October 2, 2006

 

Malaysian poultry company looks abroad for expansion

 

 

Malaysian poultry company Lay Hong Bhd hopes to maintain its momentum after reversing two years of losses by posting a pre-tax profit of RM10.28million (US$2.8 million) for the financial year ended Mar 31.

 

The company would achieve this through improving prices of poultry and expansion into overseas markets, Managing director Yap Hoong Chai said after the company's AGM

 

The company recorded losses of RM3.28 million (US$890,000) and RM3.81 million (US$1.03 million) in 2004 and 2005 respectively.

 

Yap also remarked that although the price of broilers had been rising considerably during the past year, the price of eggs had stagnated.

 

Eggs contribute half the company's revenue so rising egg prices would do much for the company's profitability, he said.

 

Lay Hong's farms currently produces 1.1 million eggs per day. With the completion of its new RM18 million (US$2.8 million) farm in Jeram, Selangor, by the first quarter of 2007, the company is targeting 1.3 million eggs per day. 

 

Yap said Lay Hong owed its profitability to increased production and higher productivity as well as higher prices for poultry products.

 

Lay Hong's food processing division was focusing on research and development to widen the group's product range.

 

The company hopes that revenue from overseas, currently accounting for 30 percent of its revenue, would be raised to 50 percent by 2011. 

 

This would be done through tapping into markets such as the Middle East, Vietnam, Hong Kong and Japan. 

 

However, Yap noted one obstacle to the company's goal would be the fact that poultry and other agriculture products continues to remain highly protected by their respective countries despite free trade agreements.

 

However, one bright prospect of the company is that there is hope of expanding its chicken feed market in Brunei. The company's plant in nearby Kota Kinabalu produces 2.5 tonnes of feed a month and Yap said he could see it doubling to five tonnes a month if the company can gain greater access to the Brunei market.