September 19, 2005

 

East Asian feed millers look to China, SE Asia for expansion

 

 

Many East Asian feed millers are looking to China and Southeast Asia for expansion, in light of saturated domestic feed markets and opportunities to lower costs overseas.

 

The new locations overseas would provide easy access to locally produced grains, which are cheaper compared with more costly imports at home.

 

In South Korea, feed output has been declining gradually in recent years, and feed demand for 2005 was also reportedly forecast to fall by about one percent.

 

South Korea's largest feed maker CJ Corp., reportedly had 11 feed mills in five countries overseas, including six in China. The company hoped to increase its number of overseas mills by more than four times within a decade, reports said.

 

According to industry feedback, China's feed market has expanded by more than six percent on average a year since 1997.

 

Meanwhile, Taiwanese feed millers reportedly suffered a fall in demand this year, after WTO rules forced the country to open up its markets to poultry and swine imports.

 

In response, major Taiwanese feed makers such as Great Wall Enterprise Co. turned their attention towards establishing feed plants in China, Vietnam, Indonesia and Malaysia.

 

However, East Asian feed millers' investments overseas have also faced tough competition from existing foreign feed millers.