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VIV ASIA 2017DIGITALWorld Expo for Animal Husbandry & Processing

March 11-13 2015 Bangkok, Thailand

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Welcometo VIV ASIA 2017 Digital

EditorialAlice MitchellLucy TowersSteve McOristAmrita Ghaswalla

SalesNic Catterall

DesignNick Morton

This edition will focus on Asia’s pig, poultry, dairy and aquacul-ture industries as well as the VIV Asia 2017 show being held in Bangkok, Thailand, 15-17 March 2017.

VIV Asia brings together Asia’s different farming sectors all un-der one roof for Southeast Asia’s biggest international platform for the animal protein production and processing industries.

With over 1000 exhibitors, a large conference and seminar pro-gramme and special dairy and aquaculture sessions, this bien-nial show continues to grow.

Exploring current trends in Asia’s pig industry, veterinarian Dr Steven McOrist explains some of the major trends in the region, both in moving to mass production and ensuring animal and human health standards are maintained at scale.

Looking at production techniques in the poultry industry, The Poultry Site spoke to Dennis Villaseñor Umali DVM PhD, cur-rently working at the Department of Veterinary Clinical Scienc-es, College of Veterinary Medicine, University of the Philippines Los Baños, to learn more about his innovative system designed to improve flock health by way of military discipline.

Also in this issue, the International Union for Conservation of Nature (IUCN) provides an insight into how a sustainable inte-grated approach to mangrove and shrimp farming is helping Vi-etnamese shrimp farmers generate a higher return whilst also protecting the environment. In our final article, find out more about the Indian dairy industry and its prospects for the future.

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CommunicationsOur uniOur unique promotional opportunities allow communication with poultry producers, veterinarians, industry professionals, farmers and students.

OnlineOur in-depth news and information attracts over 3 million unique users per annum across our global online portfolio.

39%

31%

85%

88%30%Americas

EMEA Asia

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unique visitors across our poultry

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What’s InsideWhat’s going on at VIV Asia 2017and beyond

Welcome to VIV Asia 2017Welcome to VIV Asia 2017, the biennial trade show and conference, which is being held at the Bangkok Interna-tional Trade & Exhibition Center (BITEC) in Thailand from 15-17 March 2017.

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East Asia’s pig industry steps up to the challenge of surging demographicsIn China and across East Asia and beyond, dramatic population growth is driving unprecedented demand for pig products. But from the Philippines to Cambodia the boom is forcing rapid change on the Asia-Pacific industry. Dr Steven McOrist, a Hong Kong-based consultant pig veterinarian, reports on the major trends in the region, both in moving to mass production and ensuring animal and human health standards are maintained at scale.

“Like a War Zone 24/7”The Poultry Site meets Dennis Villaseñor Umali DVM PhD, currently working at the Department of Veterinary Clinical Sciences, College of Veterinary Medicine, University of the Philippines Los Baños, and hears about the 31-year-old’s innovative system designed to improve flock health by way of military discipline.

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How India became the world’s most dynamic dairy marketSince the Indian government began ‘Operation Flood’ in 1970, the country has undergone a dramatic dairy revolution to become the world’s biggest milk producer. Forty-seven years on, the sector is showing no signs of slowing, in a nation where cattle are more sacred than ever.

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Shrimping horizonsHow shrimp farmers are saving thousands of miles of mangrove in Vietnam.

26Industry newsThe latest news from across the globe.

304 VIV Asia Digital March 2017

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Welcome to VIV Asia 2017


Welcome toVIV Asia 2017Welcome to VIV Asia 2017, the biennial trade show and conference, which is being held at the Bangkok International Trade & Exhibition Center (BITEC) in Thailand from 15-17 March 2017.

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As Southeast Asia’s biggest international platform for the animal protein production and processing industries, VIV Asia is one of the most important shows for indus-try professionals. The conference combines Asia’s pig, poultry, dairy and aquaculture industries as well featur-ing special crop and bioenergy sections.

There is something for everyone at VIV Asia. It is one of the best places to reveal world class innovations and to discuss the industry’s growing role in food security, as well as to meet with new and existing customers.

Exhibitors are expected from a range of sectors includ-ing feed, animal breeding, equipment, slaughter and pro-cessing, animal health, trade and production suppliers, just to name a few.

This year’s show is expected to be bigger and better than ever with a record 1000 exhibitors expected, 14 per cent more than in 2015.

The huge growth in exhibitors has also meant a change in layout of the show, which event organisers hope will be more visitor-friendly. Exhibitor stands were previously grouped in terms of animal and located in separate halls. But, this year, all stands will be housed in one large hall and then grouped according to category, making stands more visible and easier to navigate.

A large boulevard path will run down the centre of the hall and two squares at the end will be home to digital screens and stages for exhibitor events.

There will also be further big screens located throughout the exhibitor hall providing helpful information, news and special feature alerts, advertisements and video clips.

The number of visitors at this year’s show is also expect-ed to grow. The previous VIV Asia attracted 38,422 visi-tors from 124 countries, 57 per cent of these being from outside of Thailand. VIV Asia Show Manager, Zhenja An-tochin, said VIV has now set a target of receiving 40,000 visitors over the three days.

