CHAPTER 2

2.1 Introduction To Poultry Industry

Poultry is one of the fastest growing segments of the agricultural sector in India
today. Driving this expansion are a combination of factors - growth in per capita
income, a growing urban population and falling real poultry prices. Compared
with meat, poultry industry has registered significant growth. India ranks fifth in
the world with annual egg production of 1.61 million tones. Poultry exports are
mostly to Maldives and Oman. Indian poultry meat products have good markets
in Japan, Malaysia, Indonesia and Singapore.
India has gifted the world the species Red jungle and Silver jungle fowls, out of
whose progenies, domesticated and crossbreed have emerged the "Pure lines" of
today. The history of poultry in India is about 5000 years old. But the strange
paradox of this country is that although it introduced poultry to the world it itself
remained indifferent to it for a long time. The main factor was religious taboo for
poultry products in many Indian communities. But the total credit for developing
the poultry in this country should go to the Christian Missionary Organization and
some British people who brought some superior exotic breeds in beginning of 20 th
century. In 1950 the production of egg was only 1.8 billion eggs, in 1995 it was
27 billion eggs and in 2005 it is 42 billion eggs. The poultry industry can be
classified into broiler industry and layer industry. Late Dr.B.V.Rao, called Father
of Modern Poultry in India.Dr.B.V.Rao was instrumental in setting up the
National Egg Coordination Committee in 1982,it is a charitable trust with 24
zones and 118 local committees has about 25,000 farmers as its members spread
out all over India helping the layer farmers obtain reasonable, remunerative,
viable price for eggs. Broiler industry is concerned with poultry meat and layer
industry is concerned with egg production. BROMARK (Broiler marketing
Cooperative Society): Bromark, also a brainchild of late Dr.B.V.Rao is an all
India Broiler Farmers' Body registered under the Multi State Cooperative
Societies Act in 1994. The objective of the Bromark is to ensure the gap between
producers price and consumer price is reduced and promote the consumption of
chicken meat by advertising on its nutritive value.

Poultry
Production
in
India

The
Current
Scenario
India has 1.23 billion people and the number is growing every year. The focus is
on Development meaning Good Food, Better Health & Living conditions to
everyone. People spend more money on food when they earn more. Healthy food
at attractive price will be the issue in focus. Eggs and chicken are accepted by all
communities and are available at the most reasonable prices. Within a span of 25
years, the egg production has gone up to 70 billion from few millions and the
broiler production has gone to 3.8 million tone from nowhere. Poultry is the most
organized sector in animal agriculture, worth rupees one lakh crores.
India is the third-largest egg producer after China and USA and the fourth-largest
chicken producer after China, Brazil and USA. The per capita eggs consumption
has gone up from 30 to 68 and the chicken from 400 gm to 2.5 kg.Human
nutritionists recommend 180 eggs & 10 kg chicken per year. Most of the
countries consume over 240 eggs and 20 kg of chicken. There is scope for
enhancing the production. Production is getting more organized and move ahead
of consumption resulting in optimum prices and with minimum profits.
Eggs and chicken were agriculture produce few years ago but are food items
today. Safe food is very important. Besides maintaining his production efficiency,
the producer has to concentrate on the nutritive values, the adulterants and
contaminants of his produce. The ministry of food processing industries, Centre
for Science and Environment and food inspection authorities started keeping
track
ofeggsandchicken.

Poultry Production has three segments:

1. Layers
2. Broilers
3. Backyard / Family Production (Both eggs and chicken)
Layer Industry (Eggs)
The small layer units are becoming unviable. Large units with million birds and
100,000 birds in one house are coming up. Some 70% of the layer birds were in
the states of Andhra Pradesh, Tamil Nadu, Maharashtra & Karnataka in south and
only Punjab in the north. The eggs were transported to other states. More
production units are coming up in Uttar Pradesh, West Bengal and Bihar now.

North-Eastern states are planning production units to get fresh eggs at more
reasonable costs saving time and money on transport.

Larger units go for bulk purchases, seasonal purchases at harvest and even
go for import of feed ingredients. The production costs can be managed.

Mechanisation in feed production, feeding the birds & egg handling is

possible with larger units.

Long distance supplies, exports & further processing can be planned with
mass production.

Larger units can adopt better technology like least cost feed formulations
& biosecurity protocols to prevent diseases.

The eggs in supermarkets will be graded, cleaned, well packed & labelled
for the nutritive value & use before date.

