Overcoming India's challenges in the poultry industry
Welcome, everyone. This is AGcelerate. My name is Nikolai Shchetikhin and I have Jim Johnson with me. And today we have guests, we have Mark Scott with us. How are you doing? Gents
[00:00:19] good, good.
[00:00:25] Hey, Mark, great to have you with us today. And as a guy who’s been around the industry for quite a number of years, you’re somebody we’re really excited to talk to today and around your 19 years in Aviagen all over the world, which is cool. And I guess it’s your seventh year now in India as a business manager. So welcome to the show. Great to speak to you.
[00:00:49] Yeah, thank you very much.
[00:00:51] It’s really good to have you Mark. And like Jim said, you’ve been with the industry for quite a long time. So maybe as an introduction, you could tell us a little bit more about how you started with poultry and why?
[00:01:06] Well, I actually started out with gamebirds. Back in the UK. I studied in gameboard management, and started off pheasants, ducks and Partridge. And I think, after a couple of years, in that I felt a natural progression into the commercial poultry industry that I was brought up an area which had a lot of poultry farms around. And then, you know, I’ve got an opportunity to work with on a Aviagen contract, GP farm, and things just went from there. I mean, from day one, I was just fascinated. And I knew that this was industry that I wanted to spend the rest of my working life. And so this went from there. I had to go back and do some more studies to progress further. But yeah, 19 years in the industry. And I hope I’m here for a long time to come.
[00:02:03] Great stuff. So you caught that chicken bug, like a lot of us have done Mark and tell me I’m really interested in India. And you know, it’s an exciting market. There’s a significant poultry industry already there. I’d love to hear from you in terms of What’s your take on India as a poultry market and an any differences you would like to highlight between there and the rest of the world?
[00:02:30] Well, as you say, Jim has seven years in India, this is actually my second stint. So initially three and then half came back. And this is my fourth year. I’ve seen some huge differences while I was away, that was from 2013 to 2017. I think the differences are still there for everybody to see. I mean, the live markets here, it’s still 95% live market. And that’s slowly slowly reducing into processing. But it’s, you know, even five, six years ago, you probably feel talking about 95 96%. I think the differences as well is there’s a lot of small independent farmers here, independent companies, and still a lot of hatching egg and Bill chick sales. So there’s big differences in that way, the planning here they plan for tomorrow. You know, you asked the guys about five year plans. The market volatility here is I’ve never seen anything like it keeps you on your toes. You can be rich one day and poor the next that’s on the market goes here is definitely a different market. Is it progressing like other developed markets? Yes, but very slow. We talk about the process. And I think because the live markets are so strong, and when the prices are very high in the live markets, and then everybody who does process skills down so they can save lives live market prices. And that’s where I see you know, meat consumption.
[00:04:48] Yeah. So consumption I mean goes up here by religious festivals, rituals, and that determines, you know, market prices, so That’s how it goes here. The other difference here in India that I see is there’s very little imports of poultry very well at all. I mean, the government has 100 percent tax tariffs on poultry products coming in. So that’s not to say that things will change. Of course, they will, and we know that the US and Brazil are definitely sniffing around and I’m sure when things settle down in China, that India will be back on their hit list to import some products.
[00:05:36] That’s a very interesting market, and very, very different from anything else in the world. And India is as a country is also very, very different because of the culture because of the religion because of the geographics, multiple languages and, and all that I’ve been to India a couple of times, but it still stays a mystery to me. So, but you’ve been there for quite a long time. So maybe you can tell us a little bit more about what kind of challenges the industry is having with all this cultural and regional mix and everything else?
[00:06:14] Yeah, I mean, apart from what you’ve mentioned, Nik, I mean, the, you know, the cultural differences is a challenge in itself. I think that the industry here is very fragmented parts, different parts, and different sections do tend to work against each other. And the industry really needs to come together as a whole, and I’m sure things will, will improve from there, and there’ll be less challenges. And as I said, before, the volatile markets here is such a challenge. You know, it’s sometimes you can, it’s very hard to predict, even though they do based on as I say cultural festivals, religious festivals, but still, you know, as we’ve seen in the past, with a very volatile market, I think one or the other main challenges we’ve got here is the environment, and actually how to farm chicken in this environment. And it’s, you know, you can be in North India, and it can be minus 10 degrees, but through the day, it’s going to be 20 degrees. You know, so how to how to manage chicken in that environment, then you’ve got, obviously in the summer to extreme, coastal, it’s very humid. So I would say the challenges of managing birds and this environment is that one of the main challenges, a lot of environmentally controlled housing is coming on board now. But again, it takes some investment. And it’s, it’s slow coming on, but is increasing. And then I’ll say the disease challenges here in India. That’s a huge challenge as well. There’s a lot of diseases around actually, the control, and the the vaccinations of these diseases, as well as is challenging. very restrictive on vaccines. Vaccines available here in India, is quite limited. And, you know, some of these vaccines are, you know, smuggled into the country as well. And some markets don’t do what they’re supposed to be doing. So disease challenges is definitely a big challenge here as well.