Special Segments

Special segments returning this year include DairyTech

and an Aquatic special which will have their own distinct seminars and ‘expo pavilions’ - specialised areas for showcasing products.

DairyTech

A DairyTech pavilion will house many companies dis-playing dairy equipment and special seminars for the dairy sector will be held on 15 March to present the lat-est ideas and products for producing milk profitably.

Taking visitors through exhibits at the show relating to the complete dairy chain from grass to glass will be a ‘Dairy Walk’. There will also be an optional visit to the Chokchai dairy farm to demonstrate best practices in milk production. VIV Asia is also cooperating with Dairy Global to hold a DairyTech Conference on 14 March at the Novotel Hotel, Sukhumvit 20.

Welcome to VIV Asia 2017


This invitation-only side conference brings together Southeast Asia’s dairy industry to discuss best practic-es for profitable dairy production with topics including genetics and breeding, biosecurity, farm management, diet optimisation and sustainability.

Aquatic

On the aquatic side, VIV Asia is working with Progressus and International Aquafeed Magazine to offer a collab-orative pre-show conference on Biosecurity, Feed and Recirculation Aquaculture. The conference will be held at the Novotel hotel on Tuesday 14 March, 9am-5pm.

During the conference there will be seminars and, in the Aquatic pavilion, Hall 103, an international line-up of companies will be promoting the latest feed and health supplies for fish and shrimp.

“Aquatic features a three-part menu of strong attrac-tions for visitors with a business interest in aquaculture,” says Roel Schoenmaker, who is co-ordinating the Aquat-ic activities on behalf of VIV worldwide.

“As well as a pre-show conference and several show-time seminars, Aquatic features its own pavilion of exhibitors.

“The Aquatic Pavilion is going to be fully integrated as a central feature in the main hall of the show. It will be lo-cated within the section highlighting animal health and feed ingredients and additives. The location also puts the pavilion close to other exhibiting companies that have feed and health products for aquaculture as part of their wider product range.”

e-Novations Award

New for this year, VIV Asia has intro-duced the e-Novations Gallery and Awards. This video contest showcas-es innovative products and services at the show and they can also be viewed before VIV Asia on the new-ly-relaunched VIV Asia website and social media channels.

The entries will be presented via short video clips, introducing the new product or service that will be launched for the first time in Asia.

Visitors will have chance to vote for their favourite inno-vation, either online or while at the show, in each of the main show categories of farm production, breeding and hatching, processing and handling, nutrition products, feed manufacturing and animal health.

The winning entry per category is to receive a special e-Novation Award in a ceremony on the second day of the show.

With Asia’s fast growing production and consumption of agricultural produce, VIV Asia 2017 looks set to lead the way for showcasing new products and practices in Asia’s agricultural sectors.

“This year’s show is expected to be bigger and better than ever with a record 1000 exhibitors expected, 14 per cent more than in 2015”

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“Like a war zone 24/7” 2016 winner of the WPVA-Zoetis young poultry veterinarian award describes poultry farming in the PhilippinesThe Poultry Site meets Dennis Villaseñor Umali DVM PhD, currently working at the Department of Veterinary Clinical Sciences, College of Veterinary Medicine, University of the Philippines Los Baños, and hears about the 31-year-old’s innovative system designed to improve flock health by way of military discipline.

What originally attracted you to the veterinary profes-sion?

We used to have a swine farm and that was a major factor that influenced me to go into veterinary practice. Being exposed to the profession early and having tried the different veterinary procedures at a young age, I told myself that one day I will also become a vet.

My interest in poultry started when I was nine years old. As a kid, I used to raise ducks and chickens as a hob-by during summer breaks when there were no classes. When classes restarted, I would sell my birds to my fa-ther for a small fee. I then used the money I earned to

buy toys and other pets such as tropical fishes, pigeons, spiders and rodents. Our house was a mini-zoo during those times.

You spent five years in Japan after finishing your uni-versity studies. What were your most important learn-ings from this time?

From 2009 to 2014, I was in Japan taking my PhD in Vet-erinary Science at the United Graduate School of Veter-inary Science, Yamaguchi University. My specialisation was in Molecular Epidemiology of Poultry Diseases. At the same time, I was based in PPQC Co Ltd, a private Japanese poultry diagnostic, consultancy and research

“Like a war zone 24/7”


company. The company covers the operations of around 15 million layers and 25 million day-old chicks per year.

Under the intensive guidance of my mentors, I learned the Japanese techniques of flock health monitoring, disease diagnostics, epidemiological surveillance, flock management, processing and quality control of poultry products, marketing and poultry economics.

More than the techniques, the most important lessons I learned during my stay in Japan were their astonish-ing work ethic, their responsible farming philosophies, strict adherence to quality standards and their amazing culture and social norms. Their attention to detail, com-

mitment to work and selfless concern for other people were phenomenal. More than the technical side of being a veterinarian, my stay in Japan completely influenced my perspectives in life and changed me as a person in a positive way.

