DYNAMICS OF THE PHILIPPINE FEEDMILL INDUSTRY:

AN ASSESSMENT1

ELMER R. ESPLANA Bureau of Animal Industry

Visayas Avenue, Diliman, Quezon City Telephone No. 925-9229

Email: el_esplana@yahoo.com.ph

CYRIL L. SOLIABAN National Agricultural and Fishery Council

Apacible Hall, DA Compound, Elliptical Road Diliman, Quezon City

Telephone No. 920-4309 Email: clsoliaban@yahoo.com

ABSTRACT

The Philippine feedmill industry plays a crucial role in agriculture and fisheries development and

in ensuring food security by providing inputs to the livestock, poultry and aquaculture sectors. Its

capability to produce high quality feeds at reasonable and stable prices will not only have a great

impact on their viability and profitability but more importantly on productivity and

competitiveness towards ensuring quality livestock, poultry and aquaculture products.

Using a supply chain management model, this study assessed the industry in terms of the major

suppliers, the core industry, the feedmilling process, and the feedmill cost structure and market

1 This paper is a revised version of the study submitted to the University of Asia and the Pacific - Applied Business Economics Program’s Food Systems Management course entitled “Introduction to Food Systems,” dated December 8, 2004. This research paper won Third Prize Winner for the National Best R & D Paper Award under Socio-Economics Category during the 17th National Research Symposium, October 5, 2005, held in RDMIC Bldg., Bureau of Agricultural Research, Philippine Department of Agriculture, Diliman, Quezon City. The earlier version of this paper already won Best Paper Award under Completed Projects Category during the BAI-in-house R & D Review, Animal Products Development Center, Marulas, Valenzuela City in July 21, 2005. This material can also be downloaded online at http://www.smileyberks.com/cpr.

with the end view of determining what interventions and/or policies to recommend specifically

for oversight and coordinating bodies.

Using Porter’s five forces model, this paper analyzed the industry in terms of the dominant

economic traits, competition, suppliers, buyers, substitutes, and potential entrants, key success

factors, and potential competitive moves. This was aimed at determining relevant information for

stakeholders especially from the business sector to use for strategic decision making purposes.

Data and information were gathered basically through archival research, inquiries from

databanks of repository agencies and selected interviews with key informants from the industry.

At the end, recommendations to various stakeholders were provided.

Keywords: Philippine feedmill industry, poultry and livestock and aquaculture sectors, corn industry, food security

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INTRODUCTION

Driven by the advancement in process technology and in animal nutrition researches geared

towards production efficiency and cost effectiveness and optimization, the Philippine feedmill

industry is slowly but surely evolving into a highly and globally competitive industry serving the

domestic livestock, poultry and, recently, aquaculture with mixed feed rations that are

comparable with the finest feeds in the world.

The Philippine feedmill industry today plays a crucial role in agriculture and fisheries

development and in ensuring food security by providing inputs to the livestock and poultry sector

(and lately to aquaculture production). Being an intermediary industry to these sectors and the

feed input suppliers, its capability to produce high quality feeds at reasonable and stable prices

will not only have a great impact on their viability and profitability but more importantly on

productivity and competitiveness towards ensuring quality livestock, poultry and aquaculture

products.

The feedmilling process is at the center of the “farm-to-food” supply chain or the integrated

“from conception to consumption” systems approach, notably the food systems management

model, as presented below (Please see Figure 1). It is an intermediary industry supplying the

livestock and poultry sector and lately in aquaculture operations, like prawns, “bangus” and

“tilapia,” with the major production input, the mixed feeds ration.

On the other hand, the industry uses big portion of the production outputs of the corn industry as

well as the minor products and by-products or residues of some agriculture and processing

sectors like rice bran, mollases, copra meal, pollard, tallow, fish meal, meat and bone meal

among others.

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Figure 1. The Food Systems Management Model

Farm Production Subsystem

Input Subsystem

Processing Subsystem

Marketing Subsystem

Market:

Corn Rice

Sugar Coconut

Domestic

GlobalFeedmill Industry

Livestock, Poultry &

Aquaculture Industry

The FOOD SYSTEMS

MANAGEMENT MODEL “from conception to

consumption”

OBJECTIVES

In general, this paper aimed to analyze the dynamics of the Philippine feedmill industry using the

framework of supply chain management approach which is from “conception to consumption”

and Porter’s five competitive forces model.

Specifically, this study aimed to: a) describe and analyze the feedmill industry in terms of input

supply, production, market, the key players, the feedmill process, and feedmill cost structure

with end view of determining what interventions and/or policies to recommend specifically for

oversight and coordinating bodies; and b) assess the feedmill industry in terms of its dominant

economic traits, the competitors within the industry, the power of suppliers and buyers, possible

substitutes, and potential entrants, key success factors, and potential competitive moves in order

to determine relevant information for stakeholders especially from the business sector to use for

strategic decision making purposes.

METHODOLOGY

Data gathering was conducted basically through archival research and selected interviews with

key informants from the industry. In particular, representatives of the Philippine Association of

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Feedmillers, Inc. and the Bureau of Animal Industry were interviewed. In gathering statistical

data, industry situation and current updates, reports and presentation materials used during

meetings, conventions, and conferences from experts and focal persons of the feedmill industry

and the agriculture sector were used. Statistics were also taken from the Bureau of Agricultural

Statistics, Bureau of Animal Industry and Philippine Association of Feedmillers, Inc.

In analyzing the dynamics of the Philippine feedmill industry, this paper used two major models.

This includes a supply chain management model (presented earlier in Figure 1.) and the Porter’s

Five Competitive Forces Model (Figure 2) below.

Figure 2. Michael Porter’s Five Competitive Forces Model

RESULTS AND DISCUSSION

The Feedmill Industry

The use of formulated mixed feeds for domesticated animals started only about a century ago.

This led to major breakthroughs in technology, animal nutrition and feeding regime to attain

efficiency in animal production. In the Philippines, the feedmill industry is one of the agriculture

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sub-sectors that has evolved progressively for the last five decades and lately has been growing

strong with estimated expansion rate at an average of six to seven percent annually.

The industry is an intermediate operation supporting the livestock and poultry industry. It

produces 5 to 7 million metric tons (M MT) of feeds per year. In 2004, the industry’s estimated

feed supply is about 5.475 M MT valued at P89.1 billion equal to about 109.5 million 50kg.-bags

(Mb). The industry is import dependent but is also closely linked with the feed grain sector

particularly corn or maize. It also utilizes big portion of indigenous or local raw materials. Corn

for feeds consumption is estimated at 70% of the total corn production. Corn usage for local

feeds average at 3.15 M MT coming from the corn production of about 4.48 M MT annually.

