Cargill to focus on strong poultry market in the Philippines

Strong growth in the home market for poultry products continues to offer attractive investment opportunities for Cargill Philippines Inc.

Kalinovskiy, Bigstock
Kalinovskiy, Bigstock

A large and attractive domestic market for poultry meat is the reason for the business focus of Cargill Philippines Inc. looks set to remain on the south-east Asian country.

The Philippines market offers better growth prospects, the firm’s president, Philip G. Soliven, told Business Mirror at a recent press briefing in Makati City. Soliven said the company is considering a number of investment opportunities in the Philippines, with a primary aim to increase poultry production for the domestic market.

With a final decision likely to be announced later this year, the regions of Visayas or Mindanao look to be the most likely location of such investment.

Cargill Philippines Inc. has achieved an average growth rate of 11 percent over the last decade, according to Soliven, with consolidated sales reaching 27 billion pesos (PHP; US$529 million at current exchange rates) in the last fiscal year ended May 2017.

At the end of last year, Cargill Joy Poultry Meats Production Inc. — a joint venture between Cargill and Jollibee Foods Corporation — inaugurated a new poultry processing plant in Batangas, and Cargill opened an animal feed premix plant in Bulacan.

Data supports confidence

Cargill’s confidence in the country's poultry sector is supported by the latest agricultural data published by the Philippines Statistics Authority (PSA) for the last quarter of 2017 and the full year.

While the country’s total livestock sector expanded by an average of 2.7 percent in 2017, chicken meat production rose by 4.2 percent to almost 1.746 million metric tons.

Chicken egg production increased by more than 6.6 percent to 492,410 metric tons (mt), while output of duck eggs was 45,430mt—almost 2.9 percent more than in 2016.

Duck meat was the only subsector of the Filipino poultry industry to experience a reduction in output in 2017. It was down nearly 3.5 percent from 2016 at 31,090mt.

Farmgate prices for poultry producers increased by an average of 1.2 percent in 2017 compared to the previous year, according to the PSA. Chicken prices were up only marginally (0.27 percent), but rises of 3.2 and 3.8 percent were achieved by producers of chicken eggs and duck eggs, respectively, and duck meat prices were almost 10.2 percent higher.

As demand for protein continues in the Philippines, growth in the poultry sector is forecast to continue in the coming years.

“This will be a continuing trend,” said Roehlano M. Briones, senior research fellow at Philippine Institute for Development Studies.

He told Business Mirror that while meat consumption generally has been growing in the Philippines in recent years, consumers have increasingly been favoring chicken.

The PSA data indicate that consumer confidence was only temporarily shaken by avian influenza outbreaks in the Philippines last year. According to official reports to the World Organisation for Animal Health (OIE), there were 12 outbreaks of highly pathogenic avian influenza between July and November of 2017, which led to the loss of more than 1.52 million birds.

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