Market Research Report :Animal feed market india 2012

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Animal Feed Market – India
November 2012

Executive Summary

 The global animal feed industry showed a tremendous growth in terms of production during
Market 20__, which was reported to be x mn tonnes
 In India, the total feed production during 20__ was found to be around y mn tonnes

Drivers Challenges

LE
—Growth in Livestock Population —Rise in Ingredient Price
—Increasing Consumption of Animal Based Food —High Pricing

P
Drivers & Products —Lower Impact on Native
Challenges —Untapped Market Potential Breeds

SAM —Growth of User Industries
—Growing Population
—Increase in Disposable Income

 Exhibitions and Events
—Unpredictable Climatic
Conditions

 Usage of IT (information Technology)
 Feed Production from Unusual Sources
Trends  Bypass Protein
 Strategic Activities
 Replacement of Molasses

Major Players
Competition Company A Company B. Company C
Company D Company E Company F

ANIMAL FEED MARKET IN INDIA 2012.PPT 2

•Introduction
•Market Overview
 Global

LE
MP
 India
•Import & Export

S A
•Drivers & Challenges
•Government Initiatives
•Trends
•Competition
•Strategic Recommendations
•Appendix


Just like human beings, animals also require a nutritionally
adequate feed for their proper and healthy growth
Introduction

In general, feed refers to the food that are fed to the farm animals, but, in technical terms compound animal

feed is defined as a highly nutritious food component which is specially prepared for animals and can be fed

E
to them as the sole source of ration for their proper growth and development in order to enhance their

L productivity

MP Factors determining the composition of animal feed

S A Price of the raw materials

As the components used in
preparing animal feed are Nutritional value of the components
mainly agro‐based, so, its
Factors
composition is highly
influenced by a country’s Nutritional requirements of the specific animal
agricultural output

Rules and regulations of the government


The changing food consumption pattern worldwide, is
surely going to…
Global Market – Overview (1/2)

• Animal feed is an essential component in the overall food During 20__, the global animal feed
production process, especially the livestock based food products production was found to be around x mn
industry tonnes, showing a growth of z% from the
• Generally, its production takes place in industrial feed mills or in simple previous year
on‐farm mixers
• The global animal feed market is witnessing surging demand
Year Production (mn tonnes)
owing to the growth in consumption of animal based food
products 20__ y
• It has been estimated that the consumption of meat and milk will
rise at the rate of A% and B% per annum globally

LE 20__ X

MP
A
B
C
D
E
F
A5%
A4% A6%
A1%
S A • In terms of overall feed
production, A holds the top
position followed by B,C,D, E and F
• In 20__, India ranked as the pth
A3%
nation among the top ten feed
producing nations of the world
A2%


…boost the global feed industry in the upcoming years

Global Market – Overview (2/2)

B4% Poultry
B5% Ruminant
• Worldwide, poultry feed accounts for
B3% Pig
the biggest share in the overall feed B1%
consumption followed by ruminant, Aqua
pig, aqua and other species Other Feeds

LE B2%

MPRegion Wise Breakup of Different Types of Feed Production (20__)

P5%
Poultry

P6%
S A Ruminant

Q5%
Pig

R6%
Aqua

S6%
Other Feeds*

T5% T3%
P1% Q4% Q6% R5% S4% S5% T6% T4%
Q1% R4% S3%
R3% R1%
P4% S2% T2%
Q3%

P3% P2% T1%
R2% S1%
Q2%

Asia Europe North America Middle East Latin America Others
*Note:Other feeds include horse feed and pet food


Although the industry is at its nascent phase but, it will
witness…
Indian Market – Overview (1/2)

• The first commercial production of animal feed in India started in the year 19__ after the establishment of
medium‐sized feed plants in northern and western India
• During 20__, the production was around z mn tonnes which is expected to reach v mn tonnes by 20__,
growing at a CAGR of p%
• Although, the industry is highly unorganized in nature, it is gradually converting itself into a more

organized and well planned sector

Animal Feed – Production Volume
P LE
Production – Segmental Shares (2012e)

mn tonnes
30 P%

d e
f
S AM g
X3%
X4%
Poultry Feed
Cattle Feed
Aqua Feed
b c X2%
20 a Others
X1%
10

0
20__ 20__ 20__ 20__ 20__ 20__ 20__
*Note: ‘Other’ includes feeds of other animals such as swine, sheep, goat, camel, dog etc


…robust growth in the coming years

Indian Market – Overview (2/2)
LE
MP
A
India has a rich wealth
Livestock sector accounts

S
livestock population which
for y% of the total farm In the production of any
accounts for 10.71 per cent
accounts for x per cent of
output in India, which food product of animal
world's livestock resources
of world's livestock
clearly implies that there origin, feed accounts for
which includes a per cent
resources which includes
will be rise in demand for around z% of the total
16 per cent share in cattle
share in cattle and b per
animal feed in the near production cost
cent share in global buffalo
and 55 per cent share in
future
global buffalo population
population