The Department of Agriculture is aiming to increase corn production in the next four years to 6.0

M MT to fill the gap in the seasonal shortage of corn, now covered through importation.

Importations of corn for animal feeds run to 0.485 M MT annually.

The country’s feedmill industry is composed of commercial feed millers, integrated farm feed

millers, and home-mixer feed millers. Commercial feed millers are solely engaged in the feed

production business. Integrated farm feed millers are directly connected to and have fully

integrated with livestock and poultry production, and majority of them also sell feeds

commercially. Finally, the home-mixer feed millers uses their feed production in their own

farms and is also called the backyard feed millers. In 2002, their share in the aggregate feed

production is as follows:

Table 1. Percentage Share of Production of Different Feedmiller Groups, 2002

FEEDMILL GROUP M 50kg.-bags M MT Share No. of Feedmills

Commercial Feedmills 39.2 1.96 38% Integrated Feedmills 23.0 1.15 22%

Registered Feedmills 62.2 3.11 60% 389 Home-mixer Feedmills 42.0 2.10 40% 590

TOTAL 104.2 5.21 100% 979

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The Feedmill Market

The feedmill industry is entirely dependent on the needs of the livestock and poultry industry.

Its total output is intended to provide for the feed requirements of livestock and poultry

operations. Similarly, feed cost accounts for the biggest component in any animal production

venture and this ranges from 50% to 70% of the total production cost depending on the density

of operation. For broiler operation, cost of feeds accounts for 80% of the total cost, composed of

65% during the broiler growing period and 15% as feed component of the cost of day-old-chicks

representing the feed cost of the breeders used. Same is true with hog industry operations.

Established and stable markets of the Feedmill Industry are the commercial hog and chicken

growers and the egg producers. Combined, they accounted for 78% of the total market in 2003.

Emerging markets include game fowl, duck, ostrich and aquaculture operations which require

high-value feeds. Presented below (Table 2) are the reported annual commercial feed production

of the registered feedmills in thousand 50kg -bags – commercial and integrators – for the years

2001, 2002 and 2003:

Table 2: Annual Commercial Production of Registered Mills, 2001-2003

FEEDS BY TYPE OF ANIMAL 2001 2002 2003 2003

SHARE Ave. Growth (2001-2003)

Hogs 20,000 28,789 29,804 50.1% 22.1%

Chicken Broiler 7,934 8,854 8,943 15.0% 6.2% Chicken Layer 5,411 7,551 7,448 12.5% 17.3% Aqua 2,804 5,043 4,088 6.9% 20.7% Game Fowl 2,913 4,132 4,173 7.0% 19.7% Duck 1,334 2,806 2,337 3.9% 32.4%

Cattle 5 14 12 0.0% 59.3%

Horse 34 54 47 0.1% 17.5% Others 1,186 1,787 2,676 4.5% 50.2%

TOTAL FEEDS 41,621 59,030 59,528 100.0% 19.6%

Source of Data: BAI-AFSD Consolidated Registered Feedmills Production Data Philippine Association of Feed Millers, Inc. (PAFMI) Report

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The Philippine feedmill industry products are highly differentiated. General product distinctions

are basically based on feeds final form – mash, pellets or crumbles - and on the different

production phase or age – booster or pre-starter, starter, grower, or finisher. Presented in Table 3

below are the major classifications or feed types along with the market prices.

Table 3. Market Prices of Different Feed Types, As of December 2004

Mash Pellets or Crumbles Product Types or Classification

Quantity per Bag Per Bag Per Kilo Per Bag Per Kilo

A Poultry Feeds Broiler Feeds Chick Booster 25 kls. 675.00 27.00 695.00 27.80 Broiler Starter 50 kls. 917.00 18.34 937.00 18.74 Broiler Finisher 50 kls. 882.00 17.64 902.00 18.04 Layer Feeds Chick Starter 50 kls. 867.00 17.34 887.00 17.74 Chick Grower 50 kls. 832.00 16.64 852.00 17.04 Pullet Developer 50 kls. 817.00 16.64 837.00 16.74 Laying I 50 kls. 867.00 17.34 887.00 17.74 Laying II 50 kls. 852.00 17.04 877.00 17.54

Mash Pellets or Crumbles Product Types or Classification

Quantity per Bag Per Bag Per Kilo Per Bag Per Kilo

B Hog Feeds

Pre Starter 50 kls. 754.00 30.16 784.00 31.36

Hog Starter 50 kls. 907.00 18.14 927.00 18.54

Hog Grower 50 kls. 792.00 15.84 812.00 16.24

Hog Finisher 50 kls. 757.00 15.14 777.00 15.54

Hog Brood Sow 50 kls. 747.00 14.94 767.00 15.34

Lactating 50 kls. 837.00 16.74 857.00 17.14

C Special Feeds

Duck Layer 50 kls. - - 755.00 15.10

Quail Layer 50 kls. 730.00 14.60 - -

Pigeon Pellet 50 kls. - - 645.00 12.90

D Fish Feeds

Starter 50 kls. - - 675.00 27.00

Grower 50 kls. - - 600.00 24.00

Finisher 50 kls. - - 580.00 23.20

Floater 50 kls. - - 650.00 26.00 Source of Data: PAFMI Price Monitoring Report

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This development provides measure for cost efficiency and effectiveness and is the result of

advancement in process technology and animal nutritional consideration and the wide array of

and specifications of different feedstuffs and substitutes. With the use of computer-aided “least-

cost” formulation and the marketing shift to customization process and the growing demand for

high value but sensitive aquaculture feeds, product qualities differed strongly.

There are 4,979 number of feed products registered to date from about 400 different brand names

of the 389 registered feedmillers nationwide. Market niching is notably feasible for the high

value emerging markets like the aquaculture, game fowl and ostrich operation.

The marketing and distribution channel of the feedmill industry passes through several market

intermediaries either via feedmiller-owned delivery trucks or private haulers or truckers. Feeds

are sold to poultry and livestock growers directly to growers but majority through this channel

(Please see Figure 4 in Appendix A). The distributor normally charged 2% to 3% of the market

price while the dealer or retailer charged a 5% to 10% margin.

The Feedmill Industry Key Players

The industry is dominantly led by a very active association called the PAFMI or the Philippine

Association of Feed Millers, Inc. The group started in 1951 and actively pursued the interest of

the industry and its members. PAFMI continuously do so including participation in government

consultation meetings, safety measures and advocacy activities and other initiatives affecting the

industry. Mr. B.G. Tope, PAFMI President in 2001 stressed that “despite the ambient plight of

the poultry and livestock industry, feed milling in the country has remained stable. The feed

milling industry is one of the most vibrant sectors in agribusiness.” Today, PAFMI is composed

of 22 members, mostly dominant and major industry players.

