Bairaha Farms enters export market
Fortune G-P Farms Lanka Ltd., which is an associate company of
Bairaha Farms PLC, entered the export market, with the export of two
consignments of Parent Breeder Chicks to Nepal. The consignments
consisted of 6,000 Parent Chicks valued at Rs 2.5 million.
A single Parent bird has the ability to breed about 130 broiler
chicks during its life span. Local breeding companies require a total
estimated 812,000 birds annually.
Until recently, 85 percent of this requirement was imported, but now
Fortune G-P Farms (Lanka) Ltd. (FGPFL), has the capacity to supply
nearly 50 percent of the local requirement.
The cost of an imported Parent Breeder Chick is around US$4. Valuable
foreign exchange has been saved as a result of Fortune G-P Farms (Lanka)
Ltd., producing and supplying these breeding chicks to the local market
in addition to bringing in foreign exchange through its exports.
Local breeding companies have an edge in buying these breeding chicks
from Sri Lanka since there are cost savings and there is no hassle of
clearing chicks from Customs, in addition to being able to get the
supplies locally with minimum stress for chicks from transportation.
Bairaha is a vertically integrated poultry producer, engaged in all
the aspects of breeding, production and processing with the exception of
An average 1.8 kg broiler in live weight would consume around 3.3 kg
of feed and of this generally around 50 percent is Maize.
The fact that the Government has imposed a 35 percent tax (CESS) on
imported Maize, along with other levies, has made the cost of imported
Maize to increase by nearly Rs. 15/= per kg and this is a heavy burden
on this industry, which is producing an essential food under the
Government controlled price.
Currently, purchasing the locally produced Maize is not a viable
option as the Maize is substandard at times due to poor storage and
The high tax and levies on the imported product have prompted the
middleman to hoard the local produce, which has led to a substantial
increase in the price of locally grown Maize.
Bairaha Group pays nearly Rs.300 million in VAT, NBT and Income Tax
excluding other duties and indirect taxes, in particular tax (CESS) on
Maize and other consumables, which are also substantial in amount.
Bairaha is placed as it were, between a rock and a hard place. On one
hand, although the price of chicken is controlled in Sri Lanka as it is
classified as an essential food due to the meatís nutritional value,
Maize is not price controlled, so the middlemen distributing the local
Maize have a free hand to dictate prices to feed millers.