You’re currently working on an Integrated Health Management System for poultry farmers in the trop-ics. What have been your priorities in developing this project?

Utilising the rich experiences and diverse skills I learned from my Japanese mentors, I am currently developing an integrated poultry health-management system to im-prove the health and production performances of poul-try farms in the tropics, especially in the Philippines.

The unfavourable business climate, challenging weather patterns, frequent natural disasters, hot and humid trop-ical climate, presence of numerous diseases in the field, poor quality inputs, lack of infrastructures, operational inefficiencies and frequent market distortions due to dumping of cheap poultry products from highly efficient countries are just some of the major issues affecting the poultry industry in this region of the world.

Poultry farming here is like a war zone 24/7. A tiny mis-take in operation will be economically painful and may result in farm closures, especially among the inefficient farms.

Having a proactive flock-management tool that sys-tematically assesses, through time, all the major com-ponents of the production chain as well as environmen-tal and human factors affecting the system, will allow the early detection and prevention of production- and

“Poultry farming here is like a war zone 24/7. A tiny mistake in operation will be economically painful and may result in farm closures, especially among the inefficient farms”

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“More than a regular disease outbreak that may result in mortalities of up to 30 percent in a week, a single defective electrical fuse may kill a flock of 120,000 birds in a matter of minutes”


health-related problems before they can result in signifi-cant economic losses. This system also hopes to assist farms that are expanding into more advanced poultry facilities accelerate their learning process.

What specific challenges is the system designed to address, and how?

Optimum performance, especially of large farms with complex facilities, is like a puzzle. To ensure optimum performance, all the major components of the produc-tion chain should be in harmony, from the hatchery to the market and from the feed mill to the compost.

To have harmonious and well-coordinated parts requires precise monitoring, astonishing attention to detail, strict enforcement of SOPs, projection and forecasting which are great strengths of the Japanese.

More than a regular disease outbreak that may result in mortalities of up to 30 percent in a week, a single de-fective electrical fuse may kill a flock of 120,000 birds in a matter of minutes. These types of situation are just some of the challenges that the Integrated Health Man-agement System would like to address. Knowing which parts can significantly influence the outcome of the en-tire operation, especially the small ones that are often neglected, is essential.

The system is currently being tested in some pilot farms and we hope that it can be finally completed by second half of next year.

What was the significance for you of winning the WP-VA-Zoetis Young Poultry Veterinarian award?

The WVPA-Zoetis Young Poultry Veterinarian Award is a meaningful one. It is a testament that young poultry veterinarians from anywhere in the world are also given

the chance to be recognised for their works based on merit. Being considered as a young ambassador of the profession, the experience is also a life-changing one as it encourages me to live the rest of my life according to the spirit of the award.

What career goals and research aims will you focus on in the years to come?

At present, I am conducting a national molecular epi-demiological characterisation of livestock and poultry diseases in the Philippines. My end-goal is to obtain well-characterised strains of veterinary pathogens that can be use in the development of diagnostic test kits and other immunotherapeutic compounds. Knowing the prevalent strains, genotypes and serotypes of veterinary pathogens in the country is very important for a more efficient diagnosis, prevention, treatment and control of animal diseases. Ultimately, I dream of establishing a molecularly confirmed database and genetic map of animal diseases and to formulate applied products that can help attain food sufficiency in the region.

In the future, I hope to put up an Avian Health Research Unit in my University if funds will be available to carry out integrated researches encompassing not only the do-

“To ensure optimum performance, all the major components of the production chain should be in harmony”

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mestic poultry but also the wild bird population. South-east Asia is a haven for wild birds and the biodiversity of avian species in the region is immense. At present, diseases affecting wild birds in this region are virtually unknown. Understanding that wild birds perform impor-tant roles in the maintenance, transmission and spread of pathogens, the characterisation of diseases affecting wild birds should be performed to protect not only the domestic poultry population but, most importantly, to safeguard human health from transboundary zoonotic diseases [diseases that can pass from animal species to humans] in the region.

Understanding the important role of poultry nutrition in the production, I am contemplating pursuing a profes-sional course in Animal Nutrition or a Masters degree in Business Administration to solve industry-wide prob-lems, knowing that economics and marketing play mas-sive, vital roles in the industry. Lastly and most especial-

ly, I would like to put up my own private company and poultry farm in the near future.

In your view what are the most important areas for de-velopment in the Philippines’ poultry industry?

The most important issues affecting the local poultry in-dustry as a whole are high feed prices and highly volatile farm gate prices.

Unlike other countries, no subsidies on feeds are being given to our farmers. The dumping of cheap imports and rampant smuggling of foreign products are causing market distortions resulting in the closure of inefficient farms.

High electricity costs, high marketing and logistics costs, an inefficient transport system, inadequate infrastruc-tures, farm displacements due to zoning regulations, fre-quent typhoons and natural calamities are some of the other major factors affecting the industry. Periodically there are also shortages or excesses in the supply of parent stocks, resulting in horrible market prices. These are areas for development that require the sincere par-ticipation of the government and all the stakeholders.

