Assignment on BAY Agro Industries Ltd

BAY Agro Industries Ltd:

From a modest beginning in 1998, it has grown into the largest producer of broiler and layer day-old chicks in Bangladesh. They are also the largest producer of poultry feed in Bangladesh. In Bangladesh, they are the franchisee of Cobb-Van tress of the United States of America for the Cobb 500 broiler, considered to be the best in the world. Hy-line, the oldest poultry breeding company of the world and Cargill, the American feed producer, are the other strategic partners of the BAY Agro Industries Ltd. Group.

BAY Agro Industries Ltd. now operates 2 grand parent farms, 3 parent growing farms, 8 parent production farms, 7 hatcheries and two pellet feed mills. Their present production capacity is 1.8 million day-old chicks per week. About 35% of all chicks sold in Bangladesh come from BAY Agro Industries Ltd. BAY Agro Industries Ltd. has begun exports to the Middle-East and Nepal, and is managing the operations of a broiler breeding farm in the Sultanate of Oman.

Vision:

To be one of the best managed commercial organization in Bangladesh in terms of quality, technology, innovation, operational excellence and growth and produce day-old-chicks of the highest international standards.

Mission:

Our mission is to produce best quality day- old-chicks of the country, compatible with international standards.

Production:

They mainly produced – 1. Chicks 2. Feed 3. Broilers

  Producing Feed

Since starting trial production in January 2000, BAY Agro Industries Ltd.’ centrally located poultry feed mill in Gajaria, Munshiganj has become established as the leader amongst local producers. BAY Agro Industries Ltd.’ goal is to provide international quality feed at an affordable price.

In order to ensure feed quality, BAY Agro Industries Ltd. gets technical assistance for the running of the mill from Cargill, USA. Cargill is the world largest producer of animal feed and runs feed mills in 70 countries. All of the BAY Agro Industries Ltd.’ feed formulations are provided by Cargill, ensuring the international quality of the products.

With a total production capacity of 40 metric tons per hour, BAY Agro Industries Ltd.’ Gajaria plant is the largest in Bangladesh.

Four silos, each of 5,000 ton capacity, are now under construction. A jetty and equipment to unload vessels will be added soon.

Exports:

BAY Agro Industries Ltd. is the first Bangladeshi company to start exporting parent stock chicks, hatching eggs and day old broiler chicks. They are exporting to Saudi Arabia, Oman and Nepal. They are now increasing their production in order to increase the export volumes substantially as the Cobb 500 breed is extremely popular in these markets. BAY Agro Industries Ltd. export high quality products at reasonable prices.

Bangladesh is completely free from highly pathogenic and low pathogenic avian influenza. It is completely safe to import chicks and hatching eggs from Bangladesh. Avian Influenza-free certificates from the department of the livestock service of the Government of Bangladesh can be provided with each export shipment.

The Industry Life Cycle:

The industry life cycle model consists of-

(1) An embryonic industry environment

(2) A growth industry environment

(3) A shakeout environment

(4) A mature environment

(5) A declining industry environment

BAY Agro Industries Ltd. is in the Growth Stage of the Industry Life Cycle.

SWOT Analysis of BAY AGRO INDUSTRIES LTD.:

Strengths:

       I.            Accountable Corporate Governance:
Good Corporate Governance is an issue of vital importance to the Board and Management of BAY Agro Industries Ltd. Group. BAY Agro Industries Ltd. Group’s board has a formal schedule of matters especially reserved for its decision including corporate strategy, approval of budgets and balance sheet, annual financial results. The Board of Directors, as the apex level of authority, is responsible and accountable for the overall direction and is ultimately answerable to regulatory authorities and shareholders for the activities, strategies and performance of the company.
       I.            Experienced Senior Management:
The senior management of the company is responsible for promoting the highest level of business ethics and integrity. Their aim is to create and foster a culture throughout the company that emphasizes and demonstrates the importance of maintaining high business ethics and close relationship with customers.
    II.            Quality Customer service:
Customers are the focal point of all the company’s activities. BAY Agro Industries Ltd. Group is committed to its customers for excellent, innovative and quality products across all customer segments. The company provides a full range of quality products to small and medium size retailers.
 III.            Training and Development:
The company has a personnel-training institute with good resources. They give regular training to the officer of both middle and lower levels. Again if there is any strategy or technology change, there will be special training program arranged based on individual needs.
 Weaknesses:       I.            No feedback from bottom level employees:
The bottom-level employees and even the mid-level managers at the company don’t take part in the decision-making process. So the information flow is mostly one way. Though the company has some unofficial way to collect information from the bottom level employees, but it is not effective at all.
    II.            Less emphasis on advertising through the electronic media:
BAY Agro Industries Ltd. does not promote their brand or products on a regular basis. They seem to be over confident over their company’s publicity. They some times see it as an extra expenditure. They also don’t do much electronic media advertising. This is a big weakness for BAY Agro Industries Ltd., which may prove to be very big mistake in the future. The company should concentrate more on its promotional activities.

Opportunities

1. Using Good market image:

BAY Agro Industries Ltd. Group has quite a strong market image. Local people know BAY Agro Industries Ltd. Group as a center of trust and professional where local expertise use to serve. If they expand their business and utilize this strength as more diversified business opportunities, they can create stronger image in the country.

1. Expanding the business area:

BAY Agro Industries Ltd. could also boost the number of production facilities to take advantage of increase demand among the existing customer with better products and thus generate more net profit.

1. Government’s changing attitude towards Private Sector Development:

The government is favoring private sector investment, which is good for BAY Agro Industries Ltd., as they can now expand their business with the favoring rules and regulations of Government of Bangladesh. This kind of government support will lessen their problems. As BAY Agro Industries Ltd. is a local private manufacturer it holds more diversified opportunities to do business on their own interest. They always can expect feedback from government.  The tax incentives are also high for Poultry industry in Bangladesh which creates a very favorable condition for conducting business in the country.

Threats:

1. Fierce Competition:

As the Poultry industry of Bangladesh has promising prospects in, BAY Agro Industries Ltd. is facing strong competition the entrance of new potential competitors. Also foreign competitors operations in Bangladesh are also taking a big portion of market share. These foreign competitors have successfully created better market image than those of local manufacturers in Bangladesh.

PEST Analysis:

Political and Legal Environment:

The political environment of Bangladesh is quite unstable and it affects the Industry from performing efficiently.  In Bangladesh where the political environment is absolutely unpredictable the external forces constantly keep on changing. For instance, a sudden call of Hartal or strike might end up with the cancellation of the events. Thus, there is an enormous possibility of incurring a huge loss.

Economical Environment:

The immediate challenges for the economy will be a weaker external environment (the EU and US are Bangladesh’s biggest export destinations). This will take its toll on ready-made garment exports (which comprise around 75% of total exports). Although the economy will benefit from lower commodity (especially oil) prices, the government’s high borrowing costs to finance the budget deficit could limit the scope for a sharp fall in inflation.

Social Environment:

Bangladesh is a developing country. The national economy has been gaining momentum recently.  The national unemployment rate has been hovering at a relatively low level for two years. On the divisional level, especially Dhaka and Chittagong continue to experience rapid expansion and prosperity.  As these regions accept many newcomers from the rust belt and other areas, it has become more business focused.  Business is booming in the grass root level.  The annual growth rates of new small businesses are soaring.  Many businesses continue to expand in the countryside.

Technological Environment:

Since internet connectivity reached Bangladesh in 1997, people in Bangladesh have been able to open their doors to the outside world more than before.  Then companies within Bangladesh became ISPs, thus paving the way for companies with in Bangladesh to eventually have a web site of their own.  This means greater market penetration for Bengali business people. A major proportion of Bangladesh is having access to the Internet. Business organizations are increasingly adapting to the use of Internet than other time consuming modes of communication.