animal feedi industry_india

Animal Feed Industry Underdeveloped; with Potential for Growth Sep. 2016

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Animal Health – Multiple Opportunities

Confluence of Opportunities

• Largest milk producer as well as liquid milk

consumer in the world (>16% of world

production; growing at 4% CAGR)

• Growing population with rising income

levels, demand for animal proteins (milk and

meat)

• Nuclear families fuelling growth in

companion animals segment

• Abundance of entrepreneurial spirit

supported by easing of policies and enabling

environment

Da

Dairy Industry

2nd largest cattle population

>51% world’s buffalo population

Poultry Industry

4th in Broiler meat production

3rd in egg production

Aquaculture

2nd largest aqua market

Largest exporter of shrimps

Companion Animals

Fastest growing segment at >14%

annually

4 Fold Opportunity

Source: Press Reports; AHI Analysis



Animal Health – Potential for Growth

6%

35%

38%

45%

12%

3%

13%

19%

82%

62%

49%

36%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

India

China

Brazil

US

Low Animal Protein & High Reliance on Cheaper Plant Proteins

Animal Milk Plant

• With the increase in per capita

incomes – proportion of animal

and milk protein increases in

monthly baskets

• Similarly with rising incomes,

consumption of processed milk

and meat products increases

• Narrowing price gaps between

plant and animal proteins

Source: BCG Analysis, Word Bank, Ministry of Agriculture, Int. Egg

Commission; Press Reports; AHI Analysis



Animal Health – Headline Numbers

191

39

109

51

0 50 100 150 200

Cattle Total

Cattle Productive

Buffaloes Total

Buffaloes Productive

Dairy Population (Million)

Dairy Cattle: ~ 70 to 90 Million Productive Animals

3,400

260

25

0 1,000 2,000 3,000 4,000

Broilers

Layers

Breeders

Poultry Population (Million)

Per Capita/ annum World Avg India

Eggs 168 Nos 62 Nos

Chicken Meat 14.2 Kg 3.1 Kg

9.57

1.01

0 5 10

Fish Production

Shrimp Production

Aqua Production (Million Tons)

5.05

1.47

Exports (US $ Billion)

Shrimps

Fish

Source: DAHD Annual Report; Press Reports; AHI Analysis



Animal Health – Multiple Opportunities

112.2 116.4 121.8 127.9 132.4 137.7 146.3

0 20 40 60 80

100 120 140 160

12

9.8 8.6 8.5 8.0 7.7 7.4 7.4

6.4 6.0 6.0 5.8 5.0

4.0

1.6

0

2

4

6

8

10

12

14

IL CA DK KR JP UK NO DE CH AT FR AU SA NZ IND

Milk Production (000’ Kg/Lactation)

• Milk production growing at around 4% annually

• Milk demand reportedly increasing at around

5% annually

• Demand may exceed Supply by 2020-21

• Lowest per animal productivity

• Genetics and Nutrition are the only

recourses for better per animal

productivities

Production MMT

Source: NDDB; Press Reports; AHI Analysis



Animal Feed Industry – 3 Sources; 3 Figures

9.4

2.5

7.5

1

Annual Feed Consumption (Million Tons); Rabobank Report 2015

Broiler Layer Dairy Aqua

Total Market:

~ 22 Million

Tons

10.0

3.0

7.5

1

Annual Feed Consumption (Million Tons); Yes Bank Report 2015


Total Market:

~ 23 Million

Tons

11.6

9.3

8.3

1.1

Annual Feed Consumption (Million Tons); Alltech Survey 2016


Total Market:

~ 31.5 Million

Tons

Reality lies in

between

Source: Rabo Bank Feed Report; Yes Bank Feed

Report 2015; Alltech Global Feed Survey 2016



Segment % Adoption Additional Potential

Broilers 90% ~ 1 Million Tons

Layers ~ 5% ~ 11 Million Tons

Dairy Animals ~ 12% ~ 57 Million Tons

Aquaculture ~ 15% ~ 6 Million Tons

Current Market ~ 23 Million Tons Additional Potential ~ 75 Million

Tons

Animal Feed Industry – Scope for More

• Dairy and layer segments yet to adopt commercial, compound feed

• Majority of layer farmers “home mix” feed

• Aquaculture feed growing but requires strong R & D

Category

Growth Rate

~ 7 -8%

~ 5%

~ 4%

~ 9%

Source: Rabo Bank Feed Report; Yes Bank Feed Report 2015; Alltech Global Feed Survey 2016; AHI Analysis



Animal Feed – Opportunities & Challenges

• Current low levels of compound feed

adoption except Broiler segment

• Poor productivity in dairy animals

warrants aggressive and extensive

usage of compound feed

• Entry of international companies such as

Cargill etc for increased awareness

• Fluctuations in prices of major

commodities used

• Poor quality of available commodities

and curbs on import of maize and soya

• Lack of awareness in small and

marginal dairy farmers

• Lack of remunerative prices of dairy

milk impacting adoption of commercial,

compound feed

• Low cost, home mixers / “chakki

mixers”



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