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FEED INDIAN

I n d u s t r y

Revitalizing�Nutritional�Security

YEAR June 2015

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TITLE INDIAN FEED INDUSTRY: Revitalizing Nutritional Security

AUTHORS FASAR (Food and Agribusiness Strategic Advisory and Research) Team

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A United Nations study estimates that by 2030 the world will need 30% more fresh water and 50% additional

energy to support an estimated population of 8.3 billion. And by 2050 the world will need 70% more food to

feed a population base of 9.6 billion.

As urbanization continues unabated due to migration for better employment and living; by 2050 three billion

more people are expected to be living in cities. While greater affordability and availability will positively

improve the dietary habits, the natural outcome is that there will be an increased demand for high calorie

and protein diet.

By current trends, India’s total population will reach 1.45 billion matching China by 2028. And by 2050,

India’s population is expected to touch 1.7 billion, which will be equivalent to China and US put together.

Updates from FAO indicate that 17 per cent of the Indian population is undernourished to lead a productive

life. India alone accounts for 25 per cent of undernourished people of the world, which is more than entire

Sub-Saharan Africa. Hence, technological interventions to increase production and productivity in animal

and plant protein are paramount if we have to provide adequate nutrition to the nation. Thus interventions

in food and feed industry are immediate and urgent.

We must find a way of producing more crop with each drop of irrigation water; factoring in, a declining rural

work force. Food processing would have to be prioritized to minimize wastages in the farm-to-fork value

chain. As population growth continues and with it increasing demands for food, energy and water, managing

those multiple demands will prove to be challenging.

The silver lining however is the proactive efforts of the new government viz. increasing production in

unexplored areas like Bringing Green Revolution to Eastern India (BGREI) ; productivity enhancement in

cattle e.g. Rashtriya Gokul Mission ; unshackling reforms like restructuring FCI and tweaking APMC rules will

surely provide fodder ( and food!!) for the Global Food, Feed and Fodder 2015(G2F2 2015).

I present the knowledge report for G2F2 2015 which captures the feed sector of India in depth. Animal feed

industry is a growth sector and will need investments across the country to aid in balanced nutrition program

of animals, which is so essential to supplement the protein requirements of the country.

I wish all success to the organizers and participants at the event.

FOREWORD

Thank you.

Sincerely,

Rana Kapoor

MD & CEO

Contents

Executive Summary 1

Global Feed Sector 3

Global Feed Sector 4

Overview of Global Feed Industry 5

Market Size & Segmentation of the Global Feed Industry 7

Feed Sector- India 13

Poultry Feed Industry 15

Poultry Feeding System in India 15

Aqua Feed Industry 17

Shrimp and Fish Feed 18

Current Trends in Aqua Feed Sector in India 18

Cattle Feed Industry: 17

Dairy Feeding Systems in India 19

Composition of Typical Feed meal 21

Leading Indian feed players 22

New Initiatives in Indian Feed Sector 31

Conclusion 35

Roadmap 37

References/ Bibliography 41

Executive Summary1

The world's population is projected to grow from about 7 billion in 2012 to 9.6 billion people by 2050. More than half of this growth is expected in Sub-Saharan Africa (SSA); China and India. In addition to population growth, per capita meat and milk consumption is also growing—especially in China and India—and is projected to remain high in the European Union, North America, Brazil, and Russia. These foods are more resource-intensive to produce than plant-based diets.

As the cities are urbanizing and population is migrating in search of better living standards; there is double impetus for food in these magnets of growth. There is a direct correlation between increase in wages and the shift of the family from consuming staple based diet to a high protein one including fruits & vegetables as well as dairy and meat products and is described below in the exhibit.

Exhibit 1: Region wise energy requirements

Region Livestock (Kcal / person/day) Mutton (Kcal / person/day)

2006 2050 %Change 2006 2050 %Change

China 561 820 46 41 89 116

Brazil 606 803 33 151 173 15

Asia (ex China, India) 233 400 72 24 43 79

India 184 357 94 8 19 138

SSA 144 185 29 41 51 26

World 413 506 23 50 65 30

Source: World Resources Institute, YBL Research

2 INDIAN FEED INDUSTRY: Revitalizing Nutritional Security

These trends will lead to higher requirement of processed dairy, aqua and poultry products; in turn leading to a trigger for higher feed requirement. With foreign multi-national companies eyeing to enter the lucrative Indian markets, the animal feed industry in India will have to increase their capacities keeping in mind the quality issues to leverage on the growing demand for compound feed.

India has emerged as one of the largest and fastest growing compound feed markets in the world. The feed industry is growing at a CAGR of 8%, with poultry, cattle and aqua feed sectors emerging as major growth drivers. According to estimates by leading industry sources, the demand of animal protein and dairy products in India will increase the compound feed consumption volumes to 28 million tonnes by 2017/18.

Executive Summary1

Global Feed Sector2

Global Feed Sector2

Feed definition

Animal feed is food given to domestic animals in the course of animal husbandry. There are two basic

types:

Ø Fodder

Ø Forage

Ø Used alone, the word "feed" more often refers to fodder.

ü Fodder refers particularly to food given to the animals (including plants cut and carried to

them), rather than that which they forage for themselves. It includes hay, straw, silage,

compressed and pelleted feeds, oils and mixed rations, and sprouted grains and legumes. Food

grains are the most important source of animal feed globally. The amount of grain used to

produce the same unit of meat varies substantially

ü “Compound feed" refers to feed that is nutritionally balanced and has been manufactured

using the facilities of an analytical laboratory and under the supervision of nutritionists. It

can be fed to animals as the sole source of ration for their proper growth and development in

order to enhance their productivity


Overview of Global Feed Industry

The animal feed is produced in more than 130 countries globally. Different species are reared across

these countries for various purposes including meat, milk, protein etc. Feed is considered to be a

major component of the animal rearing as it adds significant cost to the production system. Type of

feed production varies across various regions and largely depends on the animal population and their

economic importance in the region. Feed requirement of the animals also vary with the purpose of

rearing it, including meat, egg and milk production. The industry makes a significant contribution to

the economic and nutritional well being of millions of people globally.

Increase in consumption of animal meat, growing demand for other livestock products and an increase

in oilseed production factors are driving the global animal feed industry. The global production of

animal feed tonnage touched to 980 million MT in 2014. The top 10 major countries contributing to

62% of global production of animal feed as on 2014 is graphically presented below in the exhibit.

China topped the list as the leading producer of feed with 182.69 million MT followed by USA and

Brazil at 172.45 million MT and 66.15 million MT respectively. India ranked fifth in the list with the

contribution of 29.43 million MT accounting for 3% of global feed production.

FCR Dairy Poultry Swine Aqua

Feed Conversion (Kg of feed to increase b.w by 1 kg)

4-10 2.2 3

Energy retention 27% 10% 14% 27%

Protein retention 15% 21% 18% 24%

Edible yield 41% 45% 52% 68%

Edible meat per 100 kg feed 4-10 kg 21 kg 17 kg 57 kg

Feed conversion ratio (FCR) measures how productive the different protein productions are. This tells

us the kilograms of feed needed to increase the animal's bodyweight (b.w) by one kg.