“The most important issues affecting the local poultry industry as a whole are high feed prices and highly volatile farm gate prices”



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East Asia’s pig industry steps up to the challenge of surging demographics

East Asia’s pig industry steps up to the challenge of surging demographics In China and across East Asia and beyond, dramatic population growth is driving unprecedented demand for pig products. But from the Philippines to Cambodia the boom is forcing rapid change on the Asia-Pacific industry. Dr Steven McOrist, a Hong Kong-based consultant pig veterinarian, reports on the major trends in the region, both in moving to mass production and ensuring animal and human health standards are maintained at scale.


The past 20 years have seen a five-fold increase in pork consumption in East Asia. This has been due to higher economic and living standards for increasing numbers of people, which leads to a greater consumption of meat protein, combined with a strong local cultural preference for pig meat. This consistently strong demand has led in turn to an increased supply of farmed pig products across the region, with greater breeding farm capacities and a shift to larger, more intensive systems.

Larger, more intensive farms are often seen as having more secure production pro-grammes, thanks to a more stable supply of fattening pigs to market and their stronger emphasis on land usage and food safety within the production system. In many parts of East Asia this perception – along with related factors, such as stronger finance, slaughter contracts and product branding – has led to consolidation, with many small- and medium-sized pig farms merging into larger enterprises. To serve the increase in pig supply, it’s likely that the related Asian systems of slaughterhouse and processing operations will likewise undergo further consolidation and technical improvements.

In mainland China, many of these larger companies are now moving away from the tra-ditional pig-dense locations around Shanghai and Beijing, towards sites in more open arable areas of central and northern China.

Similar consolidations, and the expansion of pig-farm operations into rural areas and away from the peripheries of cities, has occurred throughout Vietnam, Indonesia, Ma-laysia and Thailand. The majority of the pig industry in Cambodia and Philippines has not yet followed suit, and remains based on small- to medium-sized operations, but the consolidation trend is likely to reach those countries in due course. In Japan and the Republic of Korea, meanwhile, most of the industry remains dependent on medi-um-sized farm operations.

It can be predicted that within ten years, eight out of the largest ten pig-production companies in the world will be based inside China. Despite their rapid growth, these burgeoning companies in the PRC currently report good profits, with the Wens pig farm-ing group (the largest such group in China) reporting an RMB 10 million (around USD 1.4 million) profit for the first nine months of 2016. The farm-gate price of a typical 100kg finisher pig in China has remained circa RMB 2,000 (USD 300) for some years now. Similar strong prices are consistently evident across East Asia, with farm-gate prices for a typical 100kg finisher pig in the Philippines circa PHP 9,500 (USD 200). The actual profit per pig naturally varies depending on feed prices and facility costs.

“To serve the increase in pig supply, it’s likely that the related Asian systems of slaughterhouse and processing operations will likewise undergo further consolidation and technical improvements”

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Farm-gate prices in Asia also tend to be maintained by national restrictions on imported pork.

This rapid growth in some Asian pig-farming industries has created its own problems, with high staff turnovers and a greater need for expertise – such as oversight of the operational details by trained technical managers on these larger farms. Important operational details usually involve issues such as feeding and water strategy, light levels, heat detection and semen quality. The individual owners of many Asian pig farms have tended to make limited use of trained technical experts, such as genet-icists, nutritionists, veterinarians or environmental sci-entists. There is therefore a limited application of stand-ardised global research, such as decision-making about interventions based on controlled animal trials. There is also a limited availability and usage of standard animal diagnostics tools in the Asian pig industry, such as his-topathology, serology and microbiology. There remain ongoing problems in the increased usage of vaccines in China and elsewhere: the quality of local vaccines can be variable, and standards for delivering vaccines, from the manufacturers to the how they are administered to pigs on farms, are uneven. Correcting these failings in the next few years would probably enhance the useful-ness of current therapies and vaccines and improve pig health and, ultimately, production.

In most countries in Asia, the generally required vac-cines and therapies for the pig industry for major health

issues, such as porcine reproductive and respiratory syndrome (PRRS), are now largely supplied by various multinational companies (Boehringer Ingelheim, Zoet-is, Elanco, Ceva and several others). These companies have a strong focus on R&D and consistently produce well-researched products of known efficacy and safety.

Some products with a more local focus, such as Japa-nese encephalitis vaccines, tend to be manufactured in East Asia. However, unlike most countries, in China 90 percent of the animal-health market is taken up by local companies, led by various state-owned enterprises, such as the China Animal Husbandry Group (CAHG). Among the total of circa 1,800 Chinese animal health compa-nies, around100 are vaccine companies. The remaining 10 percent of China’s animal-health market is taken by the multinational companies. China’s pattern of govern-ment programmes for mandatory vaccines is likely to change in 2017, with the removal of PRRS and classical swine fever (CSF) vaccines from the list of compulsory vaccines. This will leave only foot and mouth disease (FMD) on the list of government-controlled vaccines for pigs. It has been publicly suggested by Chinese author-

Modern backyard farm in central Luzon, the Philippines. (Picture Dr S McOrist 2016)


“There remain ongoing problems in the increased usage of vaccines in China and elsewhere”


A modern farm in Shanxi province, central China. (Picture Dr S McOrist 2016)

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ities (such as Xue Tingwu, president of CAHG) that im-ported vaccines made by multinational companies tend to be higher-quality products (with higher prices), which are more suited for use on large pig-breeding farms. It is therefore suggested that Chinese domestic vaccine products are cheaper and more suited to local commer-cial production farm operations. This discussion leaves open the trend of medium-sized “farms in the middle”, which are now expanding in size and complexity and re-quire useful vaccine products to maintain their produc-tion and expansion.

