Despite various crises, corporate companies, including eggs and chickens, are making good profits in the poultry business. Meanwhile, the total retained profits of the top three companies in this sector—Kazi Farms, CP Bangladesh, and Paragon Poultry—have reached nearly BDT 27 billion.
A company's retained earnings are the amount that remains after paying all direct and indirect expenses, income tax, and shareholder dividends from profits. This is also considered the company's investable profit. Even in the current market situation, the poultry sector's three corporate companies further thrive by acquiring substantial retained earnings.
In the country, a handful of companies produce the majority of chicken chicks and poultry feed. They also hold a significant share of the egg and meat markets. In addition to institutional production, these companies utilize many other farms outside the company through contract arrangements. The companies have consistently maintained a degree of confidentiality regarding market size, profits, and various business information. They claim that their combined institutional control over the egg and meat markets does not exceed 15-20 percent. However, industry insiders say that these companies control most of the country's poultry product market, essentially allowing them to dictate the market dynamics.
Corporate entities in the poultry sector have been accused of destabilizing the market at various times. In January of this year, the Bangladesh Competition Commission (BCC) fined Diamond Eggs and CP Bangladesh a total of BDT 35 million for conspiring to inflate egg prices in 2022 artificially. Diamond Eggs was fined BDT 25 million, while CP Bangladesh was fined BDT 10 million.
Among the companies currently considered influential in the poultry market are Kazi Farms Group, Nourish, Paragon, Aftab, Quality, Provita, CP, Diamond Eggs, and Rashik/Jaman Group, among others. Bonik Barta has obtained financial reports from Kazi Farms, CP Bangladesh, and Paragon Poultry. These reports reveal that in the latest accounting year, these three companies collectively sold BDT 90.61 billion worth of poultry products. During this period, their pre-tax profit amounted to BDT 3.66 billion. Additionally, the total retained earnings of these three companies reached BDT 26.91 billion. Notably, for the fiscal year 2022-23, a maximum tax rate of 10 percent was levied on income from poultry sector sales.
The top five companies control 85 percent of the GP stock market for broilers. A few years ago, the Dutch embassy in Dhaka studied corporate control in the country's poultry sector. The report titled "Poultry Sector Study Bangladesh," published based on the research, reveals that Kazi Farms Group holds the most extensive GP stock of broiler chickens raised for meat in the country. They have 49,000 GP broilers across two farms, which account for 34 percent of the broiler GP market. The company operates seven PS farms for broilers and layers, producing one-day-old chicks. Their slaughterhouse can process 10,000 chickens in a single day. They operate a total of 13 hatcheries and have two feed mills.
Kazi Farms Limited recorded total sales of BDT 39.38 billion from July 2022 to June 2023. The company achieved a pre-tax profit of BDT 1.75 billion during this period. As of June 30 of the previous year, the company's total retained earnings stood at BDT 16.86 billion.
When asked about this, Kazi Farms Group Director Kazi Zeeshan Hasan told Bonik Barta, "The profit that has come in return for significant investments in the poultry sector can be considered negligible. Additionally, all retained earnings have been reinvested in the poultry sector."
Thailand-based multinational CP Bangladesh Company Limited entered the country's poultry sector in 1998. The company produces chicken chicks, poultry feed, and eggs and is also involved in the poultry-based fast food business. From January to December 2023, the company's total sales in the poultry sector amounted to BDT 43.53 billion. The company achieved a pre-tax profit of BDT 1.53 billion during this period. As of December 31 of the previous year, CP Bangladesh's retained earnings stood at BDT 6.78 billion.
When asked, CP Bangladesh's General Manager, Dr. Md. Akram Hossain, told Bonik Barta, "Currently, there is instability in the egg market due to production being lower than demand. The number of layer chickens has been low in the country for a long time. As a result, egg production is falling short of demand. The recent floods have further reduced the number of layer chickens, leading to an even greater decline in egg production. According to our calculations, we produce approximately 5 to 8 million fewer eggs daily compared to demand. The shortage of layer chickens cannot be quickly resolved, whereas the deficit of broiler chickens can be addressed within six months. Currently, broiler chicken production is nearly in line with demand. While companies have incurred significant losses in chick production, poultry feed, and eggs are sold at a profit. Since May 19, 2023, CP Bangladesh has not been engaged in commercial egg production. Corporate companies control about 15-20 percent of the poultry sector market. Small farmers control a large part of the market. Due to middlemen, the market price often experiences instability. The retail prices at which eggs are sold can be considered unreasonable."
