Feedmill Construction Report 2020

Covid-19 hits feedmill construction across Asia

Covid-19 has forced a number of new construction projects to be shelved, while others have been put on hold for at least the next year.

With social restrictions curtailing demand for livestock products, Asian feed production is bracing for a steep drop. In South Asia, for instance, some estimates predict a fall of up to 50% this year.

To illustrate the situation, Asian Feed Magazine identified only 30 finished and ongoing construction projects up to April.

Significant contraction

Following an impressive year of aqua feed production, Bangladesh is now facing dismal prospects.

Biplob Kumer Sarker, Japfa Comfeed Bangladesh’s Country Head told Asian Feed Magazine he expects the coronavirus outbreak to cause the feed industry to contract significantly this year.

The company recently entered Bangladesh and was planning to open a feedmill this year. “This has been put on hold for the immediate future,” Dr Sarker said.

He expects feed production to fall by at least 40-60% as demand from the poultry and aqua sectors has declined.

Meat consumption has been low due to the lockdown and the resulting economic fallout. Dr Sarker predicted that consumers will look to cut costs and “remove meat from their plates” once the country opens up.

Falling consumption has already forced many poultry and aquaculture businesses to close, in turn creating less demand for feed.

“This is going to have a long-term impact. We are going to have an issue for at least the next one to one-and-a-half years,” he added.

With the government forecasting a 4% decline in GDP next year, the future is in the balance for the animal feed industry.

Double crunch

Dr Athula Mahagamage

US Soybean Export Council’s Consultant for Sri Lanka, Athula Mahagamage, has seen a 7% increase in feed prices between March and April, due to raw material shortages.

Sri Lanka’s feed industry is in the midst of a double crunch caused by dwindling domestic corn stocks and a weakening rupee. The industry, which depends heavily on imported corn, had not been given any import permits. He believes raw-material costs have been rising because of this.

In the meantime, the rupee has depreciated by at least 10% against the dollar in the first quarter and is expected to fall further. Feedmilers have been passing on cost increases to an already damaged animal protein industry.

“We see a situation where high costs and low demand have led large poultry integrators to cut down production drastically. There is just no cashflow,” said Dr Mahagamage.

Cashflow hit

Dr Dinesh Bhosale

Indian poultry had already been affected by the coronavirus before it even reached the country, when rumors connecting the virus with chicken consumption slashed meat sales by 80%.

Dinesh Bhosale, former Chairman of the Compound Livestock Feed Manufacturers Association, said meat and dairy consumption have since been hit by disruptions to the supply chain.

“This has affected dairy, poultry and aqua feed consumption. Farmers do not have enough funds to buy feed and fodder,” he said.

As the pandemic deals a severe blow to India’s economy, some feedmillers have postponed opening new feedmills.

“I don’t think companies will make any new investments this year or the next. Their cashflow has been affected by the Covid-19 challenge,” said Dr Bhosale.

Over the next two years, feed companies will be faced with the challenge of producing cheaper feed without compromising on quality, he added.

Another grueling year

Meanwhile, the pandemic has put further strain on Pakistan’s animal protein industry, which had been in crisis even prior to the outbreak.

BASF Pakistan’s Sales Manager, Khawaja Arshaq Ramzee, told Asian Feed Magazine that a surplus of layers and broilers has caused havoc in the market for some time.

“The lockdown further decimated the market,” said Dr Ramzee. “With no market for broiler breeders, producers have even been handing the birds out for free.”

The closure of the border with Afghanistan and a shutdown of all institutional sales had created a surplus of meat by May with low consumer demand. The lockdown has also caused supply disruptions to and from feedmills.

“Feed additive imports have also been stopped. Only materials that had been available in Pakistan before the lockdown are here. For goods that were already in Pakistan, customs clearance has been extremely slow. Even when they are cleared, transport is virtually absent, or can be found at an exorbitant cost,” said Dr Ramzee.

These disruptions have led to many smaller feedmills and home mixers closing. Larger feedmills are only functioning at 60% capacity. He does not expect the industry to pick up soon.

