Team:Shanghai City United/Entrepreneurship
BUSINESS PLAN
General Introduction of our Business
Our business focuses on developing novel techniques to produce poultry feed
additives through bioengineering technology. In current grain feeds, xylan causes potential problems’ to
poultry’s digestion, and may lead to serious health concerns to poultry. Our additives contain powerful
probiotics functional in degrading xylan, the application of which in grain feeds will then enhance
poultry’s digestion. We believe that our additives will be a good chioce for feed producers, poultry raisers
and even the general public, who consumes poultry everyday.
Background
Feed industry is an important part of the production system of the breeding
industry, and it is also one of the important symbols to measure the level of breeding modernization. In
recent years, the total output value and operating income of China's feed industry showed a declining trend.
In 2019, the total output value of China's feed industry was 808.81 billion RMB, which decreased by 78.4
billion RMB compared with 2018. In 2019, China's feed industry revenue was 778 billion RMB, down 90.9
billion RMB from 2018.
Take the year 2020 as an example. From January to September 2020, China's pig feed
production was 58.48 million tons; The production of egg feed was 25.81 million tons; Meat and poultry feed
output was 69.48 million tons; Aquatic feed output was 17.27 million tons; Ruminant feed production of 8.9
million tons; The production of pet feed is 580,000 tons; Other feed production was 2.04 million tons.
Take the chickens as another example. Here are some facts for chickens as a major
need of poultry.
1.Global Perspective
In recent years, the world chicken market has been growing steadily, and the proportion of chicken in the international meat consumers has been gradually increasing. The increasing consumption of chicken has stimulated the world's The poultry (mainly broiler chickens) production in the world's 8 main countries with the largest accounts for 72% of the world. The world's leading chicken exporters are the United States, The United Kingdom, Brazil, the Netherlands, Thailand and China.
In recent years, the world chicken market has been growing steadily, and the proportion of chicken in the international meat consumers has been gradually increasing. The increasing consumption of chicken has stimulated the world's The poultry (mainly broiler chickens) production in the world's 8 main countries with the largest accounts for 72% of the world. The world's leading chicken exporters are the United States, The United Kingdom, Brazil, the Netherlands, Thailand and China.
2.Domestic Perspective
Chicken has become one of the leading meat products consumed by China. Sina Finance
research results show that white meat stands for China’s future inevitable consumption choice tendency. In
China, the proportion of broiler production in total meat production increased from 6.63% in 1984 to 13.11%
in 2005, which nearly doubled, while the proportion of pork production decreased from 82.69% in 1984 to 671%
in 2005.
Also, for poultry raisers, there are different feeding strategies.tailored to
different age groups of chickens, which is a main factor for the need of new type of feeds. The less
nutritious the feed, the more competitive the pressure of the flock faces, and the worse the uniformity of
the flock. Poultry raisers when choosing feed, especially for young chicks, usually prioritize quality
first.
During the “13th Five-Year Plan for Economic and Social Development” (2016-2020),
Large feed enterprises accelerated the merger and reorganization of small and medium-sized enterprises. Thus
more and more large enterprises aim at integrating the entire industrial chain, ranging from raw materials -
feed - breeding - meat - cooked products. In recent years, the feed industry in southeast Asia, Northeast
Asia, Africa and other emerging markets has developed rapidly, and large domestic feed enterprises will
improve the progress of globalization layout as soon as possible. In the future, China's feed output will
keep a low growth rate, and the growth rate will gradually slow down. In 2019, China's feed output will
reach 3 million tons, and in 2023, it will reach 325 million tons.
The market capacity of feed industry in China is huge, but the volume of high
quality feed needs
development.
At the same time, the growing demand for protein-containing products has driven the
growth of the chicken
feed market. Global chicken production will reach 103.5 million tons in 2020, reflecting growing demand.
Marketing Analysis
At present, the industry scale of China's poultry market is mostly small and
medium-sized, and there is a lack of large and professional poultry farms. The poultry industry in most
developed countries is mostly large-scale professional farms.
In recent years, China's poultry industry occupies an important position in China's
breeding production, and has become the main pillar industry of China's rural economy. The poultry industry
is further expanding, the poultry stock has increased significantly, and even poultry meat has replaced beef
as the second largest meat consumption in the world. At the same time, the demand for poultry feed is also
increasing, but the breeding scale is still maintained at the level of small and medium-sized.
In the conversation with experts, it will take a long time for the progress and
change of China's poultry industry. There are some common problems in current producers of domestic poultry
industry, ranging from corporate culture, to corporate governance, to production technology, and to
employees’ limited literacy. To solve these problems, a systematic set of plans should be enforced. We want
to start from technological perspective, that is, invention of new feed additives for poultry.
In our online survey, we found that:
1. 63% of the respondents (Poultry Feed producers) believe that the rising prices of feed additives and trace elements will become the third challenge they face, which is closely related to the supply chain risk (60%), which is also one of the four major problems they face Market analysis should be quoted to highlight competitive advantages. If we can greatly reduce costs, we can easily win the market
2. Feed industry is not only an important part of the production system of agriculture, but also one of the important symbols to measure the level of agriculture modernization.