Major feedmill groups comprising the Feedmill Industry are presented earlier together with its

market share. Table 4 below summarizes their annual production volume from 2000 to 2003 in

million metric tons (M MT) with equivalent total quantity in million 50 kg.-bags.

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Table 4. Summary of Annual Feed Production

Production in million metric tons (M MT) FEEDMILL GROUP

2000 2001 2002 2003 Commercial Feedmills 1.55 1.24 1.96 2.00 Integrated Feedmills 0.90 0.86 1.15 1.17

Registered Feedmills 2.45 2.10 3.11 3.17 Home-mixer Feedmills 1.90 2.27 2.10 2.20

TOTAL PRODUCTION 4.35 4.37 5.21 5.37 Equivalent M 50kg.-bags 87.00 87.39 104.20 107.30

Source of Data: PAFMI Report and authors’ estimates

From the above table, it can be gleaned that progressive growth of the industry’s major groups is

evidently noticeable for the past four years, despite the PAFMI report of underutilized capacity.

Table 5 below details the said capacity utilization in 2000.

Table 5. Capacity Utilization of Commercial and Home-Mixer Feedmills

2000 Production Rated Capacity FEEDMILL GROUP Share M 50kg.-bags #of Feedmill Annually

Percent Utilization

Commercial and Integrated Feedmills 56% 49.0 321 115.0 43%

Home-mixer Feedmills 44% 38.0 590 70.0 54% TOTAL 100% 87.0 911 185.0 47%

Source of Data: PAFMI Report

As of August 2004, there are 389 total registered commercial and integrated feedmills with a

combined total daily capacity of 23,106 MT. Table 6 below comparatively summarizes the

feedmills according to plant sizes and its geographical location for 1997 to 2004.

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Table 6. Registered Commercial and Integrated Feedmills by Plant Size and by Location 1997 versus 2004

1997 2004 Annual Growth

FEEDMILL GROUP # of Feedmill Capacity # of

Feedmill Capacity # of Feedmill Capacity

A. Plant Size Below 20MT 131 1,158 187 1,153 5.2% -0.1%20Mt to <50MT 68 2,235 96 2,789 5.1% 3.2%50MT & above 69 12,015 106 19,164 6.3% 6.9%

B. Location Region 1 10 847 9 1,538 -1.4% 8.9%Region 2 10 285 8 938 -3.1% 18.6%Region 3 69 4,065 114 7,731 7.4% 9.6%NCR 47 4,171 49 4,793 0.6% 2.0%Region 4 66 2,795 95 3,877 5.3% 4.8%Region 5 17 598 14 550 -2.7% -1.2%Region 6 8 478 13 469 7.2% -0.3%Region 7 17 1,292 31 1,458 9.0% 1.7%Region 8 1 8 3 16 17.0% 10.4%Region 9 3 15 6 96 10.5% 30.4%Region 10 4 260 10 413 14.0% 6.8%Region 11 12 437 18 936 6.0% 11.5%Region 12 3 147 16 283 27.0% 9.8%Region 13 1 10 3 8 17.0% -3.1%

TOTAL 268 15,408 389 23,106 5.5% 6.0% Source of Basic Data: Animal Feed Standard Division of the Bureau of Animal Industry

Registered feedmills grew annually by 5.5% in number and by 6.0% by capacity from 1997 to

2004. By plant size, the growth is even but in capacity, the lesser than 20MT capacity recorded a

contraction while there is a strong growth performance in large plants. By location, the industry

is located mostly in the Mega Manila area where heavy demand for livestock and poultry is

present. Feedmill plants located in this area account for more than 70% of the registered

feedmill capacity nationwide.

The top ten (10) leading registered animal feed producers – both commercial and integrated

feedmillers – are outlined below in Table 7. These are presented together with their brand names

carried in the market, the daily production capacity including rented facilities, average business

volume or sales from 1996 to 2000, the plant location or area of operation, excluding sales

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territories covered through private dealers or distributors and current name of contacts or

authorized representatives.

Table 7. Top 10 Registered Feedmillers Based on Capacity

Name of Company Brand Name Daily

Capacity (MT)

Average Sale* (M PhP)

SAN MIGUEL FOODS B-Meg Feeds 3,229 8,665.10CARGILL PHILIPPINES Purina Feeds 1,760 2,673.30SWIFT FOODS Blue Ribbon Feeds 1,612 7,973.30GENERAL MILLING General Feeds and

Megamix 1,520 5,481.50

VITARICH CORPORATION Vitarich, Vitalux and Bionic

1,387 6,073.30

TYSON AGRO-VENTURES Tyson Feeds 800 No available data SUN JIN PHILIPPINES Sun Jin Meals 760 No available data FOREMOST FARMS Famous and Rich

feeds 720 No available data

UNIVERSAL ROBINA CORPORATION

Star Feeds 555 598 13,272.10

GRAIN HANDLERS Mighty Feeds 450 No available data Note: *CY 1996-2000 Source of Data: BAI-AFSD Regulatory Data with PAFMI Supplemental Data

The rated capacity of these ten (10) feed companies aggregating to 12,836 MT per 8-hour

operation accounted to 56% of the registered total capacity for commercial and integrated

feedmillers. It is also noted that one or two feed producers cover the whole country extensively

either through their own plant or under toll processing arrangement with other private

feedmillers.

Likewise, two to four of the listed feedmillers are purely in commercial operation and the rest

have an integrated poultry and livestock operation with one or two having full and complete

integrated operation. With the exemption of Foremost Farms and Tyson Agro-Ventures Inc., the

rest covered the whole country both through private dealership or distributorship and with ample

storage area for both raw materials and finished products. One or two companies follow the

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“niche” marketing approach. Almost all in the list have diversified feed-product lines including

aquaculture feeds and other high-value feed products. Their feedmilling facilities are of latest

technology capable of producing all feed-forms and even the highly sensitive feed products, and

complete with basic laboratory support operation and farm-testing facilities for their finished

feed products. Some of these companies are capable of producing or mixing its own critical and

important vitamin-mineral premixes and feed-medication application.

The top 10 registered feedmilling are widely dispersed throughout the country as shown in Table

8, below. San Miguel Foods, Inc. has the biggest feedmilling capacity among the top ten and

their products are available nationwide.

Of the 389 registered feedmillers, the top 10 companies have been contributing 56% of the total

while the rest (379) have been contributing 44%. This suggests that the feedmilling industry is

highly dominated by big players in terms production capacity and output. This simply implies

that any potential entrant has to consider these strategic groups as competitors.

