December 10, 2013

Indonesian firms jointly invest US$41.8 million in animal feed plants

Five Indonesian firms will pool a combined investment of US$41.8 million to build animal feed plants in 2014 and will compete alongside Sierad Produce and Japfa Comfeed in Indonesia.

The feed mill industry accounts for around US$4.2 billion a year, or less than 50% of the total output of US$10.1 billion total earnings from the poultry industry, said Sudirman, the chairman of the Indonesian Feed Mills Association. He added, "The future of the feed mill industry is promising, especially poultry."

Sudirman added that Jakson Niagatama is among one of the investors. He did not disclose the exact investment for each company. Demand for the raw materials of fodder outside of corn continues to increase. This year, the demand for fish meal is estimated to increase to 17,000 tonnes from last year; meat and bone meal up to 157,000 tonnes; hydrolysed feather meal up to 84,000 tonnes; and blood meal up to 4,000 tonnes. Poultry meat meal is expected to increase to 41,000 tonnes, according to the association.

Indonesia's animal feed consumption has increased, with this year's consumption estimated to reach 14.3 million tonnes, up from last year's 12.9 million tonnes. The growth is expected to increase by 10% next year, Sudirman said.

As the country is set to hold elections next year, the development may influence consumption of feed in Indonesia, Sudirman said.

The announcement of the planned investment in new feed mills had little impact on the share prices of Sierad Produce and Japfa Comfeed. Shares of Japfa rose 1.6% to US$0.11 while Sierad Produce closed unchanged at US$0.004 on the Indonesia Stock Exchange (IDX).