Last year, Asian Feed Magazine outlined new feedmills underway by Fajr Feedmill, Khushal Feed, Shabbir Feed and Shamim Group. Since then, Fajr is continuing with its project, but Khushal has closed down and Shabbir has halted construction. Shamim’s new feedmill has come online, but its older one has since been shuttered.

Stagnant feed consumption

Vietnam’s feed consumption is expected to be stagnant this year due to a combination of ASF and Covid-19.

Feed demand fell by 11% last year to 26.8 mt, with new estimates suggesting this figure will remain steady in 2020.

ASF’s effect on the pig industry is still significant. Although the government has brought in policies to support repopulation, farmers are still reluctant to take part.

It is estimated that ASF will have killed 35-55% of finishers and over 60% of sows by the end of last year. There is already a lack of piglets and sows for repopulation. Even though the price of pork is high, repopulation is still very slow.

Supply disruptions that have lifted feed prices and a downturn in consumption from lockdowns have forced some significant changes in Vietnam’s livestock industry.

“The domestic feed industry receives 70-80% of its raw materials from overseas, but the pandemic has made imports more difficult. This caused the price of feed to increase by about 5% in March and April,” Nguyen Anh Tuan, Mavin Group’s Deputy General Director, told Asian Feed Magazine.

Positive prospects

Desianto Budi Utomo

Investment sentiment within Indonesian feed milling remains positive, even if this is not as bullish as it was five years ago, said Desianto Budi Utomo, General Chairman of the Indonesian Feed Producers Association.

Foreign companies from China, South Korea and Europe have been investing in Indonesia by opening new plants or acquiring existing ones. Similarly, some feed millers have been expanding.

Dr Utomo said: “There are no barriers to entry in this industry. Whoever has money can invest.” As a result, “the presence of new feedmills certainly makes the competition stiffer and depresses profit margins, so all players must increase their efficiency and be more adaptive to changes and challenges,” he added.

Harris Muhtadi

Harris Muhtadi, the association’s Chairman, said the aquaculture feed industry had also seen investment. “The competition will be fierce. It seems a price war cannot be avoided, and might lead to low-quality feed production to

reduce the selling price. This in turn will impact fish performance,” he said.

Rather than competing on feed price and payment terms, Dr Utomo would prefer to see more competition in feed quality and customer satisfaction.

Anang Hermanta

Anang Hermanta, Sinta Prima Feedmill’s Marketing Director, also believes in the industry’s potential for growth. “Look at the number of the feed association’s members. Now it has gone up from 83 to 92. This tells us that this business is attractive for new and existing investors,” he said.

Adisseo Asia Pacific


Country Singapore
Project location St John’s Island
Project description Aquaculture R&D facility
Products produced N/A
Capacity N/A
Investment N/A
Equipment supplier N/A
Completion December 2019
Comments The facility focuses on aquaculture nutrition, aquatic animal health, and innovative aquatic science technologies.
Adisseo’s new aquaculture r&d center will look at factors like stress and mortality.

Adisseo and Calysta


Country China
Project location China
Project description A commercial-scale alternative feed facility
Products produced FeedKind protein
Capacity 20,000 tons/year for the first phase, while a second phase will add a further 80,000 tons of capacity to the site.
Investment N/A
Equipment supplier N/A
Completion The first phase is targeted to open in 2022
Comments FeedKind is made using very little water and no agricultural land by fermenting natural gas. It is said to be a safe, healthy and traceable protein that is priced comparably to existing sources of protein.
The FeedKind production facility of Calysta in the UK. The company and Adisseo are building a similar facility in China.

ADM


Country Vietnam
Project location Hoa Mac, Ha Nam province
Project description Fifth feedmill in the country
Products produced Swine, poultry and rabbit feeds
Capacity 300,000 tons/year
Investment USD 20 million
Equipment supplier Technology from EU
Completion November 2019
Comments The facility features the pneumatic transfer of raw materials to avoid cross-contamination and a biomass boiler to produce renewable energy. Its automated micro-dosing system ensures precise nutrient contents, while an automatic bagging line and pelletizing robot help with quality and traceability.
The Hoa Mac plant is designed to produce up to 300,000 tons of swine, poultry and rabbit feed per year.

