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Prolonged oversupply, costly inputs to hamper poultry firms this year
Some analysts forecast that the earnings before interest, taxes, depreciation and amortization (EBITDA) of local poultry firms will improve this year but is still under pre-pandemic levels.
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A worker feeds chickens at a poultry farm in Sibreh, Aceh, on Feb. 5, 2022.
(AFP/Chaideer Mahyuddin )
T
he Indonesian poultry industry is poised to see constrained growth this year as firms’ bottom lines are eroded by a prolonged oversupply of live birds and higher input costs, despite an increase in sales last year.
Industry players and analysts have said poultry producers’ earnings before interest, taxes, depreciation and amortization (EBITDA) may improve as a result of rising demand but that the figures would remain below pre-pandemic levels.
Last year, publicly listed poultry firms PT Japfa Comfeed Indonesia, PT Charoen Pokphand Indonesia and PT Malindo Feedmill saw their annual net profits drop 29.8 percent, 19.1 percent and 57.2 percent, respectively.
These declines were despite increases in annual net sales of 9 percent, 10 percent and 21 percent, respectively.
Arief Witjaksono, cofounder of tech start-up Pitik, which helps chicken farmers purchase animal feed and sell their stock, said the prolonged Russia-Ukraine war had disrupted the supply of wheat, a major component of chicken feed.
The disruption had led to soaring input costs for the poultry industry.
"Those two countries are supplying around 30 percent of the global wheat demand. Maybe the price will only drop when the war is over," Arief told The Jakarta Post on Wednesday