Table 8. Top 10 Feedmills Rated Capacity per Region and Share in Total Capacity

(per 8-hour Shift) (in MT)

COMPANY 1 2I 3 4 NCR 5 6 7 8 9 10 11 12 13 Total % Share

San Miguel Foods 840 795 480 443 160 50 193 5 171 92 3,229 14.0

Cargill Phils. 640 880 240 1,760 7.6

Swift Foods 108 324 800 40 60 40 80 160 1,612 7.0 General Milling 800 720 1,520 6.6

Vitarich Corp. 1,123 80 120 64 1,387 6.0 Tyson Agro-Ventures 800 800 3.5

Sun Jin Phils. 760 760 3.3 Foremost Farms 720 720 3.1

Universal Robina 450 40 108 598 2.6

Grain Handlers 450 450 1.9

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Table 8. continuation… Rated Capa-city of Top 10 Feedmillings

1,480 903 4,367 443 3,220 160 170 1,013 5 40 371 664 - - 12,836 55.6

Regional % Share of Top 10 to Total

96 96 56 11 67 29 36 69 31 42 90 71 - - 50

Rated Capa-city of other feedmillings

53 35 3,364 3,434 1,573 390 299 445 11 56 42 272 282 8 10,264 44.4

Other Feed-mill % Share to Total

3 4 44 89 33 71 64 31 69 58 10 29 100 100 50

Total Rated Capacity per Region

1 ,538 938 7,731 3,877 4,793 550 469 1,458 16 96 413 936 282 8 23,106

Source: BAI-AFSD Regulatory Data

The Feedmilling Process

Development in the process technology and in the nutritional research aspect of both animal

feedstuffs, and feed ingredients and material had greatly influenced the existing condition of the

country’s Feedmill Industry. It is now dominated by the big integrated operators equipped with

the latest technology model for feedmilling facilities together with bulk materials handling

systems. Diagram of the Feedmill Process is presented below followed by brief description of

each phase.

Figure 3. The Feedmilling Process

Grinding and RM

Preparation

Mixing

Conditioning Pelleting Extrusion

FG Bagging Storage & Delivery

The Feedmill Process

RM Receiving &

Storage

Feedmilling is the process of choosing and preparing raw materials (RM) to be mixed

homogenously in proportion following or accurately translating a feed formulation into a form

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acceptable to the intended animal species. It is basically a size reducing, weighing and mixing

process which may be described in the following steps:

Raw Materials Preparation and Grinding. Raw materials like corn grains are carefully tested

and weighed for size reduction. These are fed into a hammerhill and/or granulator to produce

milled and ground grains for storage prior to batch weighing and proportioning. Similarly, corn

gluten feed lumps, corn germ cakes and other large pieces are separately fed into crushers where

they are reduced to fine meals. Other fine meal ingredients such as wheat, pollard, meat and bone

meal, soybean meal, and fish meal are individually stored in sacks piled on pallets. Various

micro-ingredients such as antibiotics, vitamins and additives are premixed and temporarily

stored. Proper grinding will create a particle size and surface area that will permit the most and

the best use of the energy and nutrients in the feed materials.

Weighing and Proportioning. The different materials are then discharged and weighed

automatically in the batching scale or mechanically in small plants. Weighing is done according

to sequence and required production of the RM.

Feed Formulation and Mixing. After weighing, the materials are brought to the master mixer

where small quantities of other materials like limestone and salt are introduced and thoroughly

mixed with other ingredients and pre-mixed materials. The mixture is then discharged as a mash

into the molasses admixer where it is introduced at a regulated flow and continuously mixed with

the mash. Although this process seems quite simple, it is actually the most critical process and

takes into consideration the specifications based on feed formulation and nutritional

requirements as predetermined by a nutritionist. Factors like quality, availability and prices of

different raw materials, balanced nutritional requirement of a specific animal, farm management

practices, environmental challenges, feed format and milling process are considered.

Cooking or Conditioning either Pelleting or Extrusion. After mixing, the mixture is then

heated then transferred into the pelletizing or extrusion machine. Pellets or extruded format

(crumble form) is important so that feeds do not disintegrate before consumption. For aquatic

feeds, pelleting is necessary to avoid wastages and pond pollution for unconsumed feeds.

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Bagging, Storage and Delivery. Finally, feeds are weighed into bags and closed by a bag closer

and conveyed for transport to the finished goods (FG) warehouses or sales outlets.

The objective of the feedmilling is to optimize derivation of the nutritional value of the raw

materials towards maximum conversion into meat, egg or milk. In attaining this, feed finished

goods are produced in different final forms which include mash, pelleted, crumble and extruded.

For highly sensitive aquaculture feeds, the feeds are in palletized form to attain maximum level

of water stability not only for efficiency but also reducing the risk of bottom contamination or

pollution resulting from unconsumed feeds.

Feeds are manufactured in four forms, namely: Mash Feeds, Pelleted Feeds, Crumbled Feeds,

Extruded Feeds

The raw materials (RM) for feeds production are classified into protein source, energy source

and others. They are either sourced locally or imported. About 75% of the feed costs are

imported especially when yellow corn or wheat is used as the main source of energy. In cases of

a good supply of corn, cost of imported raw materials in the ration drops to about 50% of the

feed costs.

Energy-source materials. Energy constitutes by far the largest component of feed rations.

Carbohydrate is the most abundant form of energy in plant materials. It is also the most widely

available source of energy for feeds. Fats and oils from plants and animals are the most

concentrated form of energy available (about 2.25 times as many calories per unit weight as

carbohydrates but the supply is limited). Protein is the third basic source of energy, but it is too

valuable for use as protein for meeting vital body function to be depended on as a major energy

source. Common energy source materials for feeds include: Common Corn or Maize, Corn Bran,

Corn Grits or Hominy Grits, Sorghum, Wheat Bran, Coconut Meat, Cane Molasses, Cane Sugar, Tallow

or Animal Fat, and Vegetable Fat or Oil.

Protein-source materials. All grains and grain by-products are deficient in both amount and

quality of protein, hence it is necessary to supplement animal feed ration from protein source

which are either animal-source protein (AP) or plant-source protein (PP). The following are

common protein sources for animal feeds: Blood Meal, Dried buttermilk, Dried Whey, Fish Meal ,

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Shrimp Meal, Skimmilk Powder, Alfala Leaf Meal, Brewer’s Dried Yeast, Copra or Coconut Oil Meal,

Corn By-products, Ipil-ipil Leaf Meal, Soybean Meal.

Aside from energy and protein sources, other animal feed supplements are used in the

manufacture of feeds. This includes the following: Mineral Supplements, Vitamin Supplements,

Synthetic Amino Acids, Non-Protein Nitrogeneous (NPN) compound, Unidentified Growth Factors

(UGF).

