March 11, 2020

Leong Hup International acquires Vietnam feedmill for US$14.89 million

The acquisition represents the Malaysia-based integrated poultry operator company's diversification into aquaculture feed in Vietnam.

Currently Leong Hup International and its subsidiaries produce feed products for chickens (parent stock, broiler and layer), colour birds, ducks, cattle, goats, swine and quail in Vietnam.

The new asset, purchased at 63.07 million MYR (~US$14.89; 1 MYR = US$0.24)can produce 118,800 tonnes of aquaculture feed per annum, with plans in place to increase the new asset's capacity and expand production to poultry end by the end of this year.

Lau Tuang Nguang, executive direct and group chief executive officer of Leong Hup International said Vietnam is one of the group's growing markets in Southeast Asia, and the acquisition gives the group the opportunity to introduce more feed products to the market.  Leong Hup International will strengthen its market position in Vietnam, focusing on the southern region.

Leong Hup International reported its unaudited consolidated financial results for the fourth quarter of 2019 at a 15.6% gain in revenue from Vietnam compared to the same quarter the year prior thanks to feed sales volume. The new acquisition will propel the group's feed sales further.

Lay Joo Hong, executive director and CEO of Leong Hup International Vietnam, said the group has seen huge growth from its Vietnam operations since it first entered the country in 2007. He added that the group's feedmill in Dong Nai (which began operations in January 2019) has contributed greatly, with increased production set to follow.

With the acquisition and expansion of the asset to poultry feed, he said the group's combined capacity in Vietnam is estimated to rise by 17.5% per annum.