Feasibility study of broiler feed pelleting

Abstract

Brooke Bond Lipton India Ltd. (BBLIL) is the largest foods company in India and is present in a number of product categories. One of BBLIL's division is the Animal Feed Stuff (AFS) division which is engaged in the manufacture of feeds for cattle, poultry, fish, prawns and lab animals. This project has been done for the animal feed stuff division of BBLIL. The objectives of this project is to identify the business opportunities and the related manufacturing strategy for pelleted broiler feed. This project was undertaken keeping in view the threat of entry of several feed manufacturers into the broiler feed market through pellets, (including multinational firms specialize in in feeds).The methodology adopted for evaluating the business opportunity was through a survey of 18 farms in the Pune and Coimbatore markets and survey of various literature's published with regard to pellets and pelleting. For determining the plant capacities, a volume and cost sensitivity analysis was done for the Coimbatore, Hyderabad and Pune markets based on the farm profile in these markets. The market survey revealed that farmers consider the "cost of feed per kg of meat produced" as the most important parameter. This was followed by weight gain and credit. It was established that if pellets are to be launched it has to be targeted at the small and medium farms only. (i.e. < 10,000 birds per farm and > 10,000 but <25,000birds per farm respectively). The survey also revealed that the premium that farmers are willing to pay for pellets is not more than 5% of the price of mash. The literature survey revealed that the FCR benefit of pellets is about 5%, the weight gain improves by 5% to 15% and steam pelleting does not have any impact on the nutritional values of the feed. Also, it along with the feedback from the farms revealed that three pellet sizes may be required for "problem free" feeding of the birds. The results of the survey suggest that the reasons for the improved performance of pellets could primarily be due to lower feed wastage and less time and consequently less energy spent by the birds in feeding/eating pellets. Vitamin 'A' is reduced by 12% to 24% whereas the lysine in the grains is not affected. The pellet costing shows that the incremental benefits expected from pellets will not be able to compensate for the higher cost of pelleting, though a 30% conversion of small farmers in the Coimbatore market justifies the cost pelleting the feed. It has been concluded that the broiler pellets business is not viable at this stage and hence an entry into broiler pellets is not advocated at this stage.