These expanding farm systems in East Asia also face a range of other challenges. Pig-dense production areas in Asia remain vulnerable to known health challenges, such as PRRS and CSF, as well as the phenomenon of vi-rus genome shifts, which can bring new strains and alter vaccine efficacy – this has recently occurred with PED, PRRS, PCV-2 and pseudorabies. It can be predicted that new changes and shifts will appear in these and other

viruses. There is growing pressure to improve feed effi-ciency of pigs with competition for dietary raw materials and rising feed costs. In general, Asian consumers (and politicians) are mainly concerned about the provision of tasty, nutritious and affordable pig-meat protein to their countries’ large and growing populations. Concerns re-garding antibiotic drug resistance or perceived animal welfare issues in intensive livestock systems therefore receive less attention than in northern Europe.

These issues are also affected by a recent major trend in the way that Asian people, including pig farmers, receive information and then make decisions and share their experiences. This information exchange is shifting away

from printed media towards digital technology such as WeChat and other digital forums, like The Pig Site, to provide valuable data on animal husbandry. Major com-panies involved in supplying products to the pig industry (vaccines, equipment, feed additives etc) are making sol-id investments in digital infrastructure to keep a close connection to the pig industry and its people. The prob-lem of possible misinformation – whether accidental or intentional – appearing on digital chat platforms needs to be recognised in the pig industry, along with all other sectors in which social media has become influential.

The backyard family-farm sector currently makes up around 30 to 40 percent of the entire pig farming indus-try across East Asia. Rural and urban backyard farmers typically sell only five to ten pigs per year to local mar-kets. The comparatively low farm-gate prices are offset for farmers and their families by the lower input costs and the strong asset protections provided by these live-stock – for many families the pigs represent a “living bank account”. It could well be the case, therefore, that this sector will remain surprisingly stable.

“The backyard family-farm sector currently makes up around 30 to 40 percent of the entire pig farming industry across East Asia”


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Thanks to rising disposable incomes and an increasing concern for quality produce, India is currently seeing a greater consumer preference for branded milk and milk. It’s a trend that reflects healthy growth in India’s dairy sector, which will soon see capacity reach around 105 million litres per day, and is expecting an infusion of around $2.21 billion in capital expenditure over the next three years.

India is the world’s largest milk producer, contributing 19 per cent of global production, followed by the US,

China, Pakistan and Brazil. It is also the world’s largest consumer of dairy products, absorbing almost 100 per cent of its own milk production. Dairy products are a major source of cheap and nutri-tious food to millions of people in India and the only acceptable source of animal protein for the large vege-tarian segment of the population, particularly among the landless, small and marginal farmers and women.

While most of the world’s major milk producers saw

How India became the world’s most dynamic dairy market Since the Indian government began ‘Operation Flood’ in 1970, the country has undergone a dramatic dairy revolution to become the world’s biggest milk producer. Forty-seven years on, the sector is showing no signs of slowing, in a nation where cattle are more sacred than ever.

How India became the world’s most dynamic dairy market


production rise between 1980 and 2003, India saw the largest increase by far – 176 per cent – in this period. The tremendous surge in these years was primarily due to the Indian government’s dairy-farming policy, known as ‘Operation Flood’.

Launched in 1970, Operation Flood was the world’s big-gest dairy development programme, a project led by India’s National Dairy Development Board (NDDB) that transformed India from a milk-deficient nation into the planet’s largest milk producer. Per capita availability of

milk almost doubled, increasing from 176g per day in 1990-91 to 337g per day by 2015-16, which is well above the world average of 229g per day. India surpassed the previous number-one milk producer, the US, in 1998 and by 2010-11 had cornered about 16 per cent of global output.

The project also created a “national milk grid” across India, linking milk producers across the country with consumers in more than 700 towns and cities, and even today, that framework is bearing fruit.

Focusing on a maturing market

In this context of greatly expanded choice and availabili-ty, India’s dairy market is witnessing a shift in consumer preferences towards branded, value-added products. To meet this demand, organised dairies are investing in brand building and scaling up their operations, par-ticularly in the areas of processing and milk-collection infrastructure.

As R.S. Sodhi, managing director of the country’s largest dairy co-operative, the Gujarat Cooperative Milk Market-ing Federation (GCMMF) – which owns the successful Amul brand – points out: “We primarily sell branded prod-ucts. Around 95 per cent is branded products, only 5 per cent is as a commodity. Of this 95 per cent, around 50 per cent comes from value-added products like cheese, ghee [clarified butter] and paneer [fresh cheese].”