Ø Aqua sector has the best FCR since 1.2 Kg feed can increase body weight by 1.0 kg

Ø Similarly in aqua; for every 100 kg of feed; the yield of aqua is 57 kg


In Dairy industry, feed can be categorized into two broad sectors - fodder and forage. Fodder includes

hay, straw, silage, compressed and pelleted feeds, oils and mixed rations and sprouted grains and

legumes. Forage is plant material (mainly plant leaves and stems) eaten by grazing livestock.

Household food residues and the by-products of food processing industries constitute the traditional

sources of animal feed. Compound feed is blended from various raw materials and additives and are

available in the form of pellets or crumbles. The key ingredients used in compounded feeds are the

feed grains, which include corn, soybeans, sorghum, oats, barley and premixes.

Global commercial feed manufacturing generated an estimated annual turnover of over USD 460

billion in 2014. The industry continues to expand in volume and value in response to increases in world

population, urbanization and growing consumer purchasing power. One of the key challenges is that

out of the total global feed production, almost 31% is produced directly by on-farm mixing. This poses

challenges as food safety authorities do not regularly audit mixing by farmers and regulatory

authorities only inspect when there is a problem. The world compound feed production growth from

2000-2014 has been represented in below exhibit.

Exhibit 2: Top 10 countries of animal feed production

200

180

160

140

120

100

80

60

40

20

0

Chin

a

USA

Brazi

l

Mex

ico

Indi

a

Spai

n

Russ

ia

Japa

n

Germ

any

Fran

ce

182.69172.45

66.15

30.7 29.43 29.18 28.66 27.31 23.58 22.16

Source: Alltech Global Feed Survey Summary

Production in million metric tonnes

Exhibit 3: Growth rates of global animal feed market over a decade

Source: Feed International/WATT Research

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

1

2

3

4

5

6

0.9 0.7

2.2

1.3 1.5

3.53.9

5.5

3.1

0.4

4.2 4.13.6

1

1.6

Annual % change



Market Size & Segmentation of the Global Feed Industry

The feed production volume in the world has witnessed an increase of 2% over the last year. There have

been fluctuations in the production figures across the globe with China witnessing a plunge and India

gaining in volume terms from last year's figures. It is estimated that currently over 30,000 feed mills

are operating across the world with following estimated breakup of the production basis region.

Exhibit 4: Region wise animal feed production

34.57

350.54

232.58144.84

24.75

192.8

980

Africa Asia Europe Latin America

Middle East North America

Total

Estimated Production (in million MT)

Source: Alltech 2015 Global Feed Survey

The feed mills are predominantly located in Asia and North America contributing to almost 66% of feed

mills with average tonnages of 25,519 and 28,395 respectively. The total average tonnage at global

level was found to be 31,571 with Middle East boasting to have largest feed mills by average tonnage of

85,938 per year. About sixty percent of all feed produced is pelleted, and this is even more prevalent in

Europe. The region wise contribution to total number of feed mills is shown in Exhibit below.

Exhibit 5: Region wise contribution to feed mills

Source: 2015 Alltech Global Feed Survey

Africa Asia Europe Latin America Middle East North America

44.24

0.9221.87

16.63

12.60

3.70

Exhibit 6: Region wise price of Poultry feed in USD per MT

Region wise estimated feed cost average prices

While the global production of the commercial feed is expected to touch 1 billion MT level in the near

future, it is currently generating an estimated turnover of around USD 460 billion. Globally, around 2.5

lakh skilled labor force is engaged directly in this industry. Costs of different feeds vary with respect to

price of raw material (feed ingredients such as corn, barley, other coarse cereals, soya/oilseed DOC

etc.). Following exhibit represents an estimated average pricing of three types of feed in different

regions of the world.


Region Average Price Layer Average Price Broiler Average Price Pig Finisher Diet Finisher Diet Finisher Diet

Africa 425.00 490.00 390.00

Asia Pacific 425.00 490.00 390.00

Europe 346.00 370.00 361.00

Latin America 432.00 476.00 452.00

Middle East 485.50 573.00 ND

North America 413.00 440.00 429.00

Overall Average 430.00 480.00 427.00

Sub Segments of Global Feed Industry and Market Share

Globally, feed industry serves a variety of animals including poultry, dairy (cattle, calf, beef),

aquatic/marine, pig, pets etc.

Exhibit 7: Species wise break up of global animal feed market


Poultry Pig Ruminant Aqua Pet Equine

Total Feed By Species (in million MT)

439

256

196

4122 11



The demand of feed for different animals varies with respect to socio-cultural dynamics, eating habits

and economic importance of animals in the region. In most of the countries across world, poultry

segment occupies a major share of overall feed production volume.

Animal wise break-up of estimated feed production volume (in million MT)


Country Poultry Ruminants Aqua/Marine Pig Others

China 65 8.2 18 85 0.4

USA 82 40 11 24 15

Brazil 38 8 1 14 3

Mexico 15.3 8.2 0.2 5 1.5

Spain 5.4 7.2 0.2 14 0.7

India 20 8.2 1 0 0

Russia 14.6 2.3 0 9 0.5

Japan 10 8 0 6 0.3

Germany 6 7.3 0 10 0.3

France 6 5.4 0 5.3 1.4

Poultry Feed Market

Poultry is one of the largest meat production segments in the world and contributes significantly to

the global meat industry. Historically, the poultry farming has evolved through three major phases –

first was the traditional system in which it was largely done through the backyard farming; secondly at

small scale – semi commercial level of farming and currently for commercial purposes, generally at a

large scale. Resources for feed and feeding requirements have also evolved over the time. Generally,

household wastes, crop residues, fodder, cereal by-products etc. were used as feed under traditional

and small scale poultry farming. In large scale commercial poultry farming, nutritionally balanced

feeds are used for enhancing meat quality and productivity.

Exhibit 8: Species wise break up of poultry feed market


3% 3%

64%

30%

Layers Broilers Turkeys Others

Poultry feed holds an important place in the global meat industry as it is an essential contributor to

the overall growth of poultry. As per Alltech – 2015 Global Feed survey, the world has produced an

estimated 439 million MT of poultry feed during the last year. USA, China, Brazil and India are the

leading poultry feed producers in the world. There has been a growing trend in shift of consumption

pattern from red meat to white meat, specially in developed countries, which is also contributing to

enhanced demand of poultry meat. With growing health concerns, quality has also become one of the

important parameters for meat preference. These evolving trends will further enhance processing

levels in this particular segment.

Ruminant Feed Market

With commercialization of dairy and meat production, the ruminant feed market has become even

more important. Unlike pig and poultry, ruminants are largely not dependent on the grains, as a major

constituent of their feed. Adding grains in the regular diet of ruminants enhances their milk and meat

production efficiency up to a certain extent. USA, China, India and Mexico are the leading producers

of ruminant feed owing to high milk & meat demand and presence of a significantly large number of

cattle and other ruminants. India has the largest population of bovine animals and is the largest milk

producer in the world. Green fodder, dry fodder and concentrate feeds are the major components of

the ruminants' diet.

Exhibit 9: Species wise break up of ruminant feed market


57%

34%

4%2%

Dairy Beef Calf Others

As per Alltech – 2015 Global Feed survey, the world has produced an estimated 196 million MT of

ruminant feed during the last year. The cattle feed market is expanding, as the industry players are

adopting advanced and innovative technologies for feed production. With increasing demand of milk

and meat in the various regions of the world, the acceptance of feed as the major supplement in the

animal diet is expected to increase further. Ruminant feed has useful associated benefits such as

improved health, enhanced meat quality and milk production. Pig and poultry production systems are

generally dominant users of feed in comparison to ruminants.



