1.

Introduction
Poultry (Broiler) firm is a growing industry in Bangladesh. But the real scenario in Barisal is
not satisfactory. Because most of the retailers and wholesalers have to import from Jessore or
Khulna or Satkhira. There were about 5500 poultry firms in Barisal in 2007 but now most of
them have closed down because of unskilled labor and proper guide lines. However, they
follow a supply chain to deliver their products from supplier to consumer. Lower income
people can fill the need of nutrition because its price is relatively lower than other meat.
We visited some firms and retail stores like Janata trading at Rupatoli, Mamun poultry firm at
Rupatoli,Baishakhi poultry firm at Bazar road, Sugandha poultry house at Natun Bazar etc. to
find out the supply chain process and gap of price among different supply chain level in
poultry firm in Barisal. We try to incorporate all of this in our assignment.

2. What is Supply Chain?

A supply chain is a system of organizations, people, and activities, information and resources
involved in moving a product from supplier to customer.
Supply chain activities transform natural resources, raw materials and component into a
finished product that is delivered to the end customer.

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3. Supply Chain Stage of Poultry Firm in Barisal City:

The poultry firms in Barisal city maintain the following stages:

Supplier (chicks, vaccine ,feed & other medicines)

Farmer/ Manufacturer
Wholesaler
Retailer
Customer

Figure: Supply Chain Stages of Broiler.

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4. The Closer View of Each Stages of Supply Chain of Poultry (Broiler)

Industry in Terms of Barisal City:

Supplier (1): Suppliers are those who produce the chicks in their own firm and also
manufacture food of chicks, necessary medicine. But in Barisal there is no such type of
suppliers. In Bangladesh there are some renowned companies like Aftab, Kazi who produces
chicks and they also manufacture food and necessary vaccine for poultry chicks. Beside this
some other company also manufacture food such Agata Feed Mills ltd. They usually sell
their products to the local suppliers.
**Note: Supplier (1) is not in Barisal city. So we start our supply chain stage of poultry
business in Barisal from supplier.

4.1 Supplier:
Actually these suppliers are the main suppliers in Barisal city. Because they purchase chicks
and other necessaries from supplier (1) and sell these directly to the manufacturers or
farmers. Actually they purchase chicks and other necessaries in a large lot and break these
down in smaller quantities and sell them to the farmers. They often provide vaccination
facility. Sometimes they provide necessary instructions about how to grow up, or how to take
care of broiler chicks. They provide these chicks to the farmer within one day.

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4.2 Farmer/Manufacturer:
Manufacturer buys chicks from different supplier and
grows them in their own facility.

They usually

nurture the chicks about 30-35 days. They play the

major role in the supply chain of poultry. Because
they collects the chicks and take care of them up to
sale. They bear the high risk of poultry firm. After
30-35 days each chicks become 1.5 to 1.8 kg. Then it
would be sellable.
When we observe the poultry firm, the owner of the
firm has given us

about various necessary

information like how they grow up the chicks, how

many days they nurture the chicks, how much expenditure is needed to grow up their
products. On the basis of their information we try to calculate their earnings for one piece of
broiler.

Description
Purchasing price (40*1)
Associated cost (130*1)
Total cost
Selling price(127*1*1.5)
Profit

TK
40/=
130/=
170/=
190/=
20/=

Source: Janata Trading, Rupatoli, Barisal.

Owned by Reza Morshed Karim
CN: 01718975347
**Note: Here we calculate associated cost by adding the cost of transportation, feeding cost,
medicine cost and Labor cost. And we calculate the selling price by assuming that each
broiler is 1.5 kg and their selling price is 127 taka per kg.