Anuj Sethi, director at ratings agency Crisil expects the organised dairy sector is set to expand capital expendi-ture (capex) strategically to ensure there is geographical diversification that strengthens milk procurement.

“Northern India, especially Uttar Pradesh, Punjab and Haryana, which are big on milk production but have low organised dairy penetration, are set to witness the high-est capacity addition,” says Sethi, adding that nearly a third of the overall capex is expected to be undertaken by GCMMF and its Amul brand.

Sethi suggests the value-added segment is set to wit-ness 22-24 per cent growth (CAGR) over the next three years, with ice-cream, cheese and yoghurt expected to register the highest expansion.

Curd, meanwhile, was practically a non-existent product

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category for major dairies two decades ago, since curd and buttermilk in India are almost entirely made from milk at home. However, in 2015, the total market was pegged at $1.83 billion.

Government intervenes to keep upmomentum

India’s government has also got in on the act. Aiming to double farmers’ incomes over the next five years, the Delhi administration is chalking out a national action plan to attract more foreign investment into the dairy sector. It is also working on a plan to raise national milk production even further – to 242 million tonnes from the present 155 million tonnes.

At a recent meeting in New Delhi, agriculture minister Radha Mohan Singh said milk production has become a major economic activity among rural households and farmers, who are adopting dairying alongside their main business to augment their incomes.

Pointing out that about 70 million rural households are engaged in milk production, Singh said small and mar-ginal farmers, along with landless labourers, produce between one and three litres of milk per day, which ac-counts for most of the milk produced in the country.

The government is also keen to encourage small farm-ers and households to rear indigenous breeds of cat-tle, through various projects. There are 37 recognised breeds of cattle in India, in addition to large number of non-descript cattle.

Though several indigenous breeds have declined, local cattle breeds tend to have several advantages over ex-

otic breeds such as better disease resistance and great-er suitability for low input management systems and draught work.

Indigenous cattle in India are also robust and resilient and are particularly suited to the climate and environ-ment of their respective breeding areas, according to Dr P K Singh, senior scientist at the National Bureau of Ani-mal Genetic Resources.

Noting the link to a rising consumer preference for or-ganic products across the country, Dr Singh says de-mand for milk from indigenous cows has been on the rise “to avoid health hazards caused by over-use of inor-ganic fertilisers and chemical pesticides”.

“The last 30 to 40 years have seen a lot of mechani-

“Indigenous cattle in India are robust and resilient and are particularly suited to the climate and environment of their respective breeding areas...”

How India became the world’s most dynamic dairy market


sation,” he says. “The use of tractor instead of bullock power, the use of chemical fertilisers instead of organic manure has upset the balance. Today’s generation are willing to pay more for organic agricultural produce as well as more for indigenous cow’s milk.”

Dr Singh says the government is also looking to increase milk production from “remote areas of the country where dairy has not been given proper emphasis in the past. Areas like Bihar, eastern states of the country as well as the north-east states should soon see an increase in milk production.”

Pros and cons for overseas investors

As the Indian dairy industry catches the imagination of corporate giants, it is estimated it will attract invest-

ments worth $1.4 billion over the next couple of years.

But while the Indian government is acting to encourage foreign direct investment in animal husbandry, some industry experts believe global dairy giants may be re-luctant to come in because of the blanket ban on cow slaughter in the country. Experts note that in internation-al markets, unproductive cattle go to slaughter houses after being in dairies for 14 or 15 years. A company gen-erally expects a 50-60 per cent return on investment on the sale of each cow.

However, the issue of cow slaughter has repeatedly made headlines and has now taken on political over-tones in India, with just eight of India’s 29 states permit-ting the consumption of beef or the slaughter of cows.

Kuldeep Saluja of Sterling Agro Industries, which makes dairy products under the Nova brand, says since 95 per cent of cattle used in commercial dairy farming globally are cows and not buffaloes, which is not the case in In-dia, the country is not lucrative enough to attract foreign direct investment in animal husbandry.

Despite the drawbacks, the promise in the sector is too lucrative to ignore. Global dairy firms such as Germany’s Hochland Group, Denmark’s Arla, Dutch dairy co-opera-tive FrieslandCampina, Fonterra of New Zealand, French cheesemaker Fromageries Bel, and Mexico’s Grupo Lala have all been scouting the Indian market for opportuni-ties.

Dairy continues to be a sought after business both for private-equity investors as well as strategic investors, notes Dhanraj Bhagat, a partner at Grant Thornton In-dia. Traditional dairies have been operating with several inefficiencies, he adds, all of which present an opportu-nity to streamline and scale up operations for investors.

Milk producers are teaming up with investors to meet the growing demand for milk with a focus to improve animal productivity and increase milk production.

Dairy companies in India have very strong procurement capabilities and product manufacturing skills, but most of these companies are located away from metros and major towns. To move to the next level, the rich expe-rience of private-equity investors is proving beneficial.