1. 63% of the respondents (Poultry Feed producers) believe that the rising prices of feed additives and trace elements will become the third challenge they face, which is closely related to the supply chain risk (60%), which is also one of the four major problems they face Market analysis should be quoted to highlight competitive advantages. If we can greatly reduce costs, we can easily win the market
2. Feed industry is not only an important part of the production system of agriculture, but also one of the important symbols to measure the level of agriculture modernization.
According to our research, the main problems existing in the feed industry are:
prominent contradiction between supply and demand of protein raw materials, imperfect law enforcement and
supervision system for raw materials, feed quality and safety problems, small scale of feed enterprises,
etc.
Future development prospects:
For domestic feed producers, it is essential for them to focus on technological
progress in current background of economic globalization. If domestic feed producers gain an competitive
edge in production concepts and technology in reality compared with their counterparts in the international
market, they will gradually be able to occupy more market shares in the global market.
On the basis of the above argument, we will try to make a contribution to the feed industry from the
technological perspective.
Product Analysis
Market: Feed Market
Demand and Supply of Feed at Global Level
Since the industrialization of feed, the global feed production has entered a new stage, and the global feed output continues to climb. According to Alltech's global feed survey, from 2016 to 2020, global feed production increased year by year. In 2020, despite the impact of the epidemic, global feed production still increased by 1% to 1.188 billion tons. However, while global feed production is growing, global feed mills are shrinking. According to the Alltech survey results, in 2016, there were about 30090 feed mills in the world, and by 2020, there were only 28,414 feed mills. In just a few years, nearly 2,000 feed mills were closed. The production capacity of feed plant is constantly improving.1
Demand and Supply of Feed at Global Level
Since the industrialization of feed, the global feed production has entered a new stage, and the global feed output continues to climb. According to Alltech's global feed survey, from 2016 to 2020, global feed production increased year by year. In 2020, despite the impact of the epidemic, global feed production still increased by 1% to 1.188 billion tons. However, while global feed production is growing, global feed mills are shrinking. According to the Alltech survey results, in 2016, there were about 30090 feed mills in the world, and by 2020, there were only 28,414 feed mills. In just a few years, nearly 2,000 feed mills were closed. The production capacity of feed plant is constantly improving.1
Competition in Domestic Market
1 https://bg.qianzhan.com/report/detail/300/200810-f44c346e.html
The market capacity of feed industry in China is huge, but the volume of feed for
laying hens is relatively small. At present, there are few domestic feed companies that take laying hens
feed as the main product, and the leading companies in the feed industry are mainly those that produce a
variety of feed and poultry feed with a certain scale, which roughly includes the following two categories.
The first is the international large feed production enterprises, such as the Dutch
Royal DSM Group, cp Group and so on.
The second is large domestic feed production enterprises, such as New Hope, Da Bei
Nong, Hai Da Group, etc. The second category of competitors most of the production of a variety of feed at
the same time, from the point of view of feeding objects, mainly pig feed; From the point of view of feed
variety, mainly to cooperate material. Most of the feed products of these enterprises also include poultry
feed, which is mainly mixed feed for broilers and laying hens, and less premix products for laying hens.
(According to the current degree of market activity, the main brands of layer premix are Hualuo, Taigao,
Owisu, Huanshan, Daweijia, Beinongda, etc.).
SWOT of Our product
Cost Structure
Total cost includes innovation costs, maintenance costs, sale costs.
6.1 innovation cost
Innovation cost includes the following aspects
6.1.1 experimental equipment cost
PCR Machine
Constant temperature shaker
Centrifuge
Ultra slim led illuminator
Water bath
Constant level instrument
6.1.2
DNA polymerase
Nhel
6.1.3 site use fee
6.1.4 cost of labor
6.2 maintenance cost
6.3 sale costs
Sale costs include the following aspects
6.3.1 publicity fare
6.3.2 transportation fee
6.3.3 drinks producing fare
Beverage producing line
Packing expense
6.1 innovation cost
Innovation cost includes the following aspects
6.1.1 experimental equipment cost
PCR Machine
Constant temperature shaker
Centrifuge
Ultra slim led illuminator
Water bath
Constant level instrument
6.1.2
DNA polymerase
Nhel
6.1.3 site use fee
6.1.4 cost of labor
6.2 maintenance cost
6.3 sale costs
Sale costs include the following aspects
6.3.1 publicity fare
6.3.2 transportation fee
6.3.3 drinks producing fare
Beverage producing line
Packing expense
Conclusion
The above analysis indicate that both the domestic and global market of feed
industry are full of potential. Simultaneously, the technological progress will be beneficial for companies
to gain competitive edges in the market. Thus, it is promising for us to dedicate in such an industry.
With the development of animal husbandry, ordinary feed can no longer meet the growth needs of animals. They
not only consume huge costs, but also cannot guarantee that they can be effectively absorbed by animals. The
presence of a complex five sugar alcohol makes many monogastric animals (such as chickens and ducks) unable
to fully digest and absorb the nutrients they need, thereby affecting growth. So our team invented an
additive, which may be produced as special beverage for these monogastric animals to degrade arabinoxylan to
improve the absorption and utilization of feed.