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Corporate finance

Avian Flu Devastates South Korea's Poultry Industry

Strategic Insights

— 1 min read

South Korea's poultry industry has been crippled by the region's outbreak of avian flu, with the third-largest chicken processing company, Cherrybro Food, defaulting on its loans and sales plummeting 80% this year due to the virus. The disease has been reported in 10 countries across Asia, killing at least 18 people and leading to the culling of millions of chickens. The impact on South Korea's poultry industry has been severe, with a 50% and 90% fall in chicken and duck consumption respectively, pushing about 5% of the country's 800 poultry farms to bankruptcy.

Key Takeaways:

  • Cherrybro Food, South Korea's third-largest chicken processing company, is seeking to reschedule its debt after defaulting on its loans, citing a 80% decline in sales this year due to avian flu.
  • The company is the second chicken producer in South Korea to default since the country first announced the outbreak of the disease in mid-December.
  • Avian flu has been reported in 10 countries across Asia, killing at least 18 people and leading to the culling of millions of chickens.
  • The disease has devastated the poultry industry, with people avoiding chicken consumption despite experts' advice that infected birds or their eggs are safe if cooked properly.
  • About 5% of South Korea's approximately 800 poultry farms have gone bankrupt due to the decline in chicken consumption, which has fallen by 50% and duck consumption by 90%.
  • The government has launched a campaign to promote chicken consumption, declaring Wednesdays as "chicken-serving day" at state cafeterias and eateries.
  • About 70,000 people, including government officials and celebrities, staged a street campaign to promote chicken consumption.

Statistics:

  • 80% decline in Cherrybro Food's sales this year due to avian flu
  • 50% fall in chicken consumption in South Korea due to avian flu
  • 90% fall in duck consumption in South Korea due to avian flu
  • 5% of South Korea's approximately 800 poultry farms have gone bankrupt due to avian flu
  • 18 people killed globally by avian flu
  • 300,000 tonnes of chicken produced annually in South Korea
  • 80,000 tonnes of chicken imported annually into South Korea, mostly from Thailand and the US
  • 11 countries banned from exporting poultry to South Korea due to avian flu, including China, Thailand, Vietnam, and the US

Sources:

  • Reuters
  • BBC News
  • Korea Herald

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