Biomin and the Chinese Academy of Agricultural Sciences’ Institute of Animal Sciences


Country China
Project location Beijing
Project description Joint laboratory of animal science
Products produced N/A
Capacity N/A
Investment N/A
Equipment supplier N/A
Completion January 2020
Comments Research at the new facility focuses on animal nutrition, mycotoxin detoxification and gut performance.
The unveiling ceremony was attended by staff from Biomin and the institute.

AgriProtein


Country Singapore
Project location Science Park II
Project description A project management and research center
Products produced Insect protein for animal feed
Capacity N/A
Investment  N/A
Equipment supplier  N/A
Completion December 2019
Comments The center spearheads investigations into anti-microbial peptides, chitin and products derived from the exoskeletons of insects. Employing 20 staff, the center also serves as AgriProtein’s global analytical chemistry reference lab where teams will conduct larvae feed trials using local organic waste streams.
The Singapore center serves as AgriProtein’s global analytical chemistry reference lab.

Anmol Feeds


Country India
Project location Jammu and Kashmir
Project description New feed production plant
Products produced Poultry feed
Capacity 70,000 tons/year
Investment N/A
Equipment supplier N/A
Completion June 2019
Comments By opening the new plant, the company will be closer to its customers in Jammu and Kashmir and can better adapt its products to their needs and preferences.
Anmol’s new feed production unit in Jammu and Kashmir.

Charoen Pokphand Indonesia


Country Indonesia
Project location Semarang, Central Java
Project description New animal feedmill
Products produced Mainly poultry feed
Capacity Initial installed capacity: 20,000 tons/month
Investment N/A
Equipment supplier N/A
Completion H2 2019
Comments The company is also planning other feedmills in West Sumatra, West Kalimantan and East Java with a similar installed capacity.

CP Vietnam 


Country Vietnam
Project location Binh Phuoc province
Project description Poultry feedmill
Products produced Poultry feed
Capacity 342,000 tons/year
Investment USD 16.4 million
Equipment supplier N/A
Completion 90% of the project has been completed
Comments The feedmill is part of the company’s entire project to produce processed chicken to export to Japan. However, due to Covid-19, exports to Japan are suspended. The company is waiting for the market in Japan to recover to continue with the project completion.

De Heus Myanmar


Country Myanmar
Project location Myaung Dagar
Project description New aqua feed production facility
Products produced Aquaculture feed
Capacity 200,000 tons/year
Investment N/A
Equipment supplier N/A
Completion November 2019
Comments With the new facility, De Heus aims to give farmers access to affordable, high-quality feed to help the development of their farms.
The inauguration of De Heus’ new aqua feedmill in Myaung, Myanmar.

Fenanza


Country Indonesia
Project location Sumedang, West Java
Project description Second premix plant
Products produced Vitamin premixes
Capacity 1200 tons/month
Investment N/A
Equipment supplier Machinery from UK
Completion Targeted to start commercial production in December 2020
Comments Fenanza will dedicate the second plant to vitamin premix production while the first plant will only produce mineral premix. The new plant will support the company’s plans for export to countries in Asia.
The ground-breaking ceremony of Fenanza’s second premix plant in early April 2020.

Gargi Genetics


Country India
Project location Mumbai
Project description Its first “scientific feed” factory
Products produced Feeds for pregnant sows, young piglets and growing pigs
Capacity 3 tons/day of dry feed
Investment N/A
Equipment supplier N/A
Completion Late 2019
Comments The capacity was planned to be ramped up to 10 tons in March 2020.

Green Feed Vietnam


Country Laos
Project location Vientiane
Project description First animal feedmill
Products produced Pig and poultry feeds
Capacity 72,000 tons/year for stage 1 and 150,000 tons/year for stage 2
Investment USD 8 million
Equipment supplier Technology from the Netherlands, France and the US
Completion June 2020
Comments The company’s vision is to focus on exploiting potential in developing livestock markets such as Laos, Myanmar and Cambodia.
The groundbreaking ceremony of GreenFeed’s feedmill in Vientiane, Laos.