Promotion of egg consumption in mid-day meal schemes, hospitals will

boost the demand.

Shell eggs & egg products, like pasteurised and processed liquid eggs
have good markets in many countries like the Middle-East and Japan. We
have to enhance the quality standards to meet the requirement of those
countries.

These large houses with mechanisation require huge investments. The cost of
finance is a large part of production cost of an egg.

TABLE 2.1 Growth of the industry

Parameter
1990
Layer birds (crore)
10
Layer feed price (Rs)
12
Egg price (Rs)
1.5
Eggs per head/ year
20
Eggs per hen
260
Average layer farm size
20000

2015
24
22
2.90
68
310
200000

Separate brooding
Feed automation
Small eggs discount
Eggs cleaning & packing

10%
10%
Nil
No

80%
80%
Discounted
Imp

The price of feed is increasing. The egg prices also increase but at a low pace.
The gap is being met with efficiency in production.

Feed & Egg Prices

India has developed its own systems of housing & management, which are most
cost-effective. The hens are happy in the hands of the Indian farmers and both of
them are doing good job in filling up the food needs. The shell eggs are cheapest
in India, though the inputs cost is not the lowest. It is due to improved
efficiencies achieved by the farmers by producing more eggs per hen housed at
low input costs.
Broiler Industry
Broiler bird was not known in India till 1975. Chicken was spent hens or male
birds. The commercial broiler chicks ready in 60 days, more efficient with tender
meat started coming as separate entity after 1975. The hatcheries imported the
parents and the grandparents of the hybrid broilers. The breeding operations
started in Delhi and later shifted to South India. Movement of parent stock,
hatching eggs, day-old chicks initiated the broiler growing everywhere. The
hatcheries sold day-old chicks to farmers who raised them and sold to traders.
Live broilers became a separate food entity in 10 years. Live broilers are not
transported for long distances.
Tremendous technical work has gone in to broiler production in the fields of
genetics, nutrition, breeder management, hatchery management, housing and
disease management. The broiler growing period has gradually come down to
less than 40 days from 60 days.
More broiler growers and improved efficiencies have changed the shape of the
industry. Feed (65%) and chicks (25%) account for 90% of the broiler inputs and
the consolidation started in the production. There is a wide gap between the
economics of the smaller units purchasing feed & chicks and the ones using their
own feed & chicks. Big companies with larger investments came in and the
smaller units compromised on growing the broilers for the company, restricting

themselves to the 10% of the production cost. This synergy in the form of
Contract Farming is an excellent development that took place in India. Farmers
with small land-holding find growing broilers on All-in-All-out basis for a
company, in a poultry house built on the land is giving better and assured returns
compared to agriculture which is more nature-dependent and uncertain.

The genetic improvement by selective breeding is giving consistent

improvement in broiler growth and feed efficiency. 0.75 days reduction
and 75 gm less feed per kg of chicken every year.

The large feed mills adopting feed production technology is making safe
and efficient feeds at the best prices possible. They concentrate on
procurement of materials on the basis of quality and price.

Parent breeder & hatchery management is producing healthy chicks.

All-in-All-out rearing is giving excellent results. 2 kg broilers produced

on 36 days with 1.5 kg feed per kg chicken with less than 3% mortality
are being achieved on low- cost open houses reared by ordinary farmers.

The companies are reaching the housewife directly to supply the chicken,
cutting down the middlemen.

Some companies are in for further processing and value addition to reach
the consumer with Fast Food, offering them the best food at the best
price.

Fewer companies with branded products will be competing in Safe

Food initiatives.

Export markets can be effectively tapped with international quality

standards at the larger units.

Investment in cold chain will come to move the products safely from
surplus areas to scarce areas, which will stabilize the markets. This is
essential part of export also.

The Middle-East Arabian countries still import large quantities of

chicken. India has a good opportunity in these markets.

TABLE 2.2 Growth in broiler industry

Parameters
1990
Broiler parents housed (cr)
0.7
Broilers/month (crore)
5
Broiler feed price (Rs/kg)
20
Chicken per head (kg)
0.4
Broiler price/kg live (Rs)
25
Broiler integration
0%
Broiler FCR
2.2
Days to slaughter (2 kg)
48
Multi-age group farms
90%
Chicken processing
1%
Antibiotics issue
Nil

2015
3.5
25
30
2.5
65
60%
1.65
38
10%
7%
50%

The feed & chicken price go up. The chicken prices move very slowly. The gap is
being met with efficiency in production.

