Wednesday, 20th September 2017

Value-added products: Poultry industry faces hurdles, but expansion plans go on

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LAHORE: The concept of processed chicken is not new in Pakistan. Many firms are now coming up with innovative means of providing healthier poultry and its byproducts for consumers.
Though the brands supplying value-added chicken products to local and multinational retail outlets are numerous and the trend is on the rise, the pioneers of this industry are facing many obstacles because of import duties. Owing to this many have quit production and have found it more lucrative to import value-added chicken and market it under their name. However, some local players are still committed to pressing on with their operation.
“Import duties are a hurdle. Indonesia and Malaysia have zero import duty, while China has 25%. But still we would like to grow and continue as per our future expansion plans,” said K&N’s Chief Executive Officer Khalil Sattar in an interview to The Express Tribune. “For a progressive company, there is never an end, whether conditions are favourable or not.”
K&N’s was established in 1964 by Sattar when he was still studying in college. He started with an aim to provide better nutrition to people, with a broiler chicken farm and a thousand chicks, providing them the best feed.
He established the first state-of-the-art environmentally-controlled shed in 1982. Initially, people thought the idea was ridiculous, but later other industry players followed suit and started making investment.
The company has 97 outlets nationwide and its products are sold in other retail stores as well. Over the years it has added more products and business activities to its portfolio and is entirely self-sufficient; right from poultry breeding to producing ready-to-cook products. The only exceptions are a few spices that are imported to meet requirements of local clients.
A number of foreign experts have also been hired to help treat chicken under the watchful eye of poultry nutrition, health and housing specialists. Chicken is kept in large, clean and airy sheds equipped with latest heating, cooling and ventilating equipment, making K&N’s a leading player in the processed chicken segment.
In coming years, Sattar feels it might be difficult to purchase live chicken from open market as with growing health consciousness, people are making healthier choices. Increased urbanisation and higher disposable income will help further, as people will spend a chunk of their incomes on healthier food options.
“Majority of the public is still unaware of what processed chicken really is. Annual growth of the industry is merely 3% to 4%, which is not enough.”
In Pakistan, there is still a lot of room to expand, since the processed chicken industry is in its infancy and comprises only 1% of total chicken market of the country, Sattar said, adding a 1% improvement in the gross national income leads to a 2% rise in chicken demand.
The company currently is not contemplating processing other meat items like mutton and beef. Sattar believes that there is still much to be covered in processed chicken items.

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