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4.3 Wholesaler:
Wholesalers are the person who buy the product in a large quantity and sell them to the
retailer. In Barisal city they play a limited role in poultry industry, because most of the
retailers buy the product directly from the local producers as well as from the producers
outside the city. In Barisal city ther are three or four existing wholesalers like Sugandha
Poultry, Dipu Poultry and Chicks, Mollik Poultry and Baishakhi Poultry. They usually
purchase Broiler from Jessore, Khulna, Satkhira, Jhenaidah and from some other local
producers. Though they are wholesaler, their main target is to directly sell to the consumers as
a retailer. As they purchase mostly from the other city like Jessore, we calculate the profit by
deducting the cost of transportation, labor cost, feeding cost, weight fail cost, mortality cost
from the selling price.
We calculate their profit two different ways.
a. When they act as retailer :

Description

TK

Purchasing price (127*1*1.5)

Associated cost (10*1)
Total cost
Selling price(145*1*1.5)
Profit

190/=
10/=
200/=
217/=
17/=

**Note: Associated cost include transportation cost, labor cost, feeding cost and risk
management cost (wait fail cost). We assume that the weight of each broiler is 1.5 kilogram.
The market price of 1 kg poultry is 145 Tk on 07.03.2015.

b. When they act as a wholesaler:

Description
Purchasing price (127*1*1.5)
Associated cost (10*1)
Total cost
Selling price(142*1*1.5)
Profit

TK
190/=
10/=
200/=
213/=
13/=

**Note: We assume that the weight of each broiler is 1.5 kilogram. The market price of
wholesaling of 1 kg poultry is 142 Tk on 07.03.2015.
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Sometimes they purchase broiler from local manufacturer when the Demand of poultry is so
high. But their maximum product comes from outside the Barisal region.

Source : Sugandha Poultry, Natun Bazar, Barisal.

CN: 01719584683.

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4.4 Retailer:
Retailers are the marketing intermediaries who purchase products from wholesaler sometimes
directly from the producer and sell them to the consumer. Most of the retailer of poultry
(Broiler) firm in Barisal City purchase their products from the wholesalers and local
producers. In Barisal city there are many retailers like Sanjida Poultry firm, Mamun Poultry
firm, Unity Poultry firm etc. Actually they purchase poultry from the local farmers and
wholesalers and carry them in their retail store at own cost, and store them in their own
facility and finally they sell them to the consumer. If a retailer buys 100 pieces Broiler it takes
maximum 2 days to sell.

These are some retail stores in Barisal city

Price of Poultry (Broiler) at different local market in Barisal city:

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Name of Market
Hatem Ali Chowmatha Bazar
Natun Bazar
Rupatoli Bazar
Bangla Bazar
Battala Bazar
Launch ghat Bazar

Price(taka per kg.)

140
145
150
150
145
140

Why price vary from market to market?

When we observe different market place in Barisal city we have seen that the price of Broiler
is different from one market to another market. We have identified some reason behind this
price variation those are given below:

Transportation Cost
Variation of Purchasing Price
Market Position
Demand of Products.

4.5 Customer:

A customer is a person who purchases products for their own consumption. By passing every
stage finally the broiler reaches the customer hand. They purchase this broiler at different
price because the price varies from market to market. Like the price per kg. Broiler at Hatem
Ali Chowmatha Bazar is 140 taka and at Notun Bazar is 145 taka.

5. Why Wholesaler Charges High Price?

Wholesaler charge high price because of the following reasons:
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Transportation Cost: Most of the manufacturer firms are out of the Barisal city for
that reasons transportation cost is high for wholesaler; like Jessore, Satkhira, Magura
and other places. Beside this poultry chickens are very easily attacked by many
diseases. So they cannot store them for long time. Thus the transportation cost

increases.
Facility Cost: Maximum wholesalers are in the city. For that reason wholesaler have to
provide high store rent, equipment cost. Besides they have to keep the chicken for some

days as 2/3 days. Thats why the cost of facility increases.

Feeding Cost: As wholesaler has to keep chicken for some days, they have to pay

additional cost for feeding their chicken.

Labor Cost: To bring from manufacturer and to sell the chicken to the retailer and
customer so they have to hire labor. For that reason wholesaler have to pay labor cost.
Wholesaler pays labor cost thats why total cost of them increases. Therefore, they

charge high price to the chickens.

Electricity Cost: For maintaining the chicken wholesalers use electricity. Though

wholesalers use less amount of electricity it increases the total cost of wholesalers.
Profit Maximization: The main purpose of the wholesaler is to maximize profit. So

they try to charge price as high as possible.