Backyard / Family Production (Both eggs and chicken)

India has 60% rural population depending on agriculture. Poultry has

been there in the backyards of most of the houses since ages, forming a
part of nutrition and family income. At one time, 30% of the eggs
produced were in the backyards. The birds available there were never
improved and were inefficient for both eggs and meat production.

Grains, fruits, flowers, vegetables & milk are all produced by the small
farmers. Even the products are marketed by the farmers directly in weekly
village markets and Collection Centres established by government or
companies.

The government started encouraging the backyard poultry. Improved

varieties Low technology input birds are bred for this purpose, which
are genetically more efficient in production compared to Native
chicken. The low technology input birds are mostly dual purpose. The
birds grow faster than native chicken reaching 1.5 kg weight in 45 days
but can withstand variable feed qualities and also supplement themselves
by scavenging. The female birds lay 160 eggs against the native birds,
which are broody & do not lay more than 60 per year.

Mother Units are being encouraged to take care of the brooding &
vaccination in the early part of growing (first four weeks) before they are
distributed. This ensures disease security.

Cluster farming in rural areas is possible with these chicken for

enhancing the meat production in the lines of broiler farming.

A group of 8 to 10 farmers or educated youth can form a cluster and grow

the birds in groups of 500 to 1,000 birds in low-cost houses as done in
broilers. The birds are grown in All in All out basis and the producer
works by himself.

The group can graduate in to organic chicken by making their own lowcost feeds without chemicals and antibiotics. The cluster can market the
birds in local village mandis or supply them to supermarkets with a brand
name.

The slow growing multicoloured chicken with tougher meat fetch better
price compared to broilers whose meat is becoming tender every year.
This area is developing as a niche market with better returns.

Family laying units with no specific investment on large houses, bank finance
& labour on the lines of milk production are being attempted in many states to
augment the egg production.

Mother units grow the pullets up to 15 weeks and complete all the
vaccinations before supply to the beneficiaries.

25 to 500 birds can be kept in the same cattle shed with cages installed
with nipple drinking system. The unit requires less water and the poultry
manure can be used for agriculture lands. Once established, feed
manufacturing companies will supply the layer feed like the cattle feed.

Eggs are less perishable than milk. Need not be rushed to the market.
Eggs can be supplied to village schools for midday meal schemes and
hospitals without involving transportation.

Brown colour, sturdy layer type birds, laying 300 eggs and more are being
considered for Family Laying Units. States like Kerala have adopted this

system as an alternative system of egg production to commercial poultry.

Poultry Inputs Situation in India
Poultry production is conversion of vegetable protein to more balanced animal
protein. So far, India has reached poultry feed requirement of 32 million metric
tonne (MMT) per year.

The grain requirement is 65%, say 20 MMT. India produces 24 MMT of

maize alone. The industry, drifted from only maize to rice polish, and
other grains based on availability. 2016 is the first year where the industry
is looking at import of grains. Information of fluctuating prices & market
accessibility & commercialisation of feed production is driving large feed
factories towards global markets.

The soya production also has been growing steadily in Central India. The
industry shifted automatically from fish meal to soya. With production of
11MMT+ of soya seed per year, the livestock industry can get its required
7MMT of de-oiled soya within the country. Due to exports, Minimum
Support Price to farmers on seed and hoarding, the prices of this
commodity has been high for poultry. Government is allowing soya
imports without import duty. Large feed mills and poultry producers may
opt for bidding in global markets. Other cakes like sunflower, mustard,
and guar are also used. 5.00 MMT of cotton seed cake which goes for
cattlefeed also is being processed to suit broilers. Dried distillery grain
products are another alternative stimulated by the attitude of the soya
industry.

Amino acids and vitamins are largely imported either as raw materials or
as feed additives. Major and trace minerals are available in the country.

The international market for vaccines is very competitive. Vaccine

production companies in India are doing well due to occasional bans on
imports and due to need of autogenous vaccine. Some of the vaccines are
also being exported.

Poultry Exports from India

The final food products eggs and chicken are not exported in huge quantities.
There is a huge gap in production and need within the country. The food markets
in affluent countries are very quality- and price-sensitive. The prices realised in
outside markets by competing with larger players like Brazil and USA have not

been very attractive. The situation may continue for some more time. There are
other poultry-related exports which are possible.

The poultry in the European Union and Americas (both north and south)
is stagnant. Their exports are slowing down because all importing
countries started their own productions.