X%
Z1%
Y%

Y1%
x1% Z%

India World Livestock Sector Other Farm Outputs Feed Cost Other Costs


Animal Feed Market Segmentation

The Indian animal feed industry is primarily classified into three major categories
and all the remaining types of animal feeds are considered under the group ‘other’

Animal Feed

Poultry Cattle Aqua Other*

In terms of volume wise

LE C%
D% Poultry Feed

P
consumption, poultry feed Cattle Feed
accounts for the largest Aqua Feed
share of around a%,
followed by cattle feed
(b%) and aqua feed (c%)

S AM B%
A% Others

*Note: ‘Other’ includes feeds of other animals such as swine, sheep, goat, camel, dogs etc


Import of Major Types of Animal Feed (1/3)

LE
P
Compounded Animal Feed Major Importing Nations (2011*)

M
Volume Value A
INR mn ‘000 Kg

A
B
13.5%

S
2,500 a2 15,000 C
a4
4.4%
2,000 a3 2.1% D
a1 10,000 8.2% 50.3%
1,500 E
1,000 b2 b3 F
b1 b4 5,000 21.5%
500
0 0
20__ 20__ 20__ 20__
Concentrated Compound Animal Feed Major Importing Nations (2011*)
Volume Value P
INR mn ‘000 Kg Q
1,500 8,000 16.3% R
c3 33.0%
c2 S
6,000
1,000 c1 c4 15.9% T
4,000
d3 U
500 d2 10.5% 13.1%
d1 2,000
d4 11.2%
0 0
20__ 20__ 20__ 20__

Note: HS Code 23099010 (Compounded animal feed), HS Code 23099020 (Concentrated compound animal feed), (2011*) implies figures between Apr‐Dec 2011


Drivers & Challenges – Summary

LE
MP
Drivers

Growth in Livestock Population S A Challenges

Rise in Ingredient Price
Increasing Consumption of Animal
Based Food Products High Pricing

Untapped Market Potential
Lower Impact on Native Breeds

Growth of User Industries Unpredictable Climatic Conditions

Growing Population

Increase in Disposable Income


Key Trends ‐ Summary

LE
MP Exhibitions and

SA
Events

Replacement of Usage of Information
Molasses Technology (IT)

Trends

Feed Production from
Strategic Activities
Unusual Sources

Bypass Protein


Public: Domestic Company – Company A (1/4)
Company Information

LE
Offices and Centres – India

Corporate Address
Company A, Street A
City B

MP
A
State C
Tel No.
Fax No.
Website
Year of Incorporation
91 124 7239
91 124 4734111
www.company.co.in
1767
S
Ticker Symbol 123456
Stock Exchange ABC
City B
Products and Services Head Office

Category Products/Services
Key People
Prawn Feed Profeed, Titan, Manamei, Champ
Name Designation
Scampi Feed Classic, Scampro
Person A MD, CEO
Person B. Director
Fish Feed Mermaid
Person C Director
Person D Director


Financial Snapshot

LE Key Ratios

INR mn

MP Total Income
Net Profit / Loss
INR mn
Particulars

Profitability Ratios
y‐o‐y change
(2011‐10)
2011 2010 2009 2008

A y1 Operating Margin

S
3,000 y4 y3 y2 50 Net Margin
2,000 0 Profit Before Tax Margin
Return on Equity
1,000 x1 ‐50
x4 x2 Return on Capital Employed
x3
0 ‐100 Return on Working Capital
20__ 20__ 20__ 20__ Return on Assets
Financial Summary Return on Fixed Assets
Cost Ratios
• The company earned a net profit of INR y1 mn in FY 20__, as Operating costs (% of Sales)
compared to net loss of INR y2 mn in FY 20__ Administration costs (% of
• The company reported total income of INR x1 mn in FY 20__, Sales)
registering an increase of z per cent over FY 20__ Interest costs (% of Sales)
Liquidity Ratios
• The company earned an operating margin of z1 per cent in FY 20__,
Current Ratio
an increase of a1 percentage points over FY 20__
Cash Ratio
• The company reported debt to equity ratio of z2 in FY 2011, an Leverage Ratios
increase of a2 per cent over FY 20__ Debt to Equity Ratio
Debt to Capital Ratio
Key Financial Performance Indicators
Interest Coverage Ratio
Indicators Value (dd/mm/yyyy) Efficiency Ratios
Market Capitalization (INR mn) p Fixed Asset Turnover
Asset Turnover
Total Enterprise Value (INR mn) q
Current Asset Turnover
EPS (INR) r Working Capital Turnover
PE Ratio (Absolute) s Capital Employed Turnover
Improved Decline