Aqua/Marine Feed Market

Farming of marine & fresh water fish and crustaceans is getting boost with increased consumption and

high nutritional value of the products. With rise in demand of aqua products, commercial aqua feed

industry is also surging with a greater pace. Gradual technological innovations in feed formulations

have improved the feed conversion efficiency without compromising the nutritional content.

Aqua/marine food is also one of the most traded commodities worldwide. Globally, the aqua/marine

feed market has witnessed an exponential growth owing to the factors such as growing consumption of

sea food and growth of aquaculture industry as a whole. USA, China, Brazil and India are the leading

aqua feed producers across the world. Asia Pacific is the largest market for aqua feed consumption,

contribution over 70% of the overall consumption. As per Alltech – 2015 Global Feed survey, the world

has produced an estimated 41 million MT of aqua feed during the last year. Within Asia Pacific, China is

one of the leading consumer and producer of the aqua feed. This is growth has been further fostered

by expanding middle class population in developing nations and their rising income levels.

Pig Feed Market

Europe, Asia-Pacific and North America are the major consumers of pork in the world. It is one of the

most preferred meats for consumption in these regions. Pork production has been estimated to grow at

a CAGR of 1.7% from 2012 to 2017 owing to meat preference and growing population. Around 50% of

the pig population of the world is concentrated in China, followed by Europe and USA. During recent

periods, commercialized pig farming has witnessed a rise, specially in developed nations. Large scale

pig farming systems have been able to flourish well with improved genetic breeding programmes,

enabling infrastructure and enhanced feed availability. Contrary to it, in developing nations, pig

farming is still largely driven by small scale inefficient production systems.

Pig feed is one of the major cost components of pig farming system. As per Alltech – 2015 Global Feed

survey, the world has produced an estimated 256 million MT of pig feed during the last year. South

America and Asia-Pacific are the major contributors in the growth of global pig feed industry. Due to

large swine population, the China has become a major market for compound pig feed consumption.

Exhibit 10: Top 10 global animal feed companies, 2014

Sr No Name of the company

Country Annual Production (×1000 metric tonnes)

Feed Species Feed type Company type

1 CP Group Thailand Pig, Pet, Poultry-

general, Ruminant

Compound Integrator,

Retailer

2 New Hope Group

China

27,000

20,000 Pig, Poultry-general, Ruminant

Compound, Premix

Integrator, Retailer

Source: WATTAgnet.com

3 Cargill United States

Aqua, Horse, Pig, Pet, Poultry-general, Ruminant

Compound , Premix , Additive


4 Purina Animal Nutrition

United States

Aqua, Horse, Pig, Pet, Poultry-general, Ruminant

Compound, Premix

Retailer

5 BRF Brazil Pig, Pet, Poultry-general

Compound, Premix


6 Tyson Foods United States

Poultry-general Compound Integrator

7 COFCO China Pig, Poultry-general, Ruminant

Compound Integrator, Retailer

8 JA Zen-Noh Japan Pig, Poultry-general, Ruminant


9 Shuangbaotai Group (Twins Group)

China Pig Compound Retailer

10 Wen's Food Group

China

19,200

12,000

11,000

10,300

8,300

7,500

6600

6500 Pig, Poultry-general


Major PlayersThe top 10 leading compound animal feed producing companies by volume and their

profile is given in exhibit below:


Feed Sector- India3

India is one of the largest and fastest growing compound feed markets in the world. Feed

manufacturing on a commercial and scientific basis started around 1965 in India with the setting up of

medium-sized feed plants in northern and western India. Feed was produced mainly to cater to the

needs of dairy cattle. The poultry sector was not developed at that time and was restricted to backyard

production, with the desi (or native bird) kept mainly for the production of eggs. The Indian feed

industry is undergoing a very exciting phase of growth for the next decade.

Indian feed industry is presently growing at a CAGR of 8 percent. Poultry, aqua and dairy industry

occupy the major share in overall feed demand. While the potential feed requirement is huge and

stands at around 96 million tonnes, only 20.3 million tonnes was produced during 2012-13. There is a

huge scope for the growth in the sector, with industry becoming more organized. With this growth

rate India will soon become the largest feed market in the coming years. The feed industry

requirements that are met with the compound feed are only 11 percent for cattle, 14 percent for aqua

feed and 55 percent for poultry feed.

Feed Sector - India3


Indian Animal Feed Market Structure

Animal Feed Market

Poultry Cattle Aqua Others

The poultry industry has grown at an annual growth rate of 8 percent from 2002 to around 2013. The

seafood sector is also witnessing a growth of 6 percent annually in production of aquaculture.

Simultaneously, Indian dairy sector has also been growing at a rate of 4 percent annually. Growth in

these sectors has pushed up the demand for compound feed by 50 percent. India's demand for

compound feed is expected to rise 28 million tonnes by 2017-18

However, majority of the feed production is highly fragmented, composed mostly of home and custom

mixers. The table below provides a detailed breakup of animal feed industry into various segments –

Poultry (broiler and layer), cattle and aqua in India.


Exhibit 11: Animal Feed Consumption and Growth in India

Sector Feed Consumption Potential Feed Volume Estimated Future Annual (million tonnes) Requirements (2017-18) Feed Consumption Growth rate (%)

Broiler 9.4 10.4 8

Layer 2-3 11.6 5-6

Cattle 7.5 67 6

Aqua 1 7 9

Source: Industry Notes, YBL Research

As depicted in the above table, broiler feed constitutes a major share of animal feed industry

consumption (45%) followed by cattle feed (36%), layer (14%) and aqua feed (5%). Animal feed

industry can be mainly divided into poultry, cattle and aqua feed sectors. Only about 11 percent of

cattle feed, 14 percent of aqua feed and 55 percent of poultry feed requirements are met through

compound feed.

Poultry Feed Industry

Poultry Feeding System in India

Poultry Feed in India consists of grains like maize, wheat, sorghum, bajra, ragi and broken rice; grain

by products like rice polish, deoiled rice bran and maize gluten meal; oilseed meals from soybeans,

mustard, groundnut and sunflower; animal protein sources like fish meal, whole fish, meat and bone

meal, poultry by-product meal; vitamins, minerals and various feed additives.

In broilers, three types of feeds – pre-starter, starter and finisher are used. In layers, chick mash,

grower mash and two-three types of layer mash are used. In case of broilers in India, an estimated 9-10

million MTof feed was produced in 2013 of which almost 80 percent was produced in pellet form and

balance 20 percent in mash form. The distribution system in case of commercial broiler and layer feed

is through dealers and distributors to small and medium farmers. In case of few states in south, feed

millers are supplying directly to large farmers.

In case of large poultry integrators, they manufacture their own feeds. Some of the integrators

purchase premixes, specialty feeds and concentrates.

Poultry Feed

India is fourth largest broiler producer and third largest egg producer. The poultry sector is the key

driver with the broiler production of 3.5 million tonnes in 2013 and egg production of 70.24 billion in

2012-13. 90 percent of the broiler industry uses compound feed.

Poultry consumption has seen a steady growth over the last few years. The key factor for this is growth

in household incomes. Growth in income is associated with an increase in animal-based protein-

intake. Being a white meat, broiler meat has the advantage of being a healthier choice vis-a-vis red

meats like mutton, pork and beef, while also being cheaper than seafood.