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Shrimping horizonsHow shrimp farmers are saving thousands of miles of mangrove in Vietnam For decades Vietnam’s Mekong Delta has been under threat from one of its most lucrative industries. But now shrimp farming is being used to conserve, rather than deplete, the region’s precious mangrove forests. Ann Moey and Tony Watts, for the International Union for Conservation of Nature (IUCN), report on the collaboration behind one of East Asia’s sustainability success stories.

Since the 1980s, a surge in shrimp farming has endan-gered mangroves around the world. Global growth has also increased the sector’s carbon dioxide emissions and exposed shorelines and coastal communities to erosion and storm surges.

During the past three decades, Vietnam has lost most of its mangroves, primarily due to the expansion of shrimp farming – a major contributor to Vietnam’s economy, gen-erating USD 3.1 billion in export earnings in 2013 alone.

Vietnam is also highly vulnerable to rising sea levels and climate change, particularly in the low-lying Mekong Del-ta. Mangroves protect coastal regions against tidal waves and storm surges; they are vital fish nursery grounds; they provide timber, honey and other products; and they raise land levels by trapping sediment. They also sequester car-bon faster than any other type of forest.

The sustainability of the shrimp sector and the conser-

vation of mangroves for coastal protection are therefore both national priorities.

To help the Vietnamese government address these com-peting priorities, IUCN and the Dutch NGO SNV Nether-lands Development Organisation have implemented the Mangroves and Markets (MAM) project, funded by the International Climate Initiative, in Cà Mau to help shrimp farmers achieve organic certification under the Natur-land label.

The Naturland standard requires each farm to have at least 50 per cent mangrove cover. Farmers who can demonstrate this then have the option of selling their certified shrimp to the Minh Phu Seafood Corporation.

The project also successfully supported Cà Mau in pi-loting a Payment for Ecosystem Services (PES) system. This system provides an incentive for mangrove conser-vation and restoration by paying farmers an additional

Shrimping horizons


VND 500,000 (£17.77) per hectare of mangrove for pro-viding ‘ecosystem services’.

The Ministry of Agriculture and Rural Development (MARD) has been preparing a national regulation on PES in aquaculture since 2011. Initially, MARD struggled to design a financial mechanism that was technically and socially grounded as organic shrimp farmers are both producers and users of the mangrove goods and services.

MARD preferred an indirect PES whereby funds are de-posited in a MARD-managed fund and then redistributed to beneficiaries. Unfortunately, this approach only works well with PES schemes upstream of dams, where there is a single buyer of the goods and services provided by well forested watershed, but not with smallholder shrimp farmers. MARD included no provisions for independent monitoring of mangrove cover of the kind provided by IMO. PES payments were essentially seen as welfare payments unrelated to performance.

This is where MAM stepped in and recommended a di-rect approach whereby the processor pays the farmers for the goods and services they provide, and mangrove cover is monitored by a third-party. This direct approach was subsequently accepted by MARD.

By the end of the first phase of the project, over 2,000 shrimp farmers were trained (or retrained) in certi-fied organic shrimp production. Of these, over 1,000 farmers managing 7,000 hectares of integrated man-grove-shrimp had signed contracts to maintain 50 per cent mangrove cover in their farm and over 500 farmers had been certified using the Naturland organic standard.

The first phase of the project received awards from the Cà Mau government for helping the province meet its socio-economic and environmental goals.

The project also trained farmers on personal hygiene and waste management and co-financed the provision

of 1,000 toilet kits and the replanting of 80 hectares of mangroves in shrimp ponds, thereby assisting hundreds more farmers to meet the Naturland standard.

The second phase of the project, which has just started, will replicate and scale up the results of the first phase in Cà Mau, in nearby Ben Tre, and Trà Vinh provinces. Between them, the three provinces contain half the man-groves in the Mekong Delta.

The project will support 5,000 farmers to practise man-grove polyculture, primarily by offering financial incen-tives (and supporting implementation of environmental regulations) to produce organic shrimp for export. The project will also engage international organisations in-volved in certification to better integrate deforestation issues into Naturland’s standards.

Meanwhile, IUCN’s Mangroves and Markets project links sustainable shrimp farmers with markets, in order to cre-ate economic incentives for the more mangrove-friendly shrimp cultivation model they adopt. Once again, in or-der to obtain certification the farms must have at least 50 per cent mangrove cover.

“The project will support 5,000 farmers to practise mangrove polyculture, primarily by offering financial incentives to produce organic shrimp for export”

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In switching from intensive shrimp monoculture to the integrated mangrove-shrimp model, or ‘mangrove poly-culture’, farmers are able to diversify – producing a range of products including shrimp, fish, crabs and mol-luscs. Disease resistance is increased as well, reducing the farmers’ reliance on chemicals.

Changing attitudes in the region has been complicated by restricted access to education in the Mekong Delta. Only 20 per cent of the farmers in the project have a high-school education and many of the older generation are illiterate. This has led to heavy investment in training.

Here, a farmer tests the water acidity to determine its suit-ability for the introduction of shrimp larvae.

