Analysis of the industry environment of the industrial feed-production

• Main Authors: Jiří Duda, Petra Křížová
• Format: Article
• Language: English
• Published: Mendel University Press 2010-01-01
• Series: Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis
• Subjects: livestock and pets; Porter’s model; industrial feed-production
• Online Access: https://acta.mendelu.cz/58/6/0103/

Production of industrial feeds for livestock and pets is an integral part of food products’ production. Production of feeds thus shares in sales worth twenty billion CZK. The paper describes and analyses the basic external environment factors operating in this sector. Most important external environment factors were identified using Porter‘s model of five movement forces of competition within an industry. Threat of entry of new companies in the sector can be expected especially from abroad. Capital investments required in this sector are very high and therefore only imports of finished product can be expected or direct purchase of an already built operation. Existing manufacturers also have a competi­tive advantage in certain brand-loyalty and market position. An important force within the industry is represented by suppliers, quality and price of raw materials. Most important inputs for production of feeding mixtures represent cereals and an ingredient with oil seed, and the price of both commodities is rather unstable and is expected to grow. In the analysed sector there operate many companies, none of them having dominant position. Major companies are briefly described in this paper as MIKROP Čebín, VVS Verměřovice, ZZN Pelhřimov, Tekro.Production of feed mixtures is significantly influenced by livestock development. Unfortunately, there is a gradual reduction in livestock numbers in all categories, above all pigs and cattle. Feed manu­facturers should focus on the expansion of other parts of the market – feeds for pets, fish, etc. It is arguable that the role of substitutes in the industrial feed production is not high. Full-value substitute for the industry does not exist.