Excessive Demand for Broiler: Nowadays the demand for broiler is increasing rapidly

in Barisal city.
Near Monopoly Condition: In Barisal city there are maximum 4/5 wholesaler exist.
But they are not in same market. So they can control the particular market where their
store is. For this reason they have a scope to charge high price.

6. Risks Associated With The Wholesaler:

Death of Chicken: The death rate of broiler chicken is higher in comparison to other
chicken in the market. Sometimes the wholesalers have to face loses for unusual death of

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their chickens. So the death of chicken increases the risk of the wholesalers. Because the
location of manufacturer plant in Barisal is so far from the wholesaler store. As the
wholesaler in Barisal city transport their chicken from different location like Sawrupkathi,
Gournadi ; chicken may die at the time of transportation because of aggregate chicken in
a carrier. Broiler chicken cannot tolerate high temperature and too low temperature. So
they can die when they are transported from firm to retail store in case of high and low

temperature.
Diseases: The Boiler chicken often affected by various diseases like chicken pox. For
various diseases poultry industry is in very much risk. So wholesaler have to invest
additional money to decrease the diseases rate .For that reason their total cost increases.

So the risk also increases.

Demand Fluctuation: Sometimes the fluctuation of demand increases the risk of
wholesaler in Barisal city. For many diseases like Bird-flu the demand may decrease. As
the per capita income of the people in Barisal city increases day by day, they want to

afford meat. It increases the risk of the wholesaler.

Political Instability: The current situation of politics in our country also affects the
increase of price of broiler in Barisal city. From the beginning of the supply chain it
affects the total price because supplier cannot supply chicks to the manufacturer in time
due to strike, blockade and other political instabilities. As a result the normal flow of the
supply chain is breaking down. It creates the demand and supply gap and also increases
the price of chicken in Barisal city.

7. Gap Between Manufacturer, Wholesaler and Retailer:

When we observe the supply chain stages of broiler in Barisal city we have seen that there is
a gap of price between different stages. The main reason of this gap is associated cost and

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risk of each stage. By observing the different stages we try to find out how much the gap and
what is the reason behind this. Now we show these gap by the following Figure.

Gap (Tk.)
16
14
12

Gap (Tk.)

10
8
6
4
2
0

Figure: Price Gap between Manufacturer, Wholesaler and Retailer.

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8. How Customer Can Be Benefited:

Convenience: customer can easily purchase broiler from the retail store because most

of the retail store are located at a convenience place in Barisal city.

Time: Barisal city is not so much large. There are many local market like Notun
Bazar, Hatem Aki Chowmatha, Battala Bazar ,Port Road etc. and most of the market
has poultry retail store. As customers easily purchase from the retail stores they have

to pay less time .

Availability: As retail stores are available in Barisal City with appropriate supply of

poultry, customer can purchase when it is necessary.

Low Price: price of broiler is relatively lower than other meats.
Low Transportation Cost: As customer can purchase from the retail stores, they do
not need to go to manufacturer or producer that maximize their cost at receiving the
product. So it reduces transportation cost.

9. Recommendation:

There is no association of the retailer and wholesaler. They can improve their sales as

well as profit by forming associations.

Most of the producers are low skilled. They can take training on broiler cultivation.
Should encourage young generations for the cultivation of broiler.
Should establish the broiler retail stores in a separate area because it produces bad

smell.
They can properly manage their wastage.
They can reduce the price gap by mutual agreement or by forming an association.

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10. Conclusion:
By observing the market of poultry chicken in Barisal we can say that the real scenario is not
satisfactory. Retail price of broiler is varying from market to market in Barisal city. Through
our observation we have found that the wholesalers are enjoying more profits than producers
and retailers. The producers and wholesalers are taking high risks for poultry (broiler).
Although the poultry industry is not developed, there is a huge opportunity. Because climate
in Barisal is very suitable for poultry cultivation. Its climate is not too hot or too cold and it is
very much suitable for broiler cultivation.

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