[00:08:36] Oh, sounds like there’s a lot going on now. And there’s a lot of work to do in that area. And in industry, it seems really quite fun. And with all these things going on, and obviously, it’s not to be an immune to the pandemic either. So I guess from us in many other countries that’s caused quite a disruption to the poultry industry how is the impact of the pandemic in India.
[00:09:02] I think Jim, if I go back to march 2020. So sorry, I’ll go back before that there was an initial scare mongering here over social media, which linked poultry meat chicken meat to contracting COVID-19. Now that overnight, are the huge negative impacts on the market here. Prices are chicken just went to rock bottom which caused huge disruption and the industry lost billions alone. Because of this. Farmers were, you know, given chicken away, there was disposal of a lot of chicken going on. So that was the initial COVID impact. And then we had the lockdowns that followed in March. For the first week to 10 days. Again. What was said? Top Level wasn’t really got down to the ground level. So feed trucks were not getting through chick trucks carrying chickens, the markets weren’t getting through, some live markets were closed, some are open, there was just so much confusion. And then mainly around the logistics. And I think the other main major impact was a lot of the the industry here relies on migrant workers from different parts of India. Now, often these migrant workers, you know, when, when an emergency arises, you want to go home. So this is on farms, hatcheries, feed Mills, you name it, I mean, one day they just left. So to operate your your operation after this was very difficult for these guys. And it’s slowly slowly recovering. And it has recovered now. But the impact that the COVID was probably felt worse here than anywhere else in the world I feel.
[00:11:13] Yeah, it’s a completely different ballgame. In India with what happened with COVID. It’s not the issue of switching from retail or to retail from food service. It’s just the whole different thing that happened with India.
[00:12:00] So I just wanted to talk to you about a little bit about the technology, I know that India is developing very, very fast, and lots of education is happening. And a lot of doctors and engineers and IT people are coming out of India, and I have quite a lot of Indian friends. And most of them are it, you know, so it looks like technology is developing pretty good. But how does that relate to the chicken industry? Is there any adoption of the technologies because like you said, there would be some harsh environments, especially in the north India, where the temperature will be dropping rapidly between day and night. And you know, and again, the there is a trend of getting bigger, bigger companies, so they would need to communicate somehow their results and everything. So, this is where technology would help. So are farmers and companies adopting technology?
[00:17:57] Well, I think the technologies and the automation here in India, it’s been a bit slow. But I think after the initial COVID time last year, I think it’s made a lot more of the industry think about it, you know, quite clearly there was there was no remote monitoring. So it was very difficult to know what was happening on farms. From the integrators people couldn’t get out to the farms. So there’s nowhere and hatcheries and females, so there was no way of seeing what was actually going on. And then unfortunately, there was a lot of poor things went on and a lot of missing misdemeanors happened at that time. So now, definitely, I think a lot more than industry are looking at looking at how to combat this. And especially again, with automation. It’s a bit slow here with automation. But again, the problem with the labor disappearing from the production facilities, it’s made a lot of people look at some more automation to try and reduce the risks and the reliance on labor here.
[00:19:17] Okay. Well, hey, Mike, that’s really interesting, I guess, you know, just in summary, we’ve had a really interesting chat this afternoon, looking at your thoughts and your take on the Indian market and the opportunity for poultry in that market.
[00:19:37] you know, interesting to hear some of the challenges that the industry is going through, which sounds like you know, a lot of fun to me, actually, you know, with Africa being in a similar situation and my experience where you’ve got diverse climates to manage you’ve, you know, cold and hot temperatures, day and night, differences in temperatures, humidity and power. In some parts of the country, I mean, all that is very challenging from a poultry point of view. And it turns gray an exciting opportunity. There’ll be technical challenges here to get customers to grow, and modify the way they grow their chickens in different parts of the world of India. The impact of COVID has been fell all over the world, but it seems like it’s been particularly hard in India, with the situation described. And the impact on the industry was fairly severe, I guess. So hopefully, you know, there’s, it’s in recovery from that. And I also see there may well bring an opportunity and technology. And your last answer is really gave me a lot of encouragement about how we potentially can, you know, capture an opportunity in India, on the technology side of things to be able to make information and data more visible to help companies and farmers do their job in a much better way. But it’s been fun talking to you. Today, Mark, and we really thank you for your time and been interesting learning a little bit more about the Indian market.
[00:21:07] Thank you very much. And it’s been it’s great to be on the podcast.
[00:21:12] Yeah. Thanks, Mark. And, you know, I hope we’ll see you in the next episodes too. Maybe from a different country or from a different continent? Who knows. And for those who just joined this podcast who saw this episode, not to miss new episodes, please follow us on social media. We on LinkedIn on Instagram and on Twitter, and we’ll see you in the next episode.
[00:21:38] Excellent. Thanks, Nik. Thanks, Mark.