Per capita consumption of broiler meat grew by 7.4 per cent CAGR from 2009-10 to 2013-14, while that

of eggs rose by 3.7 per cent CAGR. These levels are, however, much lower than the National Institute of

Nutrition's per capita consumption recommendation of 11 kg of meat and 180 eggs per year. Over

2013-14 to 2017-18, per capita consumption of broiler meat is estimated to continue to grow by a

slower 6 per cent CAGR, while eggs will improve slightly to 3.9 per cent CAGR.

The use of the compound feed in the layer industry varies from 5 to 25 percent and is highly

underpenetrated. Based on the current egg production total feed demand is about 11.6 million tonnes

although the consumption is 2-3 million tonnes. In future, the layer industry offers a promising

potential for the growth of the feed industry.

Poultry Feed accounts for 58 percent of the total feed market in India. Poultry feed consumption has

increased from 7 percent in 2007-08 to 8 percent in 2012-13. The current demand for poultry feed in

India is almost 22 million tons. The broiler industry has been considered the strongest driver behind

the development of feed industry in India, benefiting largely from the presence of integrators (70% of

the total industry) and a shorter production cycle. This has brought in feed based efficiencies and

rationalization in the industry.


Exhibit 12: Indian Poultry Feed Consumption Growth

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13-

5

10

15

20

25

million tonnes

Broiler Layer Requirement

Source: Industry Sources

While poultry integrators are much stronger in regional pockets of Andhra Pradesh, Karnataka and

Tamil Nadu, the much larger landscape for the poultry industry and its expansion beyond these belts

provide ample opportunity for standalone feed players. The demand is expected to grow by 7-8 percent

in near term.

The table below depicts the state-wise requirement of and broiler and layer feed in India (2013).


Exhibit 13: State-wise poultry feed requirement

S. No Region Annual Broiler Feed Annual Layer Feed requirement (MMT) Requirement (MMT)

1 Tamil Nadu 1.38 1.97

2 Karnataka 0.88 0.52

3 Andhra Pradesh 1.27 3.09

4 Maharashtra 1.23 0.36

5 Gujarat 0.20 0.13

6 West Bengal 1.12 0.12

7 Odisha 0.27 0.24

8 Punjab & Haryana 0.88 1.49

9 Rajasthan 0.16 0.11

10 Uttar Pradesh 0.63 0.1

11 Madhya Pradesh 0.19 0.03

12 Chhattisgarh 0.20 0.22

13 Others 1.51 0.06

Total 9.92 8.44

Source: CLFMA Annual Survey 2013-14, YES BANK Analysis

Considering the layer industry, the total feed demand is about 11.6 million tonnes. The consumption is

expected to grow by 5-6 percent. In the near term, significant opportunities exist in layer industry for

compound feed demand. With farms consolidating and growing in size in long term, layer farmers will

be integrated backwards into feed milling.

Aqua Feed Industry

Seafood production in India has grown 4 percent since 2002-03 to reach 9 million tonnes in 2012-13.

Assuming on an average 1.5 feed conversion ratio (industry standards), the demand for aqua feed

comes at around 7 million tonnes. However, current aqua feed consumption is estimated to be around

1 million tonnes, mainly for shrimp and freshwater aquaculture.

Due to rapid changes in shrimp and fish farming sector, production capacities for modern feed has

gradually gone up to 2.88 million tonnes (26 feed mills) in 2013-14. The current capacity utilization of

these plants is low at 43.4% with a total production of 1.25 million tonnes of aqua feed.

Indian aquaculture production is at 4.6 million tonnes in 2012, with the requirement of the industry is

around 1 million tonnes by shrimp and freshwater aquaculture. With the introduction of vannamei

shrimp, the cultured shrimp production is growing at 16 percent. The demand from shrimp and

floating freshwater shrimp will drive the growth of the aqua feed industry at 5-6 percent annually

Shrimp and Fish Feed

India currently has 13 feed mills that can produce modern feed for shrimp sector with a production

capacity of 1.33 million tonnes. On fish feed, the current installed capacity is 1.55 million tonnes. The

total feed production for shrimp and fish stands at 5.72 lakh tonnes and 6.84 lakh tonnes respectively.

Shrimp production growth has driven feed consumption growth by 13 percent between 2007-08 and

2012-13 reaching almost 300,000 tonnes in 2013-14. Disease outbreak remains one of the major risks

affecting the growth of aqua feed industry. The shrimp feed market is forecasted to grow by 6-7%

every year.


Exhibit 14: Aqua Feed Consumption Growth

2007/08 2008/09 2009/10 2010/11 2011/12 2012/130

50000

100000

150000

200000

250000

tonnes

0

50000

100000

150000

200000

250000

300000

350000

Shrimp Production Shrimp Feed consumption

Source: Industry Sources

Considering the freshwater fish, in the last 5-10 years, freshwater fish feed demand has grown rapidly,

driven by the growth in freshwater fish segment in India. Current freshwater fish feed production is

estimated at 0.7 million tonnes and significant investments has gone in creation of capacities. It is

expected that the demand for freshwater fish feed is expected to grow at 5-6 percent in near term.

Current Trends in Aqua Feed Sector in India

• Emerging Markets for Aqua Feed: Current market players and feed mill investors are looking

for market diversification options to increase feed capacity utilization. Currently Andhra

Pradesh constitutes the major share in domestic market accounting for feed sale of almost

60,000 tons per month followed by other states with below 5,000 tons sale a month.

• Use of Feed Ingredients and Modern Feeds: Cheaper feed ingredients like deoiled rice bran,

wheat bran, cottonseed cake and groundnut cake are extensively used in freshwater

aquaculture. Both conventional and non-conventional feed ingredients are used in feed

formulation for shrimps. Feed ingredients like fishmeal, squid meal, lecithin, cereal flour and

other essential and propriety additives and fish oil are also used in prawn and shrimp feed

formulations. Freshwater fish are fed with farm made feeds which consists of mixture of rice

bran, wheat bran and oilseed cakes. After 2008, many aqua feed mills have started

manufacturing floated/pellet feeds for farming of freshwater fish.

Cattle Feed Industry:

Dairy Feeding Systems in India

Feeding systems in India is prevalent small dairying primarily based on grazing of native pastures of

low nutritive value. Cattle and buffalo are usually fed on wheat, paddy, millet, sugarcane tops and

other straws and stovers. These are supplemented with small quantity of grass available from grazing.

Very limited amount of concentrate is fed to the animals.

According to National Dairy Development Board (NDDB), the livestock feeding systems in India is

categorized into six major types:

1. Dry Fodder + Compound Feed + Concentrate Feed

2. Dry Fodder + Green Fodder + Compound Feed + Concentrate Feed

3. Dry Fodder + Homemade Concentrate Mix + Grazing

4. Green Fodder + Compound Feed + Concentrate Feed

5. Silage + Dry Fodder + Concentrate Feed

6. Silage + Compound Feed + Concentrate Feed

The table below depicts the projected demand and availability of feed/fodder by 2020 in India.


Projected demand and availability of fodder in India

Demand Projections (2020) Availability Projections Shortfall (million MT) (2020) (%age)

Dry Fodder 468 417 11

Green Fodder 213 138 35

Concentrate Feed 81 44 45

Source: CLFMA Annual Survey 2013-14, NDRI

India is the largest milk producer in the world, producing 133 million tonnes in 2012/13 and is driving

the feed industry at 7.5 million tonnes for dairy. However the compound feed for dairy industry in

highly underpenetrated.