Synthetic Energy Sources. Government R&D program are continuously being pursed in

identifying indigenous feed ingredients substitutes practically due to the prohibiting cost of

mixed feed ration in the livestock and poultry industry. Among the materials being considered

by local scientists as substitutes for costly imported feedstuffs for energy-source, protein-source

and non-conventional (less costly) supplements follows: Arrowroot (Maranta arundinacea), Camote

Meal, Cassava Meal, Coffee, Coco Residue, Gabi, Rice Middlings, Rice Meal, African Snail, Algae,

Earthworm Meal, Giant Toad Meal, Anabiong, Azolla, Banana Leaf Meal, Banana Rejects and Peelings,

Mulberry Leaves

Supplier Industry

The corn industry is essentially the only major supplier to feed millers. The other major feed

ingredients are basically imported and small amounts are locally produced and are obtained from

varied sources mostly in the form of by-products from among small producers to the feed millers

themselves.

Corn (specifically yellow corn) accounts for about 70 percent of local feed requirements. No

matter how big in terms of size and regardless of their financial capability, feed millers use

yellow corn in the production of feeds. The availability and affordability of this input has a great

impact on feed millers’ operations.

Corn production in the Philippines is undertaken mostly by small farmers numbering just about

more than a million with an average size of 1.7 hectares. It represents around 20% of our arable

land and more than 20% of our agricultural labor force. The bulk of production is concentrated in

five regions namely - Cagayan Valley which accounts for 22% of production, Central Mindanao

which produces 16%, Southern Mindanao which contributes 15%, ARMM which shares another

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15% and Northern Mindanao which provides 12%. The rest are scattered in different parts of the

country like Ilocos Region, Central Luzon and Central Visayas.

On a national average, corn production in the Philippines is inefficient. Our corn producers have

not attained the efficiency and self-sufficiency to compete against imported corn and corn

substitutes. They can only supply about 80% of our national requirements. Demand for corn is

around 5.5 to 6 million MT of which 4.0 million MT is yellow corn while national production

only reaches around 4.5 million MT, of which 3.0 million MT is yellow corn. Shortfall in supply

is mostly addressed by importation of yellow corn of about 200,000 MT per year and wheat of

about 600,000 MT per year. The balance is addressed by other local corn substitutes – mainly

cassava and other imported corn substitutes. Our corn producers have not attained the efficiency

and self-sufficiency to compete against imported corn and corn substitutes.

The volume of production of corn, the main ingredients in the production of feeds, during the

past-seven years has been growing slowly by 1-percent (Please see Table 9 below). With the

effort of the government to increase the production due to the big requirement of the livestock

and poultry industry players on feeds, the production of corn in 2003 increased by 7 percent at

4.6 million MT. The slow growth in the production of corn in the country is due to the low

profitability due to high cost of production, lack of post-harvest infrastructure, and high logistic

costs to handle and maintain the quality of their produce in larger scale. The National Food

Authority has existing program for the corn farmers, and yet the impact to the producers is

hardly felt. In addition to the problem of low profitability, and post harvest infrastructure, the

production of corn is perceived as a secondary product to rice and high-value crops.

Table 9. Volume of Production of Corn and others with Average Growth Rate

Raw Materials 2003 Production ('000 MT)

Growth Rate (2003/2002)

Average Growth Rate

(1999-03 and 1997-03*) Corn 4,616 6.86% 1.06%*Cassava 1,622 14.29% -3.75%Camote 547 1.61% -0.45%

Source of Basic Data: BAS

Table 9 shows the 2003 production of two major local RM substitutes, the cassava and camote.

Cassava posted -3.75% and camote at -0.45% growth rate during the past five years, these two

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feed substitutes are not increasing in terms of production, though in 2003, they grew by 14% and

2%, respectively. The decreasing trend in the past five years in the production of these two

commodities could be attributed to the lack of specific government program, as substitute feed

ingredients to support the producers of these two commodities to increase their production.

In 2003, the volume of importation of feed wheat and soybean meal decreased by 0.24% and

9.21%, respectively, compared to 2002 level of 1,151 thousand MT and 1,457 thousand MT.

During the past four years, feed wheat has been increasing by an average of 36.07%, while

8.43%, for soybean meal. Although, the volume of Philippine imports for soybean meal is bigger

than feed wheat, the growth of feed wheat has been increasing by more than four-times at 36%

compared to soybean meal of 8% because feed wheat is a direct substitute of corn, while

soybean is a feed major protein source.

Table 10. Volume of Importation - Feed Wheat & Soybean Meal and Average

Growth Rate

Raw materials 2003 Importation ('000 MT)

Growth Rate (2003/2002)

Ave. Growth Rate (2000-03)

Feed Wheat 1,149 -0.24% 36.07% Soybean Meal 1,323 -9.21% 8.43%

Source of Basic Data: PAFMI

Among four major type of imported raw materials used as substitute ingredients for the

processing of feeds, soybean meal has been contributing 49% on the average yearly while feed

wheat has been contributing 35% with fish meal at 4% and corn meal at 13%. Table 11 below

details the average annual importation of these materials.

Table 11. Average Yearly Importation of Imported Raw Materials and Percent Share

Imported Raw Materials Average importation (In '000 MT) % Share

Feed Wheat (for 2000-2003) 880 34.51%Soybean Meal (for 2000-2003) 1,250 49.04%Corn Meal (for1995-2000) 328 12.87%Fish Meal (for1994-1999) 91 3.58%

Total 2,550 100.00% Source of Data: PAFMI

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ANALYSIS OF THE FEEDMILL INDUSTRY

A. Dominant Economic Traits

Market size and growth rate. The total estimated value of the feedmill industry production in

2003 reached P84 billion inclusive of the commercial, integrated and home-mixer feedmills. This

registered a combined 14.0% growth; 21.0% for commercial and integrated feedmills and 4.0%

for home-mixer feedmills. Table 12 below presents the annual value of feedmill industry

production for 2001 to 2003 in million pesos. Duck and aqua feeds are the emerging and

promising source of growth in the animal feeds production and can be considered the sunrise

sector of the feedmill industry.

Table 12. Annual Value of Production, 2001 to 2003

FEEDMILL GROUP 2001 2002 2003 Average

GROWTH (2001-2003)

Commercial and Integrated Feedmills

36,956.1 52,155.9 53,982.1 20.86

Home-mixer Feedmills 27,430.0 27,531.0 29,588.6 3.86

Total Estimated Value of Production

64,386.1 79,686.9 83,570.7 13.93

Source of Data: Based on BAI and PAFMI reports

Hypothetical volume for commercial feeds for the three major products - hogs, broilers and

chicken layers are computed on the historical production data from the year 2000 to 2003. These

define the estimated total market of the Feedmill Industry, running at 8.7 M MT in 2003. Details

are presented in Table 13 below.

