JAVA, INDONESIA — De Heus Animal Nutrition completed acquisition of the compound feed operations of Neovia Indonesia from Archer Daniels Midland Co.
The two feed mills, PT Welgro Feedmill and PT Wirifa Sakti, had a total sales volume of 125,000 tonnes in 2019. Welgro and Wirifa, located in West Java and East Java, focus mainly on the poultry, aqua and swine feed segments.
“After our successful entry into Indonesia in 2018 through the acquisition of PT Universal Agri Bisnisindo (UAB) in Bekasi, West Java, this acquisition will accelerate our Indonesian growth strategy,” said Gabor Fluit, business group director at De Heus Asia. “It gives us an excellent opportunity to expand our position in key livestock and aqua farming areas, close to our existing and potential new customers.”
The coronavirus has decreased demand for animal feed but Fluit said the company believes longer term the markets will recover.
It is estimated that the size of the animal feed market in Indonesia will increase from 19 million tonnes in 2019 to 22 million tonnes by 2022. Indonesia’s current population is 273 million, making it the largest consumer market for proteins in Southeast Asia. The demand for animal proteins will continue to increase over the coming years due to the growth in disposable income and population as well as the change in consumer preferences.
“Since the UAB acquisition, De Heus has replicated its successful market approach developed in other Southeast Asian countries, supporting the further professionalization of independent farmers in the local livestock and aqua farming sector with premium-quality animal feed products and practical feed and farming advice,” Fluit said. “In addition, we have improved production processes, invested in technical training of personnel and started construction of a new production line for aqua and poultry feed at the existing UAB feed mill.”
Kay De Vreese, president director at De Heus Indonesia, said the coming year will be an important transition period.
“We will identify the investments needed in the production processes to improve product quality and increase production capacity,” De Vreese said. “In addition, Welgro and Wirifa will be aligned with De Heus standards so it will create a strong and unified De Heus organization in Indonesia. We will also continue to assess potential opportunities to strengthen our position in the value chain, both organically and through acquisitions.”