Key Business Segments

LE
Key Geographic Segments

A B C

MP P Q R

SA
100% C1% C2% C3% C4% 100% R2% R4%
R1% R3%
B1% B2% B3% B4% Q4%
Q1% Q2% Q3%
50% 50%
A1% A2% A3% A4% P1% P2% P3% P4%
0% 0%
20__ 20__ 20__ 20__ 20__ 20__ 20__ 20__

Business Highlights (1/2)
Description News
• Company A is primarily engaged in manufacturing business of prawn and fish feeds and supplies its
products to the farmers of aqua culture
• The company is also involved in shrimp processing and has its presence in the shrimp ready‐to‐eat and
Overview ready‐to‐cook segment under the brand name ‘Prawn King’
• In addition to this, the company has 4 windmills with a capacity of 3.2 MW at Chitradurga, Karnataka for
generating and selling electricity

• The company has three prawn and a fish feed manufacturing units at Kovvur, Vemuluru in Andhra
Pradesh and Pardi in Gujarat
Manufacturing Units • The plants have a production capacity of capacity of 90,000 MT per annum
• The shrimp processing and exports unit is situated at Gopalapuram in Andhra Pradesh


Business Highlights (2/2)
LE
Description

MP News

SA
• The processing plants are well equipped with plate freezers, blast freezer, IQF (Individual Quick
Production Facilities Freezing), state‐of‐art cold storage facility, flake ice manufacturing facility and block ice manufacturing
facility
• The prawn and fish feed manufacturing units are ISO 9001:2008 certified and the shrimp processing
and exports unit is ISO 22000: 2005 certified
• The processing plants are in accordance with the HACCP, USFDA, EU & BRC Global standards
Quality Standards • In addition to this, the plants are ACC Certified for following best aquaculture practices in their
manufacturing processes.
• The company also has in‐house laboratory for conducting special tests for detecting the presence of
micro organisms and anti‐biotics in the final products to ensure that it is absolutely contamination free
• In the shrimp feed segment, the company witnessed an increase in sales by 125% and the processing
Company Performance and export division sales grew by 58.4%
• During the 1st quarter of 2012‐13, the overall growth rate of the company was around 20%
• The company exports its processed shrimps to shrimps to the United States, Europe, Japan, Australia,
Export and the Middle East
• During 2010‐11, the company went for capacity expansion of its shrimp feed manufacturing units
Expansions  Old machineries were replaced with new higher capacity machines and new godowns were set up for enhancing storage
capacity
 Production capacities of the plant increased to 1,10,000 MT per annum from 52,000 MT per annum
• In 2011‐12, the company plans to expand its feed manufacturing facility of its existing Kovvur plant
Future Plans
• For this, the company had already purchased a land of 4.94 acres


Appendix

Ratio Calculations Ratio Calculations
(Operating Current Assets / Current
Operating Margin Current Ratio
Income/Revenues)*100 Liabilities

Net Margin (Net Profit / Revenues) *100 {(Cash & Bank Balance +
Cash Ratio Marketable Securities) / Current
(Income Before Tax / Revenues Liabilities)}
Profit Before Tax Margin
*100
Total Liabilities / Shareholders
Debt to Equity
(Net Income / Shareholders Equity
Return on Equity (ROE)
Equity)*100
{Total Debt / (Shareholders
Debt to Capital Ratio
EBIT / (Total Assets – Current Equity + Total Debt)}
Return on Capital (ROCE)
Liabilities)*100
Interest Coverage Ratio EBIT / Interest Expense
(Net Income / Working Capital)
Return on Working Capital
*100
Fixed Asset Turnover Sales / Fixed Assets
Return on Assets (Net Income / Total Assets)*100
Asset Turnover Sales / Total Assets
Return on Fixed Assets (Net Income / Fixed Assets) *100

(Operating Expenses / Sales) Current Asset Turnover Sales / Current Assets
Operating Costs (% of Sales)
*100

Administration Costs (% of (Administrative Expenses / Sales) Working Capital Turnover Sales / Working Capital
Sales) *100
Capital Employed Turnover Sales / Shareholders Equity
Interest Costs (% of Sales) (Interest Expenses / Sales) *100


Sources of Information

Secondary Research Primary Research
Print Medium Interviews
Leading Newspapers Leading Industry Vendors
Journals / Magazines Industry Stakeholders
Business Magazines Industry Experts
Electronic Medium Surveys Conducted in Social / Technology Focused
Forums
Company Websites
Government Websites / Resources
Online Magazines
Online Journals / Articles
Premium Databases
Social Networking Space


Thank you for the attention
Animal Feed Market – India report is part of Netscribes’ Food and Beverage Series.
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Market Research Report :Animal feed market india 2012

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