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India's expansion into Bangladesh concerns local firms

Published on 16 May, 2012, Last updated at 14:25 GMT

Over the previous 2 years 3 of India's largest poultry companies, Amrit, Suguna Foods, and Venkateshwara Hatcheries Group have expanded their businesses into Bangladesh.

The main reason for this expansion, was the attraction of high growth in the Bangladeshi local industry together with the possibilities for increased demand for protein because of the increases in personal incomes coupled with a huge population.

India's top broiler producer and a pioneer in poultry integration, Suguna Foods, has leased a quantity of parent stock farms to breed poultry chicks to market amongst poultry farmers. Suguna have also leased a feed mill for the production of poultry feed locally.

Poultry powerhouse Venkateshwara Hatcheries Group (VH), also popularily known as Venky's, have built a feed plant, named Uttara Food and Feeds Ltd, to allow them to take hold of a part of 2,500,000 MTs of the annual market for poultry and fish feed in the country. Venky's also have plans to bring about a grand parent stock farm in Sylhet.

For Bangladesh, the arrival of foreign companies has created concerns for the local feed and poultry industry firms who are fearful of mismatched competition as foreign companies have the ability to get finance at lower costs.

Convener of Bangladesh Poultry Industries Coordination Committee (BPICC), Moshiur Rahman, told how the government should restrict foreign investment in these sectors where local investors have already developed production capacity.

General secretary of Feed Industries Association of Bangladesh (FIAB), Ihtesham Shahjahan, stated foreign companies enter the Bangladesh market because of the competitive advantage they can get from the lower loan rate of interest they can obtain from overseas.

Shahjahan said the capacity by Bangladeshi companies far exceeds that of the current yearly requirement for 2,700,000-3,000,000 MTs of animal feed.

He questions, "So, why do we invite outsiders with a huge competitive advantage," further urging the government to instead form a listing of other potential investing areas where local companies haven't yet ventured into or else to supply new technology.

"It should be done in consultation with the local industries", he finished with.


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