Charoen Pokphand cuts feedmeal output
Charoen Pokphand cuts feedmeal output
JAKARTA (JP): Publicly listed poultry feed meal producer PT
Charoen Pokphand Indonesia said on Wednesday that the country's
worst ever economic crisis has forced the company to reduce
production by 50 percent.
Company Director Djoko M. Basoeki said feed meal production is
currently around 1.2 million metric tons a year, down from last
year's production of 2.41 million tons.
"Lower demand and the soaring cost of raw materials have
forced us to cut our production by 50 percent," he said during a
hearing with the House of Representatives Commission III on
agriculture and food affairs.
He said the monetary turmoil, which has slashed the rupiah's
value by about 75 percent since July, 1997, has more than doubled
the price of feed meal as most of the raw materials are imported.
The demand has dropped sharply because many poultry farmers
can no longer afford to buy feed meal, he said.
According to the ministry of agriculture, the skyrocketing
prices of feed meal have forced at least 80 percent of the
country's 17,600 poultry farmers out of business.
Djoko said his company holds a 38 percent share of the
country's poultry feed meal market.
The company operates five plants in Jakarta, West Java, East
Java and Medan in North Sumatra.
Djoko said the company's poultry breeder subsidiary PT Charoen
Pokphand Jaya Farm (CPJF), has also reduced its production by 50
percent because of the lower demand.
He said that CPJF produced only 125 million day-old chicks
(DOC) in 1998, halving its normal annual production capacity of
250 million DOC.
Charoen Pokphand currently holds an 80 percent stake in CPJF.
To compensate the lower domestic demand, Djoko said, CPJF
exported its DOC to Singapore and Malaysia in 1998, with the help
of the marketing network of the Charoen Pokphand Group of
Thailand.
Djoko said the company also opened a chicken slaughtering and
processing plant in Serang, West Java in early 1998, in a bid to
diversify its business.
The slaughter house, which has a production capacity of 4,000
frozen chickens per hour, exports its products to the Middle
East, Japan and Singapore, generating US$3.4 million in 1998.
(gis)