Assuming per litre milk production of 0.5 kilograms of compound feed is required; the total demand for

the cattle industry is 67 million tonnes in India. However, the feed sector for the dairy is highly

underpenetrated at 11 percent. With the farm gate prices of milk and entry of commercial dairy farms

the potential for the cattle feed is bound to increase.


Cattle 11%

Aqua Feed

14%

Others

20%

Poultry

55%

Exhibit 15: Structure of Indian Animal Feed Market

Exhibit 16: Region-wise cattle feed production in India

Region States Private Sector (million MT/year)

Cooperative Sector

(million MT/year)

Total (million

MT/year)

% share

Western Gujarat, .

Maharashtra, Goa,

Madhya Pradesh

Northern Punjab, Haryana,

UP, Uttarakhand,

Rajasthan

Southern Karnataka, AP, TN,

Kerala, Pondicherry

Eastern Bihar, Jharkhand,

Odisha, WB, Assam

1.80

0.80

1.20

0.20

1.70

0.42

1.11

0.10

3.50

1.22

2.31

0.30

48%

17%

31%

4%

Source: CLFMA, YES Bank Analysis

Compound Cattle Feed

Compound feed plays an important role in improvement in milk yields of cattle and buffalo by offering

a balanced ration. Driven by the strong growth in dairy industry, compound feed volumes have

increased at an average rate of 6 percent between 2007- 08 to 2012 - 13. Current consumption volumes

are approximately 7.5 million tonnes. But the current production amounts are sufficient to feed only

about 7% of the total breedable animals in India. Assuming 0.5 Kg of compound feed requirement

(industry standards), cattle feed requirement comes at around 67-70 million tonnes and is depicted

below

As depicted in the table above, out to total compound cattle feed production, 3.33 million MT (45%)

were by cooperative sector and balance 55% (4 million MT) by private sector.

With increased participation of private sector in dairy industry, the scenario is expected to change and

resulting increased feed consumption. According to industry estimates the demand for cattle feed is

expected to grow by 6 percent in near term which is still below the potential growth levels.

The lower penetration of compound feed in cattle feed industry is one of the major bottlenecks

affecting the industry. Currently only 11 percent of total feed requirements are met through compound

feed. One of the major reasons for lower penetration of compound feed is the lower share of large

organised dairy farms currently accounting for only 24 percent of total production in India. Lack of

large – scale dairy farms remains a key constraint in the cattle feed industry as small-scale farms do

not use modern feeding practices on a constant basis.


Major Companies in the subsegments are as below

Poultry Cattle Aqua

Suguna Feeds Kapila Feeds Indian Broiler Group

Japfa feeds Godrej Agrovet Avanti Feeds

Venkys/ Uttara feeds Suguna Cattle Feed Godrej Agrovet

Anmol feeds Amrit Feeds Ananda Feeds

Godrej Agrovet KSE Ltd. Uno Feeds

SKM Animal Feeds Anmol Group Growel Feeds

Cargill India C P Aqua

Mulpuri Feeds

Waterbase Ltd

Grobest Feed Corp Ltd.

Composition of Typical Feed meal

In general, the major raw materials that are used as ingredients for preparing animal feeds include

maize, wheat, bajra, corn, soybean, oil cakes, sugarcane, oil seeds and rice bran Corn, Soybean

followed by rapeseed, groundnut, deoiled rice bran, sunflower meal, cottonseed cake, wheat bran and

some non-vegetarian sources. Corn is the main source of energy in poultry feeds and soybean

contributes to the plant protein element.

Ø In North, poultry feed is corn ( 60%) + soybean ( 25%) and rest of farm gate wastages e.g

rice./ wheat/ meat meal

Ø In East, it is corn (60%) and mix of rice/ sorghum etc

Ø In West , poultry meal is a mix of corn + soybean

Ø In South, poultry feed is corn ( 65%) + soybean ( 30%) and rest of it is oil, groundnut,

sunflower residues, fish meal

Price of raw materials accounts for a major share in the overall cost of production of different animal

feeds. In India, price of these key inputs varies from time to time depending upon total agricultural

output, climatic conditions, import export requirements and global price fluctuations, which

ultimately affects the manufacturers in terms of low profit earnings.

Average pricing of some raw materials/ feed ingredients are as follows:


Raw Material Rate per MT

Soy Deoiled Cake (DOC) 35,000.00

Corn 13,000.00

De Oiled Rice Bran 9,000.00

Feed Supplements 45,000.00

Corn Gluten Meal 60,000.00

Rice Bran 17,000.00

Guar Kurma Mash 25,000.00

Mustard DOC 19,000.00

Leading Indian feed players

1. Godrej Agrovet

Godrej Agrovet Limited (GAVL) is a diversified agribusiness conglomerate with businesses in animal

feed, oil palm plantations, agri inputs and poultry. The company is dedicatedly focused to improve

the productivity of Indian farmers by constantly improving on product & services that ultimately

increase crop and livestock yields.

Animal Feed: Since the inception of feed division in 1972, the unit has 40 production units and enjoys

around 22% of the total market share in the compound feed market. The company has designed

customized feed products both for cattle and poultry. The ingredients and nutritional value of each of

them varies accordingly and it is different for different category and age group of poultry and cattle.

The company has feed products for high & medium milk yielders, calf starter, cattle feed concentrate 1& supplement, broiler full and layer full feeds etc. The feed business recorded revenue of INR 2550 cr

in 2013-14, a 10% growth and INR 147 cr PBIT registering a growth of 19% from previous year on

account of increased volume and innovative products and efficiency in buying.


The feed range broadly is as follows:

• Cattle Feed

o Milk Yielders- Bovino; Godrej Bypro; Milk More; Godrej Supreme; HPMR; Godrej Super

o Calf Starter- Bovino Calf Starter

o Cattle Feed Concentrate & Supplement- Moo Magicmix; Prepwell; SummerKool

• Poultry Feed

o Broiler- Full Feeds, Starter and Finisher, Broiler Premixes

o Layer Full Feeds

2. Uttara Feed/ Venkys

The Venkateshwara Hatcheries Pvt. Ltd. (VH group) was established in 1971 in Pune which is popularly

known as Venky's. The company diversified its activities to include include Specific Pathogen Free

(SPF) eggs, chicken and eggs processing, broiler and layer breeding, genetic research and poultry

diseases diagnostic, poultry vaccines and feed supplements, vaccine production, bio-security

products, poultry feed & equipments, nutritional health products, soya bean extract and many more.

The group is the largest fully integrated poultry group in Asia and has a number of reputed

organizations under its wide umbrella and successfully caters to poultry and its allied sectors.

