CHICKEN AND EGG

A STUDY OF THE POULTRY

GENETICS INDUSTRY

Presented By:
Rohit Malhotra
Rohan Kapoor
Rohan Seth
Saket Anand
Sakshi Gupta
 INTRODUCTION
 Poultryfarming-practice of raising poultry,
chickens, turkeys, ducks, and geese, as a
subcategory of animal husbandry , for the purpose
of farming meat or eggs for food

 More than 50 billion chickens are reared

annualy.Chickens farmed for meat are called
broilers, whilst those farmed for eggs are called
egg-laying hens
UK alone consumes - 29 million eggs per
day
Some hens can produce over 300 eggs a
year, Chickens will naturally live for 6 or
more years
Majority of poultry are raised using
intensive farming techniques
74% world's poultry meat, and 68% eggs
are produced this way (acc.to World
Watch Institute)
 Range Farming – Alternative to Intensive
farming techniques
 Commercial Production Today
 85% of eggs are produced by 2,000 large companies
 20,000 growers provide 18% of production

WORLDS CHICKEN POPULATION

 China (3,860,000,000)
 United States (1,970,000,000)
 Indonesia (1,200,000,000)
 Brazil (1,100,000,000)
 Mexico (540,000,000)
 India (425,000,000)
 Russia (340,000,000)
 Japan (286,000,000)
 Iran (280,000,000)
 Turkey (250,000,000)
 Nigeria (740,000,000)
HISTORY and INDUSTRY
Beginnings – 1920’S
Henry A. Ullman began genetic
experimentation
Pigeons, ducks, and geese were bred in China
more than 3,000 years ago
16th century - chickens were introduced
into America from Europe, and turkeys were
introduced into Europe from America
After cockfighting was outlawed in the
United States, Canada, and Great Britain in
the 19th century - poultry fanciers raised
chickens for exhibition purposes
 Method of hatching poultry was not used on a
commercial scale until the 1870's
 First college department of poultry husbandry - 1901
at the University of Connecticut.
 Discoveries and inventions relating to the scientific
housing, feeding, and breeding of poultry - rapid
expansion of the industry after the 1930's
 Production and consumption of poultry products
increased markedly during World War II when meat
from other livestock was scarce
 Since 1945 - improved methods of storing and
distributing poultry meat and eggs have helped
stimulate consumption of these foods
 Expansion in specialization in raising broilers
 TOP US EGG COMPANIES

COMPANY BIRDS IN LAY (IN MILLOINS)

Cal-Marine Foods 23.8
Rose Acers Farms 17.5
Moark LLC 14.2
Micheal Foods 14.0
Sparboe 12.5
Wright County Egg Production 9.0
Ohio Fresh Eggs 8.0
Golden Oval Eggs 7.4
FORT Recovery Equity 7.0
ISE America 6.9
 STRATEGIC DIVERGENCE
 Law bought the company back to its core business of
genetics
 Changed the distribution system to sell at a high volume
 Developed a long term approach to planning - Five year
strategic plans and Ten year strategic plan for R & D
 Emphasized market dominance, employee and consumer
satisfaction
 Tightened and streamlined the entire structure of the
company
 Empowered his managers and gave them generous
bonuses
 Trained his team to not only have technical knowledge but
also the ability to communicate it to the customers
 Created a free-wheeling culture at Ullmans which
eventually turned it into a global giant
 INTERNATIONAL EXPANTION
ULLMAN greatly expanded its international operations with revenue from
overseas accounting for more than two-thirds of total revenue
Italy was the choice for the company's first overseas hatchery
Enabled Ullman to move closer to the growing markets of Europe middle east
and north Africa
First FDI – Mexico,1992
25 % stake in a joint venture with a group of Mexican egg producers
Ullman de Mexico gained the number-one spot in the Mexican market,
selling more baby chicks than any competitor
In China, Ullman ran a state - of the art hatchery
In Japan - 30 associated hatcheries nationwide and holds about 70% of the
market
2000 - acquired majority ownership of the co. one third revenue
Ullman argentine completed in October 2000, facilities included a
grandparent farm, a parent farm, a parent hatchery and a commercial hatchery
Ullman Africa had been in operations from 17 years,acquired all outstanding
shares
In Russia expected to double market share each year for the next three years
result entered in 2003 and opened marketing office in 2004
 INDUSTRY CONSOLIDATION
 Egg layer industry was dominated by three major players
 Largest - Opsal group., controlled 50% of the world's primary breeding
 Second - Hendrix Poultry breeder (major competitor)
 Third - Hubbard ISA
 In this competitive environment Ullman's advantage rested in three principles:
- Aggressive Research
- production infrastructure that consistently converted R&D
into reality
- Good technical support
 Only layer - breeding company in the world to have its own molecular biology
laboratory
 R&D budget - $5.5 or 2.6 %of revenue
 great emphasis - selecting, supporting and nurturing its worldwide network of
distributors
 provided distributors an adequate production infrastructure since poor -
quality handling and care could severely dilute the value of genetic research
 distributors quality and their production facilities were inspected by Ullman's
own technical service department
 technical support - vital component backed by team of professional
veterinarians, pathologists, nutritionists, microbiologist and poultry husbandry
specialists - assisted customers in solving problems
 KEYS TO GROWTH
 Commercial day old chicks sold
 High transportation cost, parent stock – most
economical
 After WW II – freely sold grandparents and
parents stocks
 Became more vertically integrated

PROFIT MAXIMIZATION THROUGH VERTICAL INTEGRATION

SALES UNIT INDIVIDUAL PRODUCTION PROFIT FROM
SELLING PRICE COST ONE
GRANDPARENT

One Grandparent $ 50 $ 10 $ 40

45 Parents $ 40 $6 $ 180 (45 x 4)

4500 Commercial $ 0.40 $ 0.30 S450 (4500 x .10)

ULLMAN’S ACCELERATING GROWTH, 1975 – 2005
YEAR ANNUAL REVENUE (IN
MILLIONS)
1975 8
1985 17
1995 51
2005 200

FUTURE CHALLENGES
Animal rights movements
Threat of marketing complacency
 CONCLUSION
Law consolidated Ullman’s market share
and produced a steady revenue stream
He convinced the European’s to have a
hands off approach to management
despite the price competition increasing
and the world market showing a growth of
less than 3% per year
His strategic decisions were responsible
for the rapid growth of the company
THANK YOU