Hung Vuong


Country Vietnam
Project location Binh Dinh province
Project description Animal feedmill
Products produced Livestock feed
Capacity 200,000 tons/year
Investment N/A
Equipment supplier Andritz
Completion Late 2020
Comments The feedmill is part of a joint-venture project between Thadi Group and Hung Vuong. The jv project targets to produce 45,000 sows this year in An Giang and Binh Dinh provinces.

Indojaya Agrinusa


Country Indonesia
Project location Deli Serdang, North Sumatra
Project description New feedmill
Products produced Poultry feed
Capacity 20,000 tons/month
Investment USD 42 million
Equipment supplier N/A
Completion July 2019
Comments The new plant, which functions as an extension of Indojaya’s existing plant in the area, supplies North Sumatra, Aceh and Riau.
The new 20,000 tons/month feedmill of Indojaya in Deli Serdang, North Sumatera.

Indojaya Agrinusa


Country Indonesia
Project location Medan, North Sumatra
Project description Two warehouses
Products produced Poultry feed
Capacity 9000 tons in total
Investment N/A
Equipment supplier N/A
Completion 2020
Comments

Indojaya Agrinusa


Country Indonesia
Project location Deli Serdang, North Sumatra
Project description New aqua feedmill
Products produced Aquaculture feed
Capacity 9500 tons of floating fish feed, 2000 tons of sinking feed and 700 tons of shrimp feed per month.
Investment N/A
Equipment supplier N/A
Completion November 2019
Comments Aqua feed produced at the facility are sold in northern areas of Sumatra.
Indojaya’s new mill will meet 30% of regional demand.

Indonesia’s Ministry of Fisheries and Marine Affairs


Country Indonesia
Project location Pangandaran, West Java
Project description New feedmill
Products produced Aquaculture feeds
Capacity 1 ton/hour
Investment N/A
Equipment supplier N/A
Completion H2 2019
Comments The plant produces floating feeds for freshwater and marine fish. The technical fishery agency in the province was appointed to run the plant.
The aquafeed plant of Indonesia’s Ministry of Fisheries and Marine Affairs in Pangandaran produces fish feed at an affordable price.

Jadeed Feed Industries


Country Pakistan
Project location Khanewal city, Punjab
Project description New animal feedmill
Products produced Poultry feed
Capacity 60 tons/hour
Investment N/A
Equipment supplier Buhler Group
Completion January 2020
Comments
The opening ceremony of Jadeed Feed Industries’ feed plant in Khanewal city.

Japfa Bangladesh


Country Bangladesh
Project location Gazipur
Project description New animal feedmill
Products produced Poultry feed, including feed for Sonali native chicken
Capacity 15 tons/hour
Investment USD 6.5 million
Equipment supplier Famsun
Completion April 2020 (postponed due to Covid-19 pandemic)
Comments

Kemin


Country China
Project location Zhuhai center, Guangdong province
Project description New innovation and technology center
Products produced N/A
Capacity N/A
Investment USD 14.2 million
Equipment supplier N/A
Completion November 2019
Comments The center focuses on serving a number of segments, including human and animal nutrition, aquaculture, pet food, and specialty crops.
Kemin’s new innovation center in Zhuhai, China.

Leong Hup International


Country Vietnam
Project location Sa Dec City, Dong Thap province
Project description Aqua feedmill acquisition
Products produced Aqua feed
Capacity 118,800 tons/year
Investment USD 15.4 million
Equipment supplier N/A
Completion Acquired in Q1 2020
Comments The company will invest around USD 2.3 million to add a poultry feed production line at the feedmill with operations scheduled to commence by end 2020.

Leong Hup International


Country The Philippines
Project location Central Luzon
Project description A new poultry feedmill
Products produced Poultry feed
Capacity 240,000 tons/year
Investment USD 13.8 million
Equipment supplier N/A
Completion End 2020
Comments

Malindo Feedmill


Country Indonesia
Project location Lampung
Project description New feedmill
Products produced Poultry feed
Capacity 15,000 tons/month
Investment USD 17.6 million
Equipment supplier N/A
Completion Target by end 2020
Comments The plant will boost Malindo’s total animal feed capacity by 20%. Many of its processes will be