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“Iran has to import more than 80 percent of the feed materials”

“We have to import more than 80 percent of the feed materials in order to produce compound feed. Another problem is the rules and regulations imposed by the government. A lot of rules, regulations and lots of bureaucracy make production difficult. We are holding meetings with politicians and official authorities in order to reduce the level of these regulations.”

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Hossein Keyhani
Managing Director of Iran Feed Millers’ Union

In FeedExpo 2018 that we have attended in Tehran in 11-13 August, we found the opportunity to make an interview with Mr. Hossein Keyhani, the Managing Director of Iran Feed Millers’ Union. In our conversation, Hossein Keyhani said that that there are around 650 feed millers in Iran and roughly 450 0f them were their members. Keyhani also pointed out that they are following up all the activities with regard to the feed industry and hold meetings with members of parliament and other official authorities. Keyhani stressed that most of the Iranian farmers insist on using traditional food that they produce in their own farms and do not know the significance of compound feed yet. “Through seminars and exhibitions applying the farmers, we plan to explain the importance of compound feed and raise awareness about this type of feed,” he added. Underlining that Iran has the capacity to produce 20 million tons of feed per annum; Keyhani said that Iran and Turkey shared a similar level of capacity. He said that the deterioration of relations with US will have negative effects on the access to raw materials for the industry but somehow it may lead the industry to find ways to become self-sufficient in the long term.

Below are the questions we asked Hossein Keyhani and he answered for us along our candid conversation:

Mr. Keyhani, can you please introduce us Iran Feed Millers’ Union?
Iran Feed Millers’ Union is established in 2008. The main purpose for establishing such an institution was to bring the industry under one roof and construct a national and powerful association for the feed industry in Iran. We aimed to collect the biggest and most important feed millers of the country and achieved it. There are approximately 650 feed millers in Iran and their total production capacity is 20 million tons per annum.

Can we say that more than half of these millers are your members?
Around 450 feed millers in our country are our members for the time being. So, yes. Definitely!

Can you tell us about your activities? What do you do for your members?
We are following the activities that are related to our members and the industry in the parliament and in the presence of certain official institutions and authorities. We are also supplying the raw materials that are needed in feed plants.

How would you describe the general situation in current feed industry in Iran? Can you also tell us how it used to be in the past?
In Iran, the feed production industry has a history of nearly 60 years. The first feed milling company in Iran was established in… Give me a second to convert the date to Christian era. Yes, it was established in 1963. More than 10 billion dollar s is invested in Iran in feed industry in total. Over 50 types of products are being produced in the factories of Iran with regard to the feed industry including compound feed, concentrated feed, premixes etc. In consideration of the general improvement in the feed industry, feed millers in Iran started to use the new technology in their facilities.

I want to tell you about a problem we suffer in domestic feed sector. Most of the farmers still prefer to use traditional feeds for their animals. They fall short of understanding the significance of compound feed. They prefer to produce feed in their own farms. Through seminars and exhibitions applying the farmers, we plan to explain the importance of compound feed and raise awareness about this type of feed. Right now, we have a good potential and new technology in feed plants.

I want to compare Iran feed industry with Turkey. According to the statistics, Turkey has 450 feed plants. Their total capacity is 22 million tons of compound feed. So, if we compare this figure with that of Turkey, we will see that Iran is equal to Turkey.

Yet, we have a problem in feed industry. We have to import more than 80 percent of the feed materials in order to produce compound feed. Corn, wheat, soybeans and etc. And of course, this increases the cost. There is drought in Iran. It causes new crisis in this country.

What are the problems you see in Iran feed industry? How do you plan to solve them?
The main challenge that we face as I mentioned above is that, the farmers do not use compound feed. They prefer to use traditional feed produced in their farms. We want to educate the farmers in a way that they understand why compound feed is far better than the traditional one. The heat radiated to the compound feed in a feed plant eliminates many of problems that can be seen in feed. It is very important to educate and convince the farmer that using the compound feed is better with regard to efficiency.

So, this is one of the problems you come across in the market. What about the others?
Another challenge we face is that, the price of the feed ingredients to produce compound feed is higher than those of feed produced in the farms with traditional methods. This is another problem and Iran Feed Millers’ Union tries to somehow close the gap between these prices. We are conducting some activities to decrease the prices of compound feed ingredients.
Another problem is the rules and regulations imposed by the government. A lot of rules, regulations and lots of bureaucracy make production difficult. We are holding meetings with politicians and official authorities in order to reduce the level of these regulations.

In recent two-three years, breeder farms have started to use compound feed. However, in many of the broiler farms, this is not the case. The breeder farms understood the significance of compound feeds in their farms.

The high inflations rates that we are facing recently increased the price of some raw materials such as corn and soybean which are being imported. And this increase in price is a big problem for the farmer. It becomes more and more difficult for the farmer to find cheaper raw materials. For the feed plants, it is easier to find cheap sources.

Iran has signed a deal with US in 2015 and the sanctions were eased. This obviously enhanced the Iran economy. However, the relations with US are worsening again. What do you want to say about this?
The most important effect of US exiting from the nuclear agreement for us is the increase in the exchange rate. The other problem we may face in near future is the access to cheap raw materials because of the American embargo. Also we may have difficulty in transferring money to abroad for international trade.

You have mentions three possible negative effects of the recent attitude of the US. On the other hand, some of the Iranian sector representatives I get in touch with say that the sanctions may bring about some positive side effects in the middle and long run because local producers will find ways to fulfill their demands domestically. Do you agree with this idea?
From one point of view, I would agree with that. In short term, we may face problems. Accessing the raw materials seems to be pretty difficult in the following three-four months. However, we believe that these sanctions will encourage the farmer to produce compound feed in feed mills. We will have a limited access to raw materials. This is a fact and we cannot deny that. However, maybe in the near future, we will concentrate more on increasing the efficiency due to the negative effects of this sanction.

Another thing that Iran Feed Millers’ Union is working on it is using agricultural residues as some raw materials sources for compound feed. We think this to be one of our strategic moves after the imposition of the se sanctions.

What do you think about Turkish milling technology? Do you import machinery from Turkish companies?
Today, there are many companies in Iran established by Turkish milling technology companies. I can comfortably say that they are in a very good position in Iran.

Some Iranian industrialists claim that in Iran, it is much more difficult to export than to import commodities. Why do they think like this?
Given the current economic situations, a high number of the official authorities think that increasing export volume may solve many of our problems we face within the borders of the industry. Although it is difficult, many officials try their best to make it easier to export products to abroad. There is good opportunity to export in the country. We have borders with many countries.

Do you want to add anything?
I want to say that, through increasing the efficiency of raw materials which are available but limited in Iran, we can bypass the American embargo.

We also suggest you to read our previous article titled "“We have the capacity to make a production for a population of 400 million”".

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