Table 13. Estimated Total Market Volume of the Feedmill Industry

TOTAL FEED DEMAND 2000 2001 2002 2003 Growth HOG Production Total Liveweight (‘000 MT) 1,517.8 1,584.5 1,667.8 1,733.1 4.8%Feed Requirements (‘000 MT) 4,705.2 4,912.0 5,170.1 5,372.6 (Liveweight @ 3.1 FCR)

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Table 13. continuation… BROILER Production Total Liveweight (‘000 MT) 997.8 1,098.8 1,173.8 1,188.8 6.1% Feed Requirements (‘000 MT) 2,195.2 2,417.4 2,582.3 2,615.3 (Liveweight @ 2.2 FCR) CHICKEN EGGS Production Total ‘000 MT 243.4 246.7 260.8 274.8 4.2% Feed Requirements (‘000 MT) 547.6 554.0 586.8 618.3 (@18pcs/kg@1.5FCR/dozen) TOTAL FEEDS REQUIREMENT In ‘000 MT 7,448.0 7,883.4 8,339.2 8,606.2 5.1% In million 50 kgs.-bags 149.0 157.7 166.8 172.1

Source of Data: BAS Annual Industry Performance Report

Aquaculture production in the Philippines is an emerging users and niche market of animal

feeds. During the past 7-year period, average yearly growth rate in the total aquaculture industry

has been increasing by six percent (Please see the aquaculture type by fish species in Table 14

below). The bulk of aquaculture feeds users are milkfish and tilapia farmers. The Philippines is

recognized as one of the major producers of tilapia in the Asia Pacific region with internationally

recognized production technology. In 2003, total aquaculture production posted at 466 thousand

MT. Some of the major feed industry players that are engaged in aquaculture feeds production

are San Miguel, Gargill, Philippines, Swift Foods, Sateh Feeds Corporation, Sun Jin Philippines,

to name some.

Table 14. Volume of Production and Average Growth of Aquaculture Fish (‘000 MT)

Aquaculture Type 2003 Production

Growth Rate (2003/2002)

Average Growth Rate (1997-03)

Total Aquaculture 465.80 5.03 6.07Milkfish 246.60 6.20 7.65Tilapia 136.00 11.11 6.77Shrimp 35.00 -1.41 -2.24Others 48.20 -9.74 4.65

Source of Data: BAS

Scope of Competitiveness. Animal feeds produced by the feedmill industry are sold 100%

domestically. According to PAFMI members, the industry is not yet capable of exporting feed

products due to high cost of production. Within the local feedmillling companies, San Miguel

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Foods, Inc. has the highest no. of feedmilling establishments (25) either company-owned or

using other feedmilling facilities under tool processing arrangement. Cargill Philippines has four

feedmilling facilities, Swift Foods Inc., 9; Vitarich, 4; Universal Robina, 3; Sun Jin Phils, 2;

General Milling, 3; and the rest of the top 10 feedmillers have only one feedmilling

establishments.

Number of rivals and relative sizes. There are 389 feedmillers in the country. Twenty-two

feedmillers are members of Philippine Association of Feed Millers, Inc. These feedmillers are

the major key players of the industry contributing 40-percent of the total feedmilling industry

production and 60-percent of the commercial feedmilling output. Most of the top 10 feedmillers

are members of PAFMI. These feedmilling companies own multibillion businesses in the

Philippines, some of which are into backward and forward integration. This includes San Miguel

Foods Inc., Swift Foods, Universal Robina, Foremost Farms, General Milling Corporation and

Vitarich Corporation. Cargill Phils, and Sun Jin Phils. are feedmilling companies with

international affiliations.

Prevalence of backward and forward integration. Backward and forward integration exist in

the feedmilling industry, particularly the integrator players. Not all of them are into backward

integration though San Miguel, Vitarich, Foremost Farms, Universal Robina, and Cargill Phils,

to some extent, are into backward and forward integration.

Ease of entry and exit. Basically, there are low entry barriers for small-scale operation but very

high for large-scale operation. A 25-MT capacity plant requires P34 million investment

equivalent to medium-size feedmilling plant. In addition, there is low but stable returns derived

from the sale of differentiated, and customized type of feeds.

Degree of product differentiation. Animal feeds are highly differentiated and customized as

demonstrated by 4,979 number of registered feedmill products and 400 different brands of feeds

produced by 389 feedmillers locally throughout the country. Some feedmillers have more than

two brands of animal feed products while other still stick to one brand name only.

Capacity Utilization. Most feedmilling companies are under-utilized which at the industry level

was estimated by the Philippine Association of Feed Millers, Inc. at 47% in 2000. However,

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based on our hypothetical demand computation, their utilization rate in 2000 could reach to

about 58% while 55% in 2001. Utilization rate of feedmilling establishments increased as much

as 62% in years 2002 to 2003.

Essentially, there is strong indication that reported production volume of the whole industry is

understated. If only, individual industry stakeholders would improve their transparency in

declaring their volume of production to the government and the general public as a whole,

demand gap could only be at 25% or equivalent to 75-percent utilization rate. This is because of

the fact that feedmilling establishments, in general, are still surviving, and have maintained their

operations when their utilization rate is even below 50-percent as they claimed.

B. Five Competitive Forces (Porter’s Model)

Intensity of rivalry among existing firms. There is a high level of competition among the

existing feedmilling companies due to high product differentiation. As revealed earlier, a total of

4,979 were registered feedmill products and 400 different brands of feeds were produced by 389

feedmillers local throughout the country. About 590 home mixers with combined output of 5.21

million MT were produced for 62% utilization rate. There are ten (10) companies competing

with persistent and dynamic reprisal. However, despite the high product differentiation, there are

low switching costs on the part of the small/backyard buyers (consumers) because the price

difference among brands/types is insignificant. The consumers can easily change brands

depending the availability of products in their respective areas.

Moreover, the intensity of rivalry among existing firms is high due to high R & D capability and

latest infrastructure facilities for high capacity operations. Another consideration for the intensity

of rivalry among existing firms, particularly the integrators and big commercial feedmillers are

in getting higher volume share of imported raw materials, particularly soybean meal, fish meal,

wheat meal, highly sensitive and critical mineral and vitamin premixes, and corn from time-to-

time. In some cases, the government intervenes in the importation of raw materials (i.e. corn,

soybean meal) by reducing further the tariff rates to lower the landed cost of substitute feed

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ingredients, for the requirement livestock and poultry industry. The intensity of rivalry has been

tremendously high, in some cases, when political considerations are taken into the picture.

