Lessons learnt from COVID-19 for the feed industry: Experiences from a feed equipment supplier
Stabilising agri-food production and guaranteeing food supply are all the more necessary in the face of risks and challenges. However, how did the manufacturing sector cope with challenges coming from downstream - from consumers, via food suppliers, to farmers and feed mills - during the recent crisis surrounding the lockdown of 8.4 million people in Wuhan City in Hubei Province in China? Milling and Grain asked Famsun's General Manager Liu Guangdao how his company responded to the crisis.
During the COVID-19 outbreak, China's central and local governments gave 'great priority' to the supply of food, vegetables, medicines and other necessities, including transportation, with the utilities sectors and supermarkets being asked to resume their operations during the Spring Festival holidays, says Mr Liu.
'In a joint statement, the Agriculture Ministry and Transport Ministry called on local authorities to give permission for the production and transportation of feed and agriculture products, as well as offer financial support for these companies - such as tax rebates and low interest rates.
'Residents were, after taking strict epidemic prevention and control measures, able to purchase fresh vegetables, meat, food and other necessities from supermarkets. Online purchasing has also become popular. Most supermarkets provided zero-touch online platforms and delivery service for households.'
Adopting strict prevention measures
However, there has been temporary supply disruptions in Hubei Province, the centre of the coronavirus outbreak, from the end of January due to transport restrictions imposed to stop the spread of the virus, says Mr Liu.
'Fortunately, the Chinese government reacted quickly and sold 1.32 million tonnes of corn during February 7-11th, 2020 to help 23 feed processing companies located in Hubei Province to maintain raw material supply and resume feed production. The supply to other regions of the country was also adequate and secure.
'Actually, in order to stabilise business and maintain supply, most industries in China, especially the agri-food supply chain, have been trying to resume production in an orderly way since February 10th, 2020 while strictly implementing epidemic prevention and control measures.
'Like Famsun, all companies and businesses that resuming operation in China are still taking strict prevention and control measures to protect their employees and workers, even though the epidemic is gradually slowing down.
'Such measures include regular access control and management, daily disinfection of working areas and personnel protection from mask wearing to hand disinfection and temperature recording.'
Significant impacts for feed
China's food service sector and the travel and tourism industry have been hardest hit by the epidemic. Weak food demand from downstream would be the most significant impact on the China feed industry currently.
'However, quick and effective containment of the virus could lead to a rapid bounce back. For transportation, it will no longer be the main restrictive factor. According to the Transport Ministry the transport logistics and express delivery sectors are expected to return to full capacity by the end of March, except in Hubei Province itself.
And for the future
As the epidemic gradually slows down, the feed milling and animal farming sectors are expected to return to normal production early in Q2, with slow growth rate due to the weak food service sector.
'Industry players, however, are optimistic about the recovery, including the recovery of the swine industry from African Swine Fever (ASF). Many manufacturers plan for capacity expansion with new investments. Famsun, for example, has seen a significant increase in order intake at the end of February in China market.
'From ASF to COVID-19, biological threats are the most deadly challenges we have to face, and these will not be the last biosecurity events. As a technical partner, we suggest that animal farms and feed mills should make corresponding upgrades in their facilities and prepare in advance to avoid potential bio-insecurity risks in future,' adds Mr Liu.