Bangladesh to tighten regulation on foreign poultry giants

By AZM Anas

- Last updated on GMT

Related tags: Investment

Bangladesh is concerned global poultry giants will outmuscle local chicken farmers
Bangladesh is concerned global poultry giants will outmuscle local chicken farmers
Bangladesh is mulling controls over foreign investors in the country’s growing poultry industry after local rivals said they fear being swallowed by overseas companies.

There was concern that Bangladesh poultry farmers could lose trade if competition went unchecked, Narayan Chandra Chanda, the country’s minister for fisheries and livestock, said. “We’re still observing … There should be a guideline,​” Chanda told GlobalMeatNews​. “We couldn’t assess yet whether foreign investments in the poultry sector will be helpful for us or hurt farmers,​” he added. An expert committee would be formed soon to examine the issue, Chanda said.

While only seven foreign poultry companies are operating in Bangladesh - five of them from India - industry insiders said that they control around 35% to 40% of the market. Major players also include Thailand’s Charoen Pokphand and China’s New Hope.

Overall investment in the sector has already exceeded $3bn (£2.7bn), and it is expected to double by 2030. This compares with just $191m (£144.4m) in the 1980s, according to the Bangladesh poultry industry’s coordination committee. Output has been growing 15% annually in recent years, the committee noted.

‘Ominous’ future

Moshiur Rahman, the committee’s convener, said the entry of overseas companies as “ominous​”, pointing out there was no guideline for foreign direct investment in the poultry sector. Foreign companies are not interested in joint-ventures with local entities, Rahman said, and domestic producers were able to meet local demand in any case.

For chickens, there is no need for foreign direct investment (FDI). They [foreign investors] should establish joint-ventures in something that the people of his country won’t be able to do. They’ll learn new things,​” Rahman told GlobalMeatNews.

Munzur Murshid Khan, secretary general of the Bangladesh Poultry Industries Association, agreed: “It’s OK if they [foreign companies] bring in cutting-edge technology and set up export-oriented poultry farms.​” But officials and experts have dismissed such views as overly restrictive.

Investment helps competition

A senior official at the state-run department of livestock services said Bangladesh needed more FDI in the poultry sector to plug the supply shortage.
 
Professor Nitish C Debnath, a Dhaka-based consultant for the UN Food and Agriculture Organisation, insisted both direct and indirect foreign investment helps local poultry groups improve quality, capacity and business skills, including through increased competition.

And some businesses agree with an open policy. Tariquzzaman, strategic planning and marketing director of Aftab Bahumukhi Farms, a pioneering integrated poultry producer, said FDI could help Bangladesh create a halal-based export segment: “Middle Eastern consumption is driven by halalisation. They don’t want to import from Brazil as poultry and swine are processed simultaneously there,​” he told GlobalMeatNews​. “They are looking at us.​”

Neither Charoen Pokphand nor India’s VH Group responded to queries on this topic.

Related topics: Retail, China, India, Others, Poultry

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