Uttara Foods and Feeds Pvt. Ltd. (UFFL) was established with an objective of providing poultry with a

hygienic and nutritionally balanced & easily digestible diet which began its operations in 1998. Due to

UFFL's focus on using super technology to achieve quality, Venky's Feed is the forerunner in the pellet

feed brands in India. Venky's (India) Limited manufactures and sells poultry feed under the Venky's

brand name for captive consumption to the VH Group as well as to the major poultry markets of

Western and Northern states of India. It has production plants located at Pune, Dehradun and Solapur

with a total capacity of over 100,000 MT per annum. Product profile of Venky's poultry feed includes:

• Breeder Feeds: Breeder Chick/ layer, Breeder grower, Breeder pre layer pellet etc

• Broiler Feeds: Pre starter/ starter/ finisher crumble, Broiler starter/ finisher mash,

Concentrate special & regular, Broiler super starter/ finisher etc

• Layer Feeds: Chick crumble, Pre lay crumble, Pre lay mash, Layer concentrate 35%, Layer

crumble & Mash, Grower crumble & Mash, layer concentrate 50% etc

• EMU Feed: EMFED CC, EMFED GP, EMFED MP etc

1 GAVL annual report 2013-14

Post remarkable success in Poultry industry, Venky's is all set to cater the dairy industry with its cattle

feed products, namely Hi- Yield and Dairy Special. The division extends to Punjab Haryana and

Rajasthan with its entry in cattle feeds division with the initiative of cattle feed plant at Khanna,

Ludhiana, Punjab which is designed with the state of the art infrastructure equipped with

technologically advanced tools. VH Group aims to be the leading manufacturer and supplier of Cattle

Feed with initial production capacity of 3,000 MT of pellet feed per month.

3. Suguna Feed

Suguna is one of the largest integrated poultry companies in India with ultra modern infrastructure

and equipped labs which ensure the best raw materials are utilized to produce quality end products.

The company has manufactures different variants of high quality poultry and cattle feed.

• Poultry Feed: The Company maintains hygienic, bi secured stock points to store raw materials

and finished products. Product portfolio comprise of Broiler Feed (Nutri chick, Pre broiler &

broiler starter, Broiler finisher, Broiler concentrate 10% & 40%), Layer Feed (Layer starter,

chick & grower crumble, Layer mash I & II, Layer concentrate 35%) and Breeder Feed (layer,

broiler & male mash)

• Cattle Feed: The company has introduced completely balanced cattle feed in the market which

enhances fat and SNF content in milk. The cattle feed is rich in protein, minerals and pro biotic

which is easily digestible & prevent acidosis in cattle and ultimately increases milk yield. The

cattle feed of Suguna is available under “Pavithra Feeds” brand name.

The company has set up India's largest feed mill at Hoskote near Bangalore with a capacity of 2000 MT

per day. This state-of-the-art feed mill has a capacity of 80 TPH and expandable to 140 TPH.

4. Avanti Feeds

Avanti Feeds is the leading manufacturer of prawn & fish feeds and shrimp processor and exporter

from India. The company has established a JV with the world's largest seafood processors and leading

manufacturer of prawn and fish feed in Thailand, Thai Union Frozen Products PCL, with integrated

facilities from hatchery to shrimp & fish processing & exports. Avanti Feeds was incorporated in Jan

1993 as a private limited company and was later converted into public limited company.

Avanti Feeds Produces scientifically formulated and nutritionally balanced water stable international

quality shrimp feed in India. It is also the largest supplier of shrimp feed in the entire coast of India

and other countries. Avanti has three prawns and a fish feed manufacturing units in Kovvur, Vemuluru

in West Godavari District, Andhra and Pardi in Valsad District, Gujarat, in India with a capacity of

90,000 MT per annum. The shrimp processing and exports unit is located in Gopalapuram near

Ravulapalem, East Godavari District Andhra Pradesh. The buyers of the products from the company are

present in USA, Europe, Japan, Australia and Middle East.

The company is also serving shrimp and fish farmers by providing technical and other support services

through its highly equipped quality testing Labs in the coastal regions Kakinada, Amalapuram,

Malkipuram & Gudivada for Shrimp Seed Quality Analysis, PCR testing and Water & Soil test for Shrimp


Culture. It also helps them in seed selection and cultural practices to be followed via quality and

experienced technical staff.

2In the year 2013-14 , shrimp feed sales were recorded at around 150 thousand MT, an increase of 45%

as compared to previous year. The shrimp processing and export division sales recorded export of

3,289 MT in 2013-14, registering an increase of 29%.

5. Anmol Feeds

Anmol Feeds Limited started its journey in the year 2000 by entering into the animal feed industry in

Muzaffarpur, Bihar. In the last 14 years of its business operations, the company has established its

corporate office in Kolkata with manufacturing units in Bihar, UP and West Bengal. In addition to this

it has created facility for manufacturing feeds in Jharkhand, Haryana & Karnataka. Presently, the

company has spread its business of manufacturing and selling of feed in 17 of the Indian states in

North, East, NE and southern regions of the country. With its robust growth in Poultry feed the

Company has also ventured in Cattle & Aqua feed in Bihar, West Bengal & North East and is making a

major stride forward.

Product profile:

• Poultry Feed: This product category consists of

o Pre-starter crumb feed: Balanced nutritive chicks feed with uniform crumbs (0-10 days)

o Starter crumb feed: Balanced crumb feed for uniform growth in flock (11-28 days)

containing protein, energy and amino acids

o Finisher crumbs/ Pellet feeds: The feed is designed to exploit the genetic potential of

broilers in finisher stage with uniform crumbs (29-42 days)

o Broiler concentrate feed: Designed with high nutrition level with adequate medication,

palatability and free from contaminants to provide desired growth of broilers

• Dairy Feed: High quality cattle feed is especially prepared for both cattle and buffaloes

consisting the high protein and fat content by modern technology with testing labs to

maintain the quality of products. Product portfolio consists of Super-20, AASTHA and MILK-O-

MILK.

• Pig Feed: The unit produces products according to the client's demand and specifications and

manufactures products for nursery, grower and breeder pigs.

• Fish Feed: It provides balanced nutrition with high digestibility fish feeds which has proper

shrinking rate, does not release fat and withstand storage. Product portfolio consists of

Anmol Premium Fish Feeds and SATHI.


2 Financial figures from Annual report of Avanti Feeds 2013-14

6. Avitech Nutrition Pvt. Ltd

Avitech Nutrition Pvt. Ltd, a member of Keggfarms Group, is market leader in the field of animal

nutrition in India. The organization is contributor of state of the art technologies in the feed additives

sector, a nutrition laboratory, a service provider apart from being India's leading producer of

premixes.

Avitech commenced operations in 1997 as a division of Indovax Pvt. Ltd (a Keggfarms group company)

which is a leading manufacturer of poultry biological. With the objective of providing quality premixes

to the Indian feed sector, a premix manufacturing facility was established in the year 2002. A

sophisticated and advanced lab, NUTRISYS (one of the leading animal nutrition lab in India) was set

up in the same year to appraise the quality of raw materials that were required to be included in

premixes which were later enhanced to include tests required by feed millers in addition to micro

ingredient analysis. Product portfolio includes poultry (chick boost, biomix, antioxidants, gut health

regulator & enzymes) and dairy (buffer premixes, organic trace minerals and third generation bypass

fats).

7. Kapila feed

Kapila Krishi Udyog Limited is one of the leading cattle feed manufacturer in India offering a complete

package of nutritious, hygienic and healthy feed for every breed of cattle. Kapila cattle feed was

established in the year 1992 and currently with a production capacity of 1000 MT per day. The feed is

especially prepared for buffalo & cows considering their high level of protein & fat requirement. The

company's compound feed has been especially designed for high yielding cattle and has a network of

over 500 distributors, dealers and C&F agents. The products are available in both pellet & mash form

under category like Kapila I.S.I. Standard Cattle Feed, Kapila Super Cattle Feed, Dairy Special Bypass

and Buffalo Special Feed.