Training was provided for 1,300 shrimp-farming house-holds in 2014 alone, and some have reported an annual income increasing from VND 60-70 million (USD 2,684-3,132) to VND 150-200 million (USD 6,711-8,948) after joining the programme.

Businesses have to participate in organic shrimp farming certification if the approach is to be sustainable, and IUCN and SNV Netherlands Development Organisation have worked closely with Minh Phu, Vietnam’s largest shrimp exporter. Minh Phu has so far signed contracts with 1,150 farmers managing 6,972 hectares.

Shrimping horizons

“Changing attitudes in the region has been complicated by restricted access to education in the Mekong Delta. Only 20 per cent of the farmers in the project have a high-school education”


Ca Mau province has almost 100,000 hectares of man-groves, and is responsible for half of Vietnam’s shrimp production.

To help scale the mangrove polyculture approach, the project negotiated with the provincial government and shrimp processing companies to set minimum stand-ards for certified organic shrimp.

This decision, which was issued by the people’s commit-tee, the executive arm of the provincial government re-sponsible for formulating and implementing policy, recog-nises organic shrimp farmers as providers and sellers of ecosystem goods and services that flow from well-man-aged mangroves. The consumers of organic shrimp are mostly in Europe, the US, Japan and South Korea.

One farmer explained that mangroves used to be seen as the enemy but their value as part of a sustainable farming system is now well understood.

An analysis of land-cover change by the Hanoi-based Space Technology Institute using satellite images

shows that mangrove cover in Nhung Mien, in Cà Mau province, increased from 39 percent to 44 percent be-tween 2013 and 2015.

Minh Phu’s CEO, Le Van Quang, has signalled his commit-ment to expand into Ben Tre and Trà Vinh, two other prov-inces in the Mekong Delta, as part of a broader multi-prov-ince initiative to build an organic coast that is biologically diverse, profitable and resilient to rising sea levels.

Media plays an important role in helping to raise aware-ness about how the sustainability of the shrimp sector and the conservation of mangroves for coastal protec-tion go hand in hand.

Here members of the Vietnamese press interviews one of the farmers who received organic certification.

Conclusion

MAM is a spin-off of the Mangroves for the Future (MFF) programme, a regional coastal ecosystem initiative, co-chaired by IUCN and UNDP, spanning 11 countries across across Asia and the Indian Ocean. A number of MFF mangrove-polyculture projects in Ben The and Trà Vinh in Vietnam have been well received with uptake from local authorities, and upscaled through MAM.

“Ca Mau province has almost 100,000 hectares of mangroves, and is responsible for half of Vietnam’s shrimp production”

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Industry newsThe latest news from across the globe

Merial hosts hatchery symposium for key accounts

The Intercontinental Hotel Bangkok will host on Monday 13 March 300 delegates from across Asia for Merial Asia’s symposium Let’s Speak Avian: Hatchery Solutions. You can view the full programme here.

The symposium presents five internationally renowned speakers. Industry veteran Scott Martin will share the experience of 38 years and discuss practical approach-es to improving hatchery performance with better bios-ecurity and management. Dr. Keith Bramwell, an exten-sion specialist for the University of Arkansas, will focus on the impact of egg holding in the hatchery. Dr. Julien Flori, a veterinarian with experience of hatcheries and layer breeders in several countries, will share his knowl-edge of embryo physiology and chick quality assess-ment. Dr. Guillermo Zavala, an internationally respected poultry consultant, will discuss vaccination and disease prevention in the hatchery while Dr. Chris Fritts, with her years of experience in developing equipment for Merial’s Global VTS team, will explain the importance of well-de-signed vaccination equipment and demonstrate some exciting new technologies.

With this symposium, Merial aims to stay ahead of the market’s evolving needs by keeping in touch with cus-tomer realities. Merial provides comprehensive avian solutions through people, products and services, and strives to become customers’ number one global animal health partner.

Merial will be present at VIV Asia 2017 and invites del-

egates to visit their booth at Hall 104.300. At the booth on 15 March at 3pm, Merial will launch an innovative and easy to use hatchery audit mobile application: HatchVet Expert. It can be used to conduct hatchery audits, focus-ing on three key areas – biosecurity, vaccine handling preparation and application.

Merial is now part of Boehringer Ingellheim.

Ceva focuses on regional swine industry

At VIV Asia 2017 Ceva Animal Health will showcase its leading animal health products, including the swine vaccines Circovac (trusted PCV whole-virus pro-tection for piglets and sows) and Hyo-gen (superior M.hyo protection due to advanced adju-vant technology), Altresyn (for synchronization of gilts, facilitating efficient batch farrowing systems) and the Ceva Lung Program (a tablet-based automated scoring tool for lung health at time of slaughter; nominated for this year’s VIV ASIA e-Novation Award).

Even more importantly, we are really looking forward towards meeting up with Asian swine farm managers, swine veterinarians and others involved in the regional swine industry. We would like to learn from you, to see where we might be able to help you and how we could build partnerships towards an even more successful fu-ture. See you in hall 103, stand 400 & 420.

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