October 5, 2009

Malaysia's largest poultry producer Leong Hup Holdings Bhd is eyeing Argentina, Indonesia and India to source for alternative supplies of corn and soy for chicken feed.

Executive director Tan Sri Francis Lau Tuang Nguang said the company would like to reduce its dependency on the US for raw materials such as corn and soy due to supply and price factors.

Lau said that by having more than one source of supply of corn and soy, the company could avoid the risk of shortage and paying high prices.

He said poultry producers in the country still depended on imported raw materials as Malaysia did not produce corn or other crops for animal feed.

The higher cost of importing corn and soy, especially from the US, was the main problem that bogged down most local poultry producers, he added.

However, he said, the company was still upbeat about the local poultry industry despite the high cost of raw materials as this was mitigated by lower fuel prices now compared with last year.

Lau said consumers would continue to consume chicken meat and eggs as they were among the cheapest sources of protein.

The prices of the two products had seen little change in the last nine to 10 years.

Lau also said the company had not finalised its plan to set up a new chicken-processing plant in the halal hub in Pedas, Negri Sembilan.

The company is still looking at several details and will probably embark on the project upon the study's completion and Lau said the facility will further strengthen the company's position in the downstream activities.