A subsistence level poultry farm grows into big business
In the mid 1970s, the United Nations provided 50 one-day old chicks and a cage each to thousands of individuals in the Punjab. One of the recipients has made such great strides since that his poultry-related businesses paid Rs 2.7 billion in taxes last year.
Dr Muhammad Arshad’s journey to his remarkable success has many lessons for budding entrepreneurs. It can be argued that the opportunity he had was the same as thousands of other individuals. He has attained his current status after working hard and consistently for over four decades. Throughout he has been associated with poultry and poultry feed business.
Arshad worked with dedication. He used his business acumen to complete the poultry business value chain. Besides poultry farms his group of companies now operates two poultry feed units with a combined production capacity of 250 tonnes of feed per hour. The group also operates a solvent-extraction plant that imports soybean seed oil and uses the residue in its poultry feed units.
The conglomerate has also established a state of the art rice mill and is a leading exporter of Basmati rice from Pakistan. Rice is also a component of poultry feed. At one stage, the group also imported breeding farms. However, it abandoned the venture after encountering volatility in the prices of one-day old chicks. It has continued to operate poultry farms.
A veterinary doctor by training, Dr Arshad was a lecturer at the Agriculture University, Faisalabad, when he received his 50 chickens. He raised them on kitchen waste and disposed of those for a small profit. He then bought another batch of 50 one-day old chicks. When they were sold after maturing, he had generated enough money to increase the flock size to 200 birds that he reared on his lawn. He says success came after hard work and careful planning, including manual labour for almost 17 years before settling into comfortable living.
Next, he shifted his chicken farm from his residence to a rented lawn to rear 3,000 birds. He bought the hand-made feed from the market. He operated the farm for about four years, gaining valuable experience in both poultry rearing and producing hand-made poultry feed. He then increased the flock size to 7,000 birds and started making his own poultry feed by mixing wheat, maize and rice. The feed made in-house was cheaper than what was available in the market. Eventually, he started marketing his left over poultry feed to nearby poultry farms.
Being a veterinary doctor gave him an advantage over other poultry farms and he produced the feed for not only his stock but also for other farmers. Selling the poultry feed he produced brought him some extra income. He procured the feed inputs and mixed them all by himself. This made him an expert on poultry feed. He then visited Lahore where a colleague, another veterinary doctor, was raising a flock of 25,000 birds. Arshad’s poultry feed gave better results than the feed he had been using earlier. A few months later, the two friends started a partnership to establish a small poultry feed-producing unit on an unused piece of land next to the poultry farm. The two partners worked throughout the day mixing the feed.
In the evening, they supplied it to poultry farms and feed shops in the region. No labour was hired. Later, some salesmen were engaged. They continued raising chicken besides producing poultry feed. By the time their production reached 35,000 bags a month, they realised that manual mixing would not meet the increasing demand.
They established their first feed mill with mechanical mixers in 1991 on a small field off Riawind Road. Later, they acquired more land and expanded the unit to 200 kanals. The current capacity of their Lahore-based feed mills is 100-tonnes per hour. For quite some time the capacity was enough to meet the growing orders.
The partners soon realised that mill operations would not be sustainable for long due to rapid urbanisation around Lahore. Posh private housing societies were coming up right next. They then established a larger feed mill, with a capacity of 150 tonnes per hour, in Sahiwal. Now they are also relocating the Lahore plant to Sahiwal as the demand for poultry feed is increasing. The company has enough storage capacity to ensure regular supplies during holidays.
Arshad says the journey was not as smooth as it might sound. He says poultry feed is supplied on credit and if an epidemic strikes and destroys the stock, the farmer is in no position to pay his poultry feed dues. Fortunately, he says, modernisation of poultry farming has largely eliminated this threat. Sealed sheds in vogue today do not allow the spread of viral diseases. However, this was not so in the 1980s and ’90s.
He recalls that in 1988 a new viral disease called hydro peri cardium infected the birds. All farms were in the open and no vaccine was available against the Pakistan-specific disease. The veterinary doctors carried out quick research to produce a crude vaccine from the livers of infected chicken. Fortunately, it worked and the disease was controlled. By then a lot of damage was done. The fatality rate at the farms was 60-70 percent. He says the feed payments were delayed and the company suffered badly for almost a whole year. It survived because in those initial years its financial exposure was limited.
Arshad says he cannot imagine success without divine help. While the disease was lethal for the broiler stocks, the layer chickens were immune to it. Fortunately, 70 percent of his poultry feed supplies those days were to the layer farms. The layer breeders supported the company and helped it overcome the financial crisis. The feed producers with greater exposure to the broiler farms were devastated.
“I managed a small chicken farm single-handedly and then produced the poultry feed without any outside help. During the early years the work was backbreaking but it paid off after a few years. I and my partners have gone through all stages: from procurement and production to marketing. We know the problems in the field and how to resolve them. We have groomed our human resources and have given them the independence to work with confidence.”
“We established a solvent extraction plant from where we get the soybean meal for our poultry feed mill. In the process, we extract edible oil which we sell to various brands. The rice mill adds value to the Basmati which we export. The residue is used in poultry feed. We partner with farmers and guide them about better farming practices that increase their productivity and procure the grains directly from them without involving the middleman,” he added.
The writer is a senior economic reporter at The News, Lahore