Bargaining power of suppliers. Suppliers of yellow corn wield a strong bargaining power

primarily because of three reasons. First, yellow corn is a very important raw material input to

feed millers accounting for about 50 to 70% of their total requirements, depending on the density

of operation. Second, small producers and commercial growers are now starting to solidify their

stand as far as the industry is concerned. Majority of corn growers are now members of the

Philippine Maize Federation, Inc. which is an alliance of corn producers with the primary

objective of ensuring the development of the industry and protection of corn farmers. It has

become a strong lobby group advocating for the promotion of safety nets for the industry in line

with the liberalization of trade and other concerns. Third, corn is a major political crop and the

government, despite existing laws regulating and protecting the industry, particularly in terms of

trade and production, is still and often times intervening for their cause.

This strong bargaining power, however is balanced by some other factors which tend to negate

the above mentioned strengths. First, feedmillers as backward integrators of the livestock and

poultry industry are further backward integrating as corn producers themselves. This is usually

done through contract growing to ensure that their supply of corn is always and readily available.

Second, the constant search for corn substitutes has always been a major research and

development strategy of the feedmilling industry. Aside from wheat, cassava and other root

crops, e.g. sweet potato, have been considered and tested for viability as corn substitutes.

Third, although corn is a major political crop which commands strong government regulation to

protect corn producers, feedmillers especially the integrated livestock and poultry raisers are

equally becoming powerful in lobbying for their cause. Their stand is basically anchored by the

fact that meat in its various forms is also a basic commodity and the industry is actually

contributing more to the economy compared to the corn sector.

As such, the bargaining power of the corn industry as major supplier of raw material to

feedmillers ultimately depends on government policies and balancing acts and other factors such

as presence or absence of viable substitutes.

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Bargaining power of buyers. The bargaining power of buyers is strong among the big

integrators because of the following reasons. First, 21 percent of the production of the industry

are being dominated by the integrated feedmillers engaged in forward integration market.

Second, there are high switching costs because of differentiation of animal feeds as demonstrated

by 4,979 number of registered and sometimes customized feedmill products with a total of 400

different kinds of brand names which needs high capital investment.

However, there is a low bargaining power for small and backyard raisers because they are price

takers. They come from the grassroots level which normally makes backyard livestock and

poultry production a piggy bank. From time to time, though in smaller quantity of purchase,

they also buy animal feeds that are being retailed in the livestock and poultry supply stores

located within their vicinity or nearby locality. Backyard raisers are numerous particularly in

hog raising which accounted to 79%, on the average, from 1994 to 2004 of total hog industry

players. Due to lack of competitiveness, they are normally marginalized by the existence of big

players in the livestock and poultry industry, and in effect are always losers in market price

fluctuations. As a result, they cannot influence market prices of feeds, including their produce

animal, thereby always at the losing end of the supply chain. In some cases, the commercial

feeds accounts for 50 to 70% of the total production cost of backyard raisers, depending on the

density of operation.

Threat of feeds substitutes. Forty six percent (46%) of the livestock and poultry industry uses

substitutes. Many backyard livestock growers are still using the food-leftovers and range feeding

method. Current research and development is also presently prioritizing the improvement of

indigenous materials and agriculture by products for feeds and feedstuffs substitutes. Among the

raw materials being eyed by local scientists as substitutes for highly expensive imported

feedstuffs are the following: 1) arrowroot (Maranta arundinacea; 2) sweet potato (Ipomea

batatas); 3) cassava (Manihot esculanta Crantz) meal; 4) gabi; 5) giant toad meal; 6) Anabiong

(Trema orientalis); and 7) banana rejects and peelings, to name some.

Threat of entry. The entry barriers for small-scale operation are low but very high for large-

scale operations. This is because establishing feedmills requires a large capital investment

which is approximately Php 34 million for a 25MT medium size capacity plant (Please see Table

25

15). Likewise, there is a very high product differentiation attached to technology and animal

nutrition advancement, particularly for high value aqua feeds. Nowadays, major players of the

feedmill industry with integration capability have covered many urbanized high demand areas.

Feedmilling Cost Structure

The feedmiller cost structure varies widely depending largely on density of operation. There is

big cost difference between the small to medium to large scale operation particularly in the level

of investment cost required. For a typical one-toner per day operation, investment ranges to

about P0.3 million to P0.5 million inclusive of the working capital requirements. For large

feedmill plant operation say 50MT per 8-hour shift capacity and with complete storage, bulk or

in sack, facilities and distribution and delivery fleet, total investment will run to hundred of

million of pesos. This is the main reason for big industry player to play really big with

integration, diversification, consolidation and the like strategy to gain economy of scale and

economy of scope.

For an average medium size plant of 25MT per 8-hour shift capacity, total investment required is

about P34.0 million composed of the following: (Please see Table 15):

Table 15. Feedmill Cost Structure for Average Medium Size Plant

PROJECT COST (In ‘000 Pesos)

A Investment Cost Land and improvement 1,500.0 Building and facilities 10,000.0 Machineries and equipment 7,500.0 Delivery equipment and vehicles 3,300.0 Furnitures and office equipment 200.0

Total Investment Cost 22,500.0

B Working Capital Requirement Raw materials & finished goods (3 months) 7,500.0 Direct labor 500.0 Manufacturing overhead & operating expenses 2,500.0 5% Contingency provision 1,000.0

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Total Working Capital Requirement 11,500.0

TOTAL PROJECT COST 34,000.0

PROJECTED INCOME AND LOSS (In ‘000 Pesos)

Projected Sales 115,700.0

Less: Cost of Sales 102,200.0

Gross Profit 13,500.0

Less: Selling and administrative expenses 9,250.0

Projected Net Income before Other Charges 4,250.0

The projected cost and financial projection presented in the preceding page is for a 25MT per 8-

hour shift feedmill capacity will provide a 12.5% ROI (Return on Investment), 8 years Payback

period and a P80.0 million Break Even Sales.

Key success factors

Some of the key success factors that contributed to the growth of the feedmilling industry are due

to the adoption of the following strategies:

• Backward and forward integration.

• Intensive advertising promotion of some big players that include B-Meg, Purina, to

name some, which are regularly seen on TV program.

• Adoption of new feedmilling technology, particularly those commercial feedmillers.

• Adherence to quality standard procedures.

• Product differentiation, diversification, innovation and market niching.

• Provision of credit terms by feedmilling companies to their distributors, including

discounts to wholesalers, and some regular customers in the livestock, poultry, and

aquaculture industries.

• Strong participation of the government, private sector, and industry associations in

the conduct of regular International Animal Feed and Veterinary Drug Congress that

serves as a venue of interaction, market matching, and exchange of ideas, plans and

strategies among major feed industry players and alliances in the livestock and

poultry industry.

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Potential Competitive Moves

The potential competitive moves of existing players in industry are the following:

• Determining and obtaining low cost but efficient ration for the optimum growth of

livestock, poultry, and aquaculture crops.

• Construction of more storage facilities of feeds to provide quality products to

customers.

• More aggressive advertising strategies for other top players who have not yet exposed

their company in the mass media advertisement.

• Continued adoption of technology that would decrease production costs and increase

profitability and productivity.

CONCLUSION AND RECOMMENDATIONS

Analysis showed that the Philippine feedmill industry, because of its strategic position and

importance as a link between the raw material feed input suppliers, and the livestock and

poultry and aquaculture sectors, has its share of a lot of issues and problems to settle. First, the

feedmilling capacity in the country has the tendency to be under utilized, to some extent, due to

the non-availability of corn and other local and imported raw materials. This does not include the

intentional wrong declaration of utilization rate by some feedmilling companies to the

government for the reason that they maybe doing away from the right taxes to be collected by the

national revenue-generating agencies. Given this situation, feed requirements of the country’s

animal population are not always fully addressed, in terms of correct volume

declaration/disclosure, and thus, affecting the correct reading of the situation of the industry,

from time to time. As a result of this problem, the high prices of commercial feeds, consequently

increase the prices of livestock, poultry and aquaculture products.

Second, there is also a high cost of production due to quantitative restrictions on importation and

high cost of raw materials. Moreover, despite the availability of numerous potential local

substitutes for raw materials, their supply reliability and acceptance by feed manufacturers and

28

the livestock sector as a whole are still far-fetched. This is actually one of the major problems of

the industry which translates to higher input production cost and a profound impact on

feedmillers operations, engendering a wide gap between the available supply and demand for

feeds. Resolving these problems will surely give a great impact on the government’s drive

towards achieving food security in the country, specifically on the affordability of livestock,

poultry, and aquaculture products.

Foremost among related causes of such gap is the shortfall in corn production which affects the

feed supply since it comprises 50 to 70% of the cost of feeds. The country is importing corn and

its substitutes because the current domestic supply cannot meet the increasing demand.

With the foregoing, the following are recommended:

For the government and other coordinating bodies to:

• Support continued research on possible lower cost substitutes especially for corn and for the

vegetable-based protein to minimize the industry’s dependence on imported soybean meal

and other high cost protein sources.

• Assist in increasing productivity of corn through proper technology and help in the provision

of infrastructure support to improve delivery system (logistics) of raw materials and feeds in

the entire country. This includes construction of farm-to-market roads, ports and cargo space

on board inter-island vessels, as well as storage facilities.

• Support an on-going development and promotion of alternative sources of raw material

ingredients to ensure their availability, supply reliability and ease up dependence on

expensive feed ingredients.

• Provide government support on promotional activities by launching programs on livestock

and poultry production on the use of commercial feeds.

• Conduct study on benchmarking and competitiveness analysis to establish reference points

for the industry in modernizing its facilities and capabilities.

29

For potential entrants to:

• Venture into feed production especially on technologies involving aquaculture feeds which

promises higher return of investments and less competition among existing players.

• Study and consider venturing into offering locally manufactured feeds to the export market

and even into export of products of forward industries like meat and poultry products.

For existing firms to:

• Improve the key business governance values of the feedmill industry in terms of the level of

transparency, accountability, social equity and responsibility, responsiveness, and

participation, to name some.

• Conduct marketing and promotional drive for the use of quality feeds in producing quality

livestock and poultry products in order to beef up demand for commercial feeds and to

address the gap especially among backyard raisers.

• Maximize utilization of indigenous raw materials for feeds including agricultural wastes and

by-products through backward integration either through direct production or contract

growing in order to minimize input costs.

30

REFERENCES

University of Asia and the Pacific. Food and Agri Business Yearbook and Directory. Millenium Edition. 2000.

University of Asia and the Pacific. Food and Agriculture Centennial Book: 100 Years of Philippine Agriculture. 1998.

Corpuz, Perfecto G. Philippine Grain and Feed Annual 2003. GAIN Report. USDA. Foreign Agricultural Service. February 13. 2003.

Alvarez, Ramiro C. Lifeblood of Animal Industry. GreenFields Magazine. November 2001. pp. 12-16.

Caros, Cherrie Annie. Local Feed millers see growth amid challenges. Livestock and Meat Business Magazine. Maiden Issue. Vol. 1. No. 1. pp. 8-10.

Esplana, Elmer R. Chicken Tightness Seen in the Second Quarter. Livestock and Meat Business Magazine. Vol. 1. No. 2. p. 42.

Abella Sison Jaime Abella, DVM. The Philippine Feedmilling and Technology Resource Handbook.

Oldfiles M.E. J.E and W.W. Heinemann. Feeds and Nutrition by Ensminger, Proceedings of the PSAS 38th Annual convention, 18-19 October 2001, Manila. Estacio, Mina, OIC of Animal Feeds Standard Division, BAI. Presentation material to the

National Task Force on Price and Volume Watch meeting. November 12, 2004. Bureau of Animal Industry. Animal Feeds and Standard Division. Statistics of Feedmilling

Industry in the Philippines. An Outlook for the Philippine Feedmilling Industry in the Philippines Today and Beyond

2003. n.d. Industry Project Analysis Paper on the Feed Milling. n.d. Material taken from PAFMI. Villacorta, Zenaida, DVM. The Feedmilling Industry in the Philippines. 1997. Chen, Edwin, President, Bounty Farms, Inc.. Presentation Material for the Layer Sector. Food

and Agriculture: Trials and Truimphs. A Year- End Food and Agri Business Conference. University of Asia and the Pacific. 24 November 2004.

Macaraig, Ramon. Head, Technical Services Dept., Alson’s Aquaculture Corp. Presentation Material for the Aquaculture Sector. Food and Agriculture: Trials and Truimphs. A Year- End Food and Agri Business Conference. University of Asia and the Pacific. 24 November 2004.

Dy, Rolando T., Executive Director. Center for Food and Agribusiness, UA&P. Presentation Material for the Agriculture Scenarios in 2004-2005. Food and Agriculture: Trials and Truimphs. A Year- End Food and Agri Business Conference. University of Asia and the Pacific. 24 November 2004.

Yap, Arthur C., Secretary, Department of Agriculture. Presentation Material entitled “Building on Grains. Pagkain Sapat at Abot Kaya!” Food and Agriculture: Trials and Truimphs. A Year- End Food and Agri Business Conference. University of Asia and the Pacific. 24 November 2004.

Interview with Ms. Ely Miranda and data sourcing. Executive Secretary, PAFMI. Interviews with Ms. Marivic Mapesos, Animal Nutritionist, and Ms. Emily Victorio, Forage and

Pasture Researcher, Research Division. BAI.

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Appendix A

Figure 4. Feedmill Marketing and Distribution Channel

The Marketing and Distribution Channel

Livestock & Poultry Farmers or Growers

Dealers Retailers

Distributor

Feedmill Processor or Manufacturer

32