8. Indian Broilers Group (IB Group)

The IB Group commenced its journey in the year 1985 and set up its first poultry feed plant in 1999. IB

Group manufactures high quality feed with remarkable longevity. The feed plant ensures consistent

yield of quality pellets and consistent research has led in determining optimum particle size suited to

each category of animal. The company utilizes advanced levels of conditioning system to ensure the

best starch gelatinization process, an important standard in feed production. Presently, the group

produces pellet feeds for poultry and extruded feed for fisheries under pre-starter, starter and finisher

categories. Apart from this IB Group is also the largest fish feed manufacturer in the country and

exports high quality feed to countries like Bangladesh, Nepal & Middle East under the ABIS brand

name. The production of IB group feed unit is 1850 MT per day (info from company's webpage)


9. Japfa Comfeed

Japfa group was formed in January 18, 1971 as a 50-50 venture between PT Perusahaan Dagang &

Industri Ometraco and International Graanhandel Thegra NV of the Netherlands which mainly engaged

in commercial production of copra pellets. In the year 1975 the group commenced its first poultry feed

mill in Surabaya (Indonesian island of Java). Japfa Group operations are vertically integrated from

animal feed manufacturing, breeding to producing commercial livestock and aquaculture products for

further processing. Japfa Group has Poultry operations in Indonesia, India, Vietnam and Myanmar,

Beef cattle in Indonesia, Australia and China, swine in Vietnam and aquaculture in Indonesia.

Japfa Comfeed India Pvt Ltd (JCIPL) is a subsidiary unit of Japfa Limited. JCIPL business in India

includes Feed Division which manufactures poultry feed, Contract Growing Farm Division which

produces broiler chickens & Parent Stock (PS) Division which produces day old chicks to produce

broiler chickens through Contract Growing Farms (CGF). The company currently is operating 5 Feed

mills, 4 breeder farms, 400 commercial farms and 11 hatcheries in India.

10. Mulpuri Group

Mulpuri Group is one of the fastest growing diversified conglomerates involved in agro, poultry and

fisheries in India. The group is a highly focused and synergistic that adheres to the highest standards

of excellence and compliance. The group was incorporated in 1982 and since its inception; the

company has risen steadfastly from humble beginnings to a massive conglomerate that now provides

employment to over 3000 people across varied sectors. The group is the second largest producer of

eggs in India, besides being known for pioneering ground breaking technological developments in the

poultry sector. The group is into multi business such as poultries, agro tech, fisheries, foods & feeds

and aqua processors

Mulpuri Foods & Feed Pvt. Ltd: The division is built up with state of the art machinery and ultra modern

technology. The extrusion plant was initially supposed to be ad hoc for the group's farm. It is

inseparable and key part of the group's fishery business with a daily production capacity of over 660

MT and spread over 100,000 sq ft.

11. Charoen Pokphand India (CP India)

CPF India is a subsidiary unit of the Charoen Pokphand Group, a Thai multinational conglomerate CPF

today has become the world's largest producer of animal feed and shrimp, and one of the leading

producers of poultry. The business has diversified into various industries such as Telecommunications,

Retail Services, Automotive, Information Technologies etc. with 127 subsidiary companies and

presence in over 20 countries.

CP India was incorporated in 1992 and the 1st feed mill started its production in 1996 in Chennai. The

company started its broiler breeder farm & hatchery unit at Bangalore in 1998. In 2009, it built up own

hatchery at Pune. CPF's core business is divided into 2 main units- Livestock & Aquaculture business

which is fully integrated operations from sourcing of raw materials for animal feed production,


manufacturing and distributing animal feed, breeding of animals, animal farming, processing meat, to

manufacturing further processed food products, mainly chicken, duck, swine, shrimp and fish.

• Livestock feed business engages in manufacturing and distribution of livestock feed with

chicken feed as the major product. CPF range of feeds and concentrates for broilers, breeders

and layers have been well tested and accepted by poultry farmers due to the consistency and

quality maintained from batch to batch

• Aquatic business engages in the manufacturing and distribution of animal feed, with shrimp

feed as its major product. CP Group is the world's largest shrimp feed producer and ranks

among the top five of the world's largest animal feed producers. The technical animal feed

produce and technical knowhow and experience accumulated throughout the years enable the

customer to achieve higher profit with minimal risk

CPF range of feeds and concentrates for broilers, breeders and layers have been well tested and

accepted by poultry farmers due to the consistency and quality maintained from batch to batch. Also,

CP Group is the world's largest shrimp feed producer and ranks among the top five of the world's

largest animal feed producers. The technical animal feed produce and technical knowhow and

experience accumulated throughout the years enable the customer to achieve higher profit with

minimal risk. The total revenue of CP Aquaculture (India) Pvt. Ltd. was USD 211 million and net profit 3was recorded at USD 7.26 million in the year 2014

12. SKM Animal Feeds and Foods

SKM Animal Feeds and Foods India Limited is engaged in manufacturing animal feeds and foods. Its

products include dairy cattle feed, sheep and goat feed, poultry feeds, layer feed, broiler feed, broiler

breeder feed and country chicken feed. The company was founded in 1981 and is based in Erode

SKM Feeds have “State of the Art” feed plant with Modern Technologies to produce hygienic quality

feeds for Livestock & Poultry at Erode and Chitradurga, Karnataka.

The Erode unit is fully automated and largest feed plant in India and consists of Intake, Grinding,

Mixing, Molassing and Bagging sections with a provision to add pelleting section to produce 5 TPH of

mash feed and was further enhanced by 1 T Batch Mixer in 2001. The plant is running at a capacity of

150 MT per shift for mash feed. SKM Feed Plant production capacity is 3,300 MTs per day. Feed Plant

has separate lines for the production of broiler feeds and layer feeds in mash, crumble and pellet form;

cattle feeds in mash & pellet form.

13. KSE Limited

KSE Ltd is the largest producer and supplier of cattle feed in Kerala. It deals in cattle-feed mixture,

milk, ice cream and allied products. It is marketing annually about 2.00 lakh tones of superior quality

cattle feed. KSE manufactures seven types of cattle feed; three in mash and four in pellet form. The

company markets these cattle feed under the brand name of 'KS'.


3 Annual report of CP Foods Public Company Limited, 2014

KSE owns four cattle feed plants. Three plants are located in different districts of Kerala and one plant

is based in Tamil Nadu. The total capacity of the cattle feed division is 400,000 tonnes apart from

outsourced manufacturing.

KSE also has Vesta Brand ice cream in the dairy processed segment apart from milk, ghee etc

14. Cargill Limited

Cargill deals in feed ingredients, feed formulations, management solutions, risk management services,

compound feed, premixes, feed additives and customized solutions. It has two divisions- Cargill Feed

and Nutrition and Cargill Premix and Nutrition; and markets a range of compound feed and premix

products under several brands including Cargill, Purina, Provimi and Citura.