Asia has been a target market for the EU and Americas for a long time.
Asian poultry has recorded the fastest growth during last two decades and
is planning for exports after meeting domestic demand. Thailand and
China are into exports already.

Oil-rich Middle-East is still happy importing the final products which is

easier than importing all the inputs like chicks, feed, machinery and
labour.

Africa is the growth area in poultry for the next two decades. Africa has
favourable climate, agriculture-based economy, huge working population
and deficient in production.

India has a great opportunity to export many things in poultry to Africa.

India has Breeding Research in poultry and developed birds (breeds)
suitable for open houses, which can take lower quality feed and resist
lower level infections. They can prove better for Africa.

India produces the best quality hatching eggs which can be exported to
the Middle-East and Africa. Hatchery is a better option to start with,
before going in for breeding stocks. This involves mostly airlifting of
eggs and liasoning. APEDA, which is created for this purpose, is not
helping much.

Production technology adopted in India involves less investments on lowcost housing, encourages more manual labour, and less dependence on
consistent power supply are valuable for developing African nations.

Poultry equipment, feed additives, vaccines & pharmaceuticals have a

good potential for exports.

Imports

The threat of import of chicken legs from USA is looming large on Indian poultry
industry. USA is doggedly pursuing the export of chicken legs by using WTO.

The imports, if commenced, will disturb the Indian farming community to

a great extent.

It is unfair to say that farmers are suffering in USA. Only multinational

corporate companies operate in USA and there are no farmers.

In India, broiler rearing alone is a food giver for 100,000 families.

USA is trying to encase on the price gap between the breast meat and leg
meat in USA. They get paid four times higher price for 30% of the breast
meat and the legs are Offal for them.

They accumulate the small quantities of legs for years and want to dump
on India, which is basically unethical.

Policy makers of India should put all out efforts to stop this unreasonable
attempt by USA. They are working behind the shield of WTO playing
politics.

As of today, USA is reeling under out breaks of High Pathogenic Avian

Influenza. They are unlikely to come out of it with their massive units on
stamping out only. Our politicians and policy-makers should watch out
for the possibility of this dumping and prevent it

2.2 COMPANY PROFILE

Straight From Our Farms To Your Table
HISTORY
SRJ PROTIENS Limited based in Chennai ,tamilnadu. Here we are very proud of
our heritage. We remain an independent family business after (25) years. We are
the biggest employer in the mid Tamilnadu constituency and we produce the best
quality chicken anywhere to be found. Our customers and consumers alike are
very happy with our products and we love providing the nation with its most
popular
and
least
expensive
meat
protein
Our production starts with egg prodution, hatching chicks and then rearing the

chickens to very high welfare standards. During recent times we have examined
our strategic approach. First we decided to return to core business i.e. the
production of Fresh Indian Chicken. This proved a popular decision and we
immediately saw the benefits of our known competencies. We have restructured
our management team with the inclusion of senior outside managers to bring new
skills and valued experience as well as building overall a more capable
management team. We also pride ourselves on high levels of satisfaction.
SRJ employees are also very special many have worked for the company through
generations with long service records. We are as a business most grateful for their
loyalty and support and their willingness to go the extra mile when the company
needs them. The company has its own Hatchery, which supplies all farms
producing poultry for the company, these may be owned, rented or leased, but all
are registered under the appropriate scheme.
Quality Statement
SRJ Proteins Limited as a company is committed to providing the highest quality
products and service to all our customers. We consider that the quality of the
product supplied to our customers is of the utmost importance to the long term
success and growth of our company. Every care and attention possible is taken to
comply with all relevant Indian legal and safety requirements. We recognise that
we must work as a team with all our customers, to provide the highest quality
value for money products. To achieve this we have implemented a documented
food safety and quality management system, incorporating all relevant food
safety and qualitative standards, making sure that all employees of the company
are fully aware of the importance of the requirements within this document, to
achieve this companys and our customers goal of a consistent high quality
standard of products.
Company Profile
SRJ Proteins Limited Still a family run business , has always been a forward
thinking company and usually involved in cutting edge technology with regards
to processing. The company manages and operates a group of rearing farms
providing first class laying flocks that provide our own hatchery with first class
eggs for setting and hatching, ensuring the best quality control when placing
chicks in our broiler farms.
The company runs its own transport department covering live transport, chilled
and frozen distribution. Our distribution reaches every corner of the Chennai and
Andhra Pradesh, and we also operate with third party companies in a strong

export market.

2.1 Team flow