Aboitiz Foods to set up feed-to-farm business in Malaysia
The Aboitiz Group’s integrated food and agribusiness company intends to establish a feed-to-farm business in Malaysia while exploring other expansion opportunities in Southeast Asia.
In a virtual briefing on Monday, Aboitiz Foods president and CEO Tristan Aboitiz said the firm was looking at an integrated feed-to-farm business model in East Malaysia.
Aboitiz Foods was also looking to expand operations of the existing Long An facility in Vietnam, he said.
The group is likewise studying other opportunities in the Philippines and Indonesia “where growth in feed volumes have been better than expected over the past 12 months.”
At the same time, Aboitiz said they have allocated capital expenditure to build research and development (R&D) farms in Malaysia, Vietnam and the Philippines to enhance their feed business.
While he did not disclose the budget allocation for this purpose, Aboitiz Foods’ parent firm, Aboitiz Equity Ventures Inc., said in its annual report that R&D farms would be constructed for swine in the Philippines, aquaculture in Vietnam and poultry in Malaysia.
Back home, Aboitiz Foods has lined up the refurbishment of various finisher farms in Tarlac and other plant maintenance projects.
At present, Aboitiz Foods operates in eight Asian markets: Brunei, China, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam. Its business is categorized into four segments: feeds, flour, farms and pet food.
Aboitiz Foods has completed the construction of two feed mills in Vietnam and China.
The $45-million Long An feed mill facility in Vietnam started operating in October last year, making it Aboitiz Foods’ largest investment in that country to date. Approaching full capacity, it currently services the livestock sector in Southern Vietnam.
“We are also having preliminary discussions about expanding the mill’s capacity,” Aboitiz said in an email inquiry.
On the other hand, the Yunnan mill in China, valued at $23.1 million, was completed in December last year.
“The Yuxi mill is taking longer to ramp up than we would like, but progress is being made despite the challenging market conditions in China,” he added.
Aboitiz said the firm considered its regional footprint as a “strategic advantage” to meet the growing demand and address diverse market needs across the region.
“We have the advantage of being able to grow capacity in markets that are growing quicker than others and leverage existing capacity to kind of like ride through markets that are not quite slowing down but not growing as quickly as we’d like,” he added.
Aboitiz also said their exposure to different markets allowed them to diversify risk and cater to the region’s overall growth instead of relying on a single market to spur future growth.