A significant player in the country's poultry business is Paragon Poultry Limited, a company under the Paragon Group. Additionally, the group owns three other companies: Denm Poultry Complex (Private) Limited, Rangpur Poultry (Private) Limited, and Usha Poultry Limited. From July 2022 to June 2023, Paragon Poultry Limited recorded total sales of BDT 7.7billion. The company achieved a pre-tax profit of BDT 380 million during this period. As of June 30 of the previous year, the company's retained earnings stood at BDT 3.27 billion. Efforts to reach Paragon Group's Chief Financial Officer (CFO) Aminul Islam for comments were unsuccessful.
When asked about the recent rise in chicken and egg prices in the country, Mahbubur Rahman, President of the Breeders Association of Bangladesh, told Bonik Barta, "While broiler chicken production remains stable, egg production has decreased compared to demand. This is due to the extreme heat from June to August, which led to the death of many chickens and reduced egg production due to illness. Additionally, some farms were damaged by floods in several districts, resulting in a decrease of 5 to 6 million eggs in production. Another factor is that the late arrival of certain vegetables in the market has increased the demand for eggs. Companies are selling at the government-specified prices and are still making a profit. However, middlemen are taking advantage of the higher prices. There is no opportunity to hoard eggs in the country and create an artificial shortage in the market."
According to statistics from the Department of Livestock, chicken production in the country for the fiscal year 2023-24 is 327.7 million. During this period, 23.75 billion eggs were produced, resulting in an annual per capita egg consumption of 135. However, stakeholders have questioned the government's statistics on the poultry sector, stating that the actual production is lower than reported. In light of the recent rise in egg prices, the government has also approved the import of eggs, but this has not helped control the prices. Most recently, the government held a meeting with egg producers and suppliers to set the price of eggs. As a result, the selling prices have been set at BDT 10.91 at the production level, BDT 11.01 wholesale, and BDT 11.87 retail. Additionally, to reduce the influence of intermediaries, it was decided in yesterday's meeting that large companies and small farmers will supply eggs directly to wholesale markets at government-specified prices.
The districts producing the most eggs in the country include Kishoreganj, Mymensingh, Rajshahi, Tangail, Barisal, Bhola, Cumilla, and Feni. Kishoreganj produces over 2.3 million eggs daily, supported by 1,390 layer farms. District Livestock Officer Dr. Subhash Chandra Pandit noted that the daily demand for eggs in Kishoreganj is 1.7 million, with the surplus being supplied to other districts.
According to sources from the District Livestock Department, 972 layer farms in Mymensingh produce 2,186,944 eggs daily. As District Livestock Officer Dr. Wahidul Alam stated, the local demand is met, and surplus eggs are sent to Dhaka and other districts.
According to the Rajshahi Livestock Department, 1,286 layer farms in the district produce over 1,826,000 eggs daily, amounting to approximately 54.8 million eggs monthly. Of this, 48 million are supplied to the local market each month, while the remaining 6.8 million are distributed to other parts of the country.
In Barisal district, there are currently 194 layer farms producing eggs. According to the District Livestock Office, these farms produce an average of over 940,000 eggs daily, with nearly 200,000 eggs produced more than local demand. When asked about the reasons for the rising prices despite the high production, Barisal District Livestock Officer Dr. Mohammad Mostafizur Rahman stated, "The current market situation is primarily due to middlemen."
In Feni, recent floods have disrupted egg production. Feni District Poultry Industries Association's convener, Faiz Ahmed, reported that before the recent devastating flood, more than 600,000 eggs were produced daily in Feni. However, the sudden and severe flooding submerged almost all the farms in the district, severely impacting chicken and egg production. Although some farms have resumed production after the floods, they produce fewer than 300,000 eggs. In the past, the eggs produced in Feni met local demand and were sent to various districts across the country, but now it is challenging to meet even the local demand.