Energy crisis

1
Energy crisis

• Impact on the Industry its resolution

2
GLOBAL SCENARIO

• 1. World Climactic Changes
• 2. Fuel Supply Demand
• 3. Competitions for Raw Material
• 4. Speculations- Human Greed

3
Impact on the Industry

• Direct
• Indirect

4
Direct impact

• Escalating cost feed, fuels, labour
• ancillary items
• Feed an increase of 35 impact or more as corn
• soybean meal scarcity set in
• Quality source of origin of raw mat.
• Operations lack of funds, cash flow, poor ROI

5
Impact- recent events

• Petrol increase 41
• Diesel increase 63
• Industrial Power tariff increase 26
• What is the incremental cost?

6
Impact recent events

• Incremental cost-
• Broiler Farm Power Diesel (RM0.05 to
  RM0.08/bird)
• Transport To market or Plant
  (RM0.06/bird)
• Feed to
  Farm (RM0.05/bird)
• Finished
  products (RM0.06- 0.08/kg)
• Processing Plant
  Slaughter to Cold-room
• 
  (RM0.05/kg)
• Total RM0.21 per kg OR
  RM16M/month
• Layer eggs (RM0.01 per egg) OR RM6M/month

7
Indirect impact

• Affecting pocket of consumers- expensive
• Tug a war over the ringgit
• Supply overhang

8
Consequence

• Insolvency- cash flow inadequacy
• Farm closures/ Independent millers not spared
• Demise of the mature Poultry Industry
• Loss of jobs
• Reliance on imports if affordable the
• loss of
  foreign exchange
• - Food
  security threat

9
Resolution

• Tweaking the other 30
• Use of non traditional diet
• Getting the Government a new Heart!
• - ceiling price removal (?)
• - local government other agency by- laws-
  farming friendly
• Educating myopic Ministries over importance
• of Industry
• Consolidation- supply ownership
• restructuring
• Getting rid of wastage marketing model,
• 
  storage the
• funds
  to do it!

10
Conclusion

• Prognosis