Cargill India has seven animal feed manufacturing units in India; and is now setting up an INR 100

Crore animal feed mill at Bhatinda, Punjab besides planning another at U.P


New Initiatives in Indian Feed Sector4

Some path breaking initiatives are being seen in the India Feed sector from feed production to storage

as follows:

Silage

Silage making means preservation of chaffed cereal green fodder in anaerobic condition by way of

fermentation method. In anaerobic condition (no air inside pit/tank),with the help of micro

organisms, sugar contained in green fodder is converted in to Lactic acid ,which help to preserve the

green fodder for longer duration. These effects in to preservation of chaffed green fodder in silo

pit/tank as silage for longer duration (6 months or max. a year if good care is taken). To prepare best

quality silage, cereal green fodder like Green fodder maize, Fodder sorghum, Bajara, Hybrid Napier,

Sugar cane tops, Oat, Marwel etc are required. Preference for cereal green fodder (monocotyledons) is

due to it has more sugar content than protein, as sugar is utilised in fermentation process to make

lactic acid by microorganisms.

Benefits of silage making

ü Silage requires less space for storage as it is pressed in pit/tank than hay making.

ü Due to lactic acid in silage, it is easily digestible to animals, so energy required for digestion is

used for other purposes like milk production.etc.

ü Silage is tasty & flavoured, so it increases appetite of dairy animals.

ü Important thing behind to adopt silage is in scarcity it provide supply of fodder to dairy

animals. Situations like drought, high rainfall & scarcity of fodder, farmers may use silage for

feeding to dairy animals. (Rain fed area where shortage of green fodder is for March to June &

in high rainy area or water logged lands, it is impossible to cultivate or harvest fodder)

New Initiatives in Indian Feed Sector4


ü Due to treatment of additive for silage, farmers can supply energy, mineral & vitamins to dairy

animals.

Balanced ration program under National Dairy Plan for Dairy Sector

Ration balancing is the process to balance the level of various nutrients of an animal, from the

available feed resources, to meet its nutrient requirements for growth, body maintenance, pregnancy

and milk production. The program aims to educate the farmers on optimum feeding of animals to

optimize milk production by efficient utilization of locally available feed resources at the possible least

cost.

It has been demonstrated that balanced ration has led to improvement of fats; milk yield and

reduction in methane emissions.

Green fodder hydroponics

Green fodder Hydroponics is the science of growing green fodder without using soil inside special

machines. The physiological requirement of green fodder is met without the use of soil. Plants are

rooted in an inert medium and nutrition is provided by water soluble mineral elements.

The production cost of each kilogram of green fodder comes to Rs 5.00 approximately. The machine

runs with the help of electric power and dimensions are around 2m long, 2m wide and 4m high. Fodder

is grown on trays placed in several layers. Around 1,000kg of hydroponics fodder and requires an area

of 300sqft as compared to the 2,700sqft area required for conventional fodder. Production of 1kg of

fodder requires 3 litres of water against 80 litres per kg for producing conventional fodder.

Hydroponics green fodder can be harvested on every seventh day in comparison to harvesting

conventional green fodder every 30-45 days. The fodder is grown in an aseptic condition while

conventional fodder is affected several pest and diseases. It can be harvested throughout the year

while green fodder is available only for few months

Bypass protein feed

Bypass protein feed contains a large percentage of solvent extracted protein meals in treated form,

grain by-products, whole grains, molasses, minerals and vitamins. The special feature of the

formulation is that more than 70 per cent of the total protein in the feed is rumen undegradable

protein.

Bypass protein feed is a new generation cattle feed in India and is manufactured by a special chemical

treatment, developed by the National Dairy Development Board (NDDB)


Conclusion5

Feed sector in India is clearly at an inflection point currently and is poised for a glorious future.

ü The emergence of modern dairies ranging from 50 animals to upwards of 500 animals is

progressing across India.

ü Exports of aqua products are on the increase and India is a leading player of South Asia

currently.

ü Poultry segment is seeing a high growth trajectory due to increase of home consumption as

well as Quick Service Restaurants.

All these have led to an increased usage of high quality raw material for feed across all subsegments in

India.

However the following points have to be factored in:

ü Disease outbreaks are common and remain the single largest challenge for the poultry, cattle

and seafood segments

ü Indigenous dairy breeds may not respond to compound feed effectively, which leads to

farmers' reluctance to use formulated rations for their cattle.

ü Lack of awareness and low hygiene conditions add up to the overall health of livestock

Conclusion5


Roadmap6

India is mainly an agricultural economy where around 75% of its entire population is involved in this

sector either directly or indirectly. Agriculture is heavily dependent upon the climatic conditions

especially the monsoon seasons. Consequently, the agricultural output gets highly affected due to

drought like conditions or scanty rainfalls

Animal feed industry is also dependent upon these agricultural outputs and in turn gets affected due

to shortage of raw materials. There has been a sharp rise in wholesale prices leading to inflation in raw

material prices in 2014 leading to increase in feed prices for all segments of feed

Roadmap6


Raw material % increase in 2014

Soybean 18

Oil Cake 9

Bajra 7

Maize 3

Wheat 2

Sugarcane 1

In dairy sector in India, majority of farmers own native or 'desi' breeds of cattle as the price of

crossbred species are at least five times the price of the native variants. The compound feed available

in the market doesn't give the same result when it is fed to the native variants in comparison to the

crossbred variants. Hence, the farmers feed their cattle with home-made feeds rather than balanced

ration that is currently prescribed.

With the growing opportunities in the aqua/marine, meat, poultry and milk sector, the concept of

animal feed is converting to animal nutrition. The feed manufacturers are realizing the importance of

serving animals with essential nutrients as it strengthens the immune system of animals, improves

their health. This increases the productivity of the animals, which eventually increases revenue in the

acids & nutrients in animal nutrition market. The changing consumer patterns that result in the

growth of non-vegetarian food that includes, meat, chicken, sea food and others forms a major share

in the revenue generated by animal feed manufacturers. The increasing demand for animal products is

leading the animal manufacturers to contribute into the animal nutrition segment as well. The feed

sector needs to look afresh into various initiatives across the feed chain from farm production to value

addition. A roadmap for the feed sector is proposed as follows:

• Value Chain integration by backward integration into large scale corporate farming of

commodities/ contract outgrower farming

ü Under such large scale aggregation clusters; setting up of silos/ agri infrastructure for

scientific storage of commodities and feed grain crushing capacities

• Technology up gradation by introducing harvesters, feed mixers

• Awareness of long term storage systems so that enough feed is available in offseason.

• Mission mode for balanced ration for all subsegments and incorporation of private sector in

schemes rather than providing grants only to government bodies

• Post harvest losses in the country are rampant and start immediately from storage at

warehouses to the distribution centre till it reaches consumer. This is true for dry commodities

as well as wet items including aqua/ marine. If all these wastages are channeled to the feed

sector; the quality and quantity of feed will go up and will keep prices of feed at affordable

level

• Subsidy schemes- Manufacturers should take advantage of agri infrastructure schemes to add

capacities for production and storage:

ü Silo schemes

ü RGY scheme for warehouses

ü Technology up gradation scheme by Ministry of Food Processing

ü State level subsidy schemes including National Mission on Food Processing

ü Specific state level schemes e.g Bihar government has taken the lead for feed production


Ø CLFMA – Livestock Industry Survey Report 2014

Ø Alltech 2015 Global Feed Survey

Ø Feed International/WATT Research

Ø WATTAgnet.com

Ø World Resources Institute

Ø Industry Sources


References/ Bibliography

indian feed sector - yes bank · pdf filepoultry feeding system in india 15 aqua feed industry...

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