For all these forty years’ industrial development, we have been through transformation and upgrading, never go amiss with hardships and never dare to slow down our paces. If you have the courage to respect the past, you would be endowed with the confidence to innovate and face various challenges. A knowing of the past guarantees a discovering of a new future. An industry expert expressed his insights in the exclusive interview conducted by Poultry International China. Many other more entrepreneurs contributed their entrepreneurial wisdom and business intelligence in the interview.
Practical Experience: from Risk Management to Innovative Thinking
The bird flu, especially the H7N9 flu epidemic outbroke in 2013, brought the broiler and poultry industry into an unprecedented state of deficit and anxiety, and directly hindered the transformation and upgrading of broiler industry. Because of the flu, many yellow and white broiler producing industries were compelled to stop their marketing plan. Some broiler industries had to invest more money and energy into improving their biosafety level of breeding. In recent years, people around the world have been struggling for the same measure to against the flu epidemic, trying to achieve the ultimate biosafety level and eliminating bacteria, which obviously is deviated from the basic law of bio-ecological balance of nature.
Li Jinghui
However, the economic losses caused by the unscientific propagation of H7N9 is far greater than that by the slaughtering of flu-infected poultry. Li Jinghui, Chairman of China Broiler Alliance, observed that “all those years, our country has been developing strategies concerning pig, mutton sheep, egg, and milk. Accordingly, popular medias put a lot effort on propagating those animal proteins. And they seldom attach importance to chicken and poultry meat, on the contrary, they disseminated lots of misguiding information about chicken and poultry meat. H7N9 is a typical example to prove this, which caused great economic losses of hundreds of billions of dollars for China poultry industry.” He also revealed that China Broiler Alliance already submitted reports to relevant government suggesting the government to promulgate policies to support the development of broiler industry and to include poultry meat industry into national strategic industries. The alliance also suggested national media to increase their positive propaganda about poultry meat and to fight against rumors.
Sun Ximin
The combination of epidemic risk and industrial low period of development will bring greater challenges to the industry and enterprises. “According to the development track of recent years, industrial slow development period actually is a great time to expand production capacity; and its a bad time to expand production capacity during industry fast development period. When production capacity was expanded during slow period, it surely will catch up with the peak industry period, which in this way become a measure to balance the previous losses.” Sun Ximin, founder and chairman of Minhe remarks that “ it is hard to earn money if a company hurries to expand production capacity when the industry is in its high trend.”
Fu Guangming
Presently, many China enterprises have experienced great economic losses out of the emotional factor. Fu Guangming, the founder and chairman of Sunner Group stressed that “take the temperature of raising chicken as example, if workers are in happy mood, they are more likely to adjust the suitable temperature for the chicken houses; if they are in bad emotion, they are unable to adjust the right temperature, which surely will slow down the growth of chicken. Just given a primary estimation, the economic losses caused by worker’s bad emotion almost could reach hundreds of millions of yuan. Therefore, it is quite important to produce a suitable management methods which can minimize the risk of workers’ emotionalization.
All industries around the world value innovation. Apart from introducing and nurturing talents, industries also increase investment in research and development to strengthen innovation. For those forty years, though the application of high technologies in China broiler industry has becomes more and more common, the research investment of chicken industry only occupies less than 5 % of its yearly profits (International experience proves that enterprises will be competitive only if their research investment can reach above 5 % of its yearly profits); nevertheless, the proportion is closely related with enterprises’ actual development needs.
Wang Jinsheng
What really matters is that we should change our way of thinking, transfer innovation into real production and make sure innovation moving ahead of enterprise development. “Methinks, technological innovation depends on our way of thinking, especially sideway of thinking, naming the ability to conquer your own limitation and to seek inspiration and methods from other fields. Most of the time, solutions to problems usually hide somewhere we never expected.” Wang Jinsheng, General Manager of Fovo Food Aquaculture Center, concluded, “concerning the technical innovation in the field of broiler, we have experienced plenty of similar circumstances, for instance, the above mentioned energy-saving poultry housing technology is a technological imitation of vegetable greenhouse technology.”
A Process of Sinicization
The same as other imported things, whiter broiler has been through complicated Sinicization process through 40 years development in China. McDonalds and Kentucky, great drivers of whiter broiler consumption, also steps on the boat of Sinicization in recent years. Coincidentally, Sunner Group, McDonalds and Kentucky’s biggest whiter broiler supplier, even exerts to breed whiter broiler. Likely, Yukou Poultry begins to breed a series of broilers such as WOD168 which already ordered by Wallace, a cheap copy fast food brand of KFC.
Multiple factors and complicated causalities boost the above development trends. A simple description can never reach the core of it. Moreover, independently bred white broilers must compete for market share against import whiter broilers, yellow broilers, and 817 broilers. The competing situation is the same as French slow-growing broilers against fast-glowing broilers, or the same as 817 broilers against yellow broilers in southern China market.
Gong Guifen
“In my opinion, all kinds of broilers has their individual share in the market, because consumers in different regions have different dietary preferences, and also Chinese government has no restriction about the breed of broilers. Diversified development and standardized farming are strongly promoted.” Gong Guifen, secretary general of China Broiler Alliance stressed in an interview with Poultry International China, “the development of broiler industry requires strict balance, and regards to the breed of whiter broilers, it is quite necessary to respect the differentiated and diversified consumption needs in Chinese market, cultivating a Chinese local broiler breed.
Wen Jie
Wen Jie, researcher of Chinese Academy of Agricultural Sciences and veterinary of Beijing animal husbandry, pointed out “the breed of Yellow broilers is too diversified, lacking a leading one. One of the target of genetic improvement plan is to cultivate large-scale broiler breeding enterprises and leading breed. Though different regions prefers different broilers, over-diversified breed of broiler will surely has passive influence on its scale development.
Gu Yunfei
In the past 40 years, benefited from the Reform and Opening-up policy, both white and yellow broiler had kept a rapid development momentum and had made a promising contribution to satisfy people’s protein demands. Gu Yunfei, the founder and chairman of Jinghai Group remarks: “we should make fully use of the present genetic materials and breed white broilers suitable for Chinese market. And let the market make choices.” He then stressed that we should make a balance between the import and domestic broilers. Neither of them should be neglected.
Han Feng
“The headquarter of Aviagen has been nurturing a plan to choose a site to cultivate the ancestral chicken breed. In 2018, I, along with the personnel of the headquarter, visited and inspected sites in Beijing city and Hebei province. However, time still remained immature.” Han Feng, Vice President of Asia Pacific Area and General Manager of China region in Aviagen Company, revealed to Poultry International China in the interview.
Cao Jisheng
Right now, Hubbard ancestral white broiler breed has become the first major category in China. Chairman of Yisheng Share observed: “to give it a primary judgement, the market share of Hubbard will still increase in the future influenced by the change of market demands and the support of Chinese government. The pattern is in constant change. “
Yang Ning
The President of World’s Poultry Science Association and professor of China Agricultural University Yang Ning analyzed, “From a technical point of view, fast grown and big size white broiler breed is the most difficult breed to cultivate. Different generation of broiler requires different treatment. For instance, the selection of commodity generation of broiler depends on broiler’s rapid growth and low feed conversion as well as its carcass traits. However, for breeders, the focus should lay their egg production rate, fertilization rate and survival rate. Therefore, the traits of different boilers should be well balanced.”
Fu Guangming, the chairman of Sunner Group, said: “in 2014, the risk of breed supply was unprecedentedly increased. Inspired by the broiler breeding strategic released by National Program on Broiler Genetic Improvement (2014-2025), Sunner decided to start independent broiler breeding, which will decreased the risk of breed supply and improve international competitiveness.”
Lu Yan
With 30 years development, 817 broiler chicken has been one of the three biggest broiler types. Lù Yan pointed out that the formulation and promotion of Technical Regulations for 817 Broiler Chicken ( Local Standards) promoted the standardization of breeding and production management of 817 chicken.
Sun Hao
CEO of Yokou Poultry Sun Hao remarked: “because of the lack of long-term strategy in terms of the localization of white broiler in China market, the localization process of white broiler has never experienced a sustainable development for all those years. Therefore, ‘to Develop Chinese Agricultural Breed’ has been elevated to the level of national strategy, to correspond which, Agriculture Department already set up Breed Management Department in 2018 and listed white broiler breed as the top concern. By 2030, we expect Yukou Poultry will become one of the three biggest broiler industries in Chinese market.”
A Prime Time Turning to Food Supply Chain
Due to wrong recognition of agriculture, practitioners in agricultural domain are apt to view themselves as employees working in primary industry. However, to some economists, they hold that it is unsuitable to define agriculture as primary industry on present economical development stage. Agriculture industries such as broiler industry actually are in their multiple industrial format. Presently, though the intensification of broiler industry outruns other poultry industry, it still fall behind in its transformation upgrading towards food enterprises as an important part of food supply chain.
At the outbreak of H7N9 influenza, some broiler industries were working on the construction of Cold Chain Logistics and expecting to launch fresh chilled chicken on the markets of large and medium-sized cities. Fresh chilled yellow broilers debuted on Guangdong Province the next year. Right on the junction, supermarkets, Carrefour for instance, were accused by public media and the general public for failed operation to keep fresh chilled chicken under 4℃. Thereafter, the first fresh chilled chicken safety standard -Hygienic Standards for the Production and Management of Fresh Chilled Chicken began its implementation in Shanghai city from April 1st of 2014, requiring a stable temperature between 0～4℃ for slaughtered chicken. it’s been 25 years since China enterprise Dajiang exported 6 tons of fresh chilled chicken to Japan succeeding a stable temperature between -0.6～0.8℃ without quick-freeze. Meanwhile, also began from 2014, the general public finally could eat chickens produced on the same production lines, met the same standards, and be of the same quality of foreign countries. It costs 30 years for broiler industry to commence its initial turning towards to the end consumers for better development.
The transformation and upgrading towards food supply chain are prolonged out of domestic retarded broiler industry development. Plenty of enterprises presently still remains on the stage of risk management for logistics, not to mention the construction of risk management for supply chain. Though finally welcomes its profit period, the industry is still restricted with many shortcomings because of previous deficiency. However, several companies rise to front-runners, represented by CP Group, Sunner Group, and Springsnow Food.
Xie Yi
“The transformation from CP Animal Husbandry to CP Food proved to be a great success. CP Food through this strategic positioning is well accepted and recognized by the industry as well as consumers.” Senior vice president of CP Food in China district Xie Yi commented, “a good few Animal Husbandry enterprises begin their development based on the whole industry chain; however, many enterprises quit, daunted by the complicated procedure production, logistic, procession, marketing and operation and oppressed by required high investment of funds and staffs.”
“Since the incorporation of Sunner Food into Sunner Group, our industry chain integration and business operation mode extended to sub branches of cooked food, retail stores, group meals, becoming a core competence of Sunner Group. More than that, Sunner’s production base is situated on Wuyi Mountain, a great geographic barrier to secure biosafety.” Founder of CP Group Fu Guangming says, “ during recent years, enterprises have been on the monument of constant transformation from raw chicken to prepared chicken and vise verse. Sunner brand influence has been increasing with the opening of ManyQ Restaurant and the establishment of food research basements in Shanghai city and at Guangzhe county.”
Zheng Weixin
Springsnow Food renewed its strategic position in 2010, turning to prepared chicken food and positioning itself as a food company. In 2018, it achieved a prepared chicken food rate of 50%. Zheng Weixin, CEO of Springsnow food, demonstrated, ”our transition towards prepared chicken food is decided by our own advantages. It is important to find your own advantages and make the right strategic choice. The potentiality of instant chicken food selling in convenience store would be huge in the future.”
