipped with modern technology in order to raise the hygiene standards of chicken meat distributed in the city.
Jakarta Fisheries, Agriculture and Food Security Agency head, Darjamuni Taseda, added that the new slaughterhouses will make it easier for his agency’s employees to control the quality of chicken meat sent to the city’s markets.
French animal nutrition company acquired Welgro feed plant
Invivo NSA has acquired Indonesia layer feed producer Welgro. The company aims to grow its presence in the burgeoning Indonesian layer market.
Driven by a growing population and middle class looking for alternative protein sources, the country’s poultry market has grown by 26.7 percent (CARG) between 2011 and 2015, states a FoodTechIndonesia report. Of this expansion, egg production proves to be on an upward trend. “The current population for layers in Indonesia is close to 150 million hens and current egg consumption is around 100 eggs per year per capita,” reports Hubert de Roquefeuil, CEO of InVivo NSA as reported by Wattagnet. “Eggs are a cost-effective protein in developing countries. The actual market is still 90 percent a ‘fresh market,’ with the concentration of populations in big towns. We can assume that modern markets will develop with other customer and regulatory requirements, allowing the best players to create value. In addition, there is still a lot of development expected for powder and liquid egg consumption. We expect Indonesian production to reach 200 million layers in less than five years,” he said.
The Indonesian Feed Millers Association (GPMT) forecasts animal feed production in the country to increase by 12 percent (16.8 million tons) in 2015. According to Roquefeuil, based on 2014 data, the Indonesian feed layer market represents around 5 million tons of this production.
“InVivo NSA is already a major player in Vietnam; the Welgro acquisition is also strengthening our footprint in Indonesia,” Roquefeuil said. “The operation allows us to better balance our footprint between the species which we are addressing: pigs in Vietnam; poultry in Indonesia; and aquaculture in all Asian countries.”
The Jakarta-based Welgro plant has a 150,000-ton production capacity operated by a staff of 110 employees. According to the company, Welgro poultry feed brand is known for its quality and “strong trademark, Gelang Merah.”
This recent purchase supports the company’s 2013 opening of a plant in Surabaya, Indonesia. Such purchases align with the company’s strategy to “accelerate the development of its complete feed range in Indonesia and strengthen its market share.”
“We provide internal knowledge regarding raw material qualification,” Roquefeuil says regarding what Invivo can deliver to Indonesian producers. “Our know-how relies on protein and restrictive amino acids management and feed particle size management. InVivo NSA can also offer feed additives inclusion for increasing productivity and improving health of layers.”
Invivo’s footprint in Asia. Invivo NSA has been operating in Indonesia since 1983. It currently employs roughly 400 people and operates three complete feed plants serving the poultry and aquaculture sectors. Asia is one of Invivo’s high-priority investment areas. Over the past two years, it has made major capital investments in Vietnam, Indonesia and the Philippines.
Indonesia moves towards modern agriculture
The Indonesian government is moving towards modern agriculture in an effort to ensure farmers welfare in the future, Agriculture Minister Andi Amran Sulaiman said. “Indonesia has made efforts to move towards modern agriculture. These efforts involve steps to lower the cost of production,” Andi Amran Sulaiman said as reported by Antara News.
In addition, the government has increased production and ensured farming throughout the region. The government has also controlled the price of imported grain to protect domestic farmers. “A shift towards modern agriculture will lead to an increase in production. The production has reached four million tons,” he said.
According to him, various programs have been conducted by the government to improve Indonesians welfare.
With the current programs, he noted, the government did not have to import rice this year. “Last year, we imported 800,000 tons of rice. Now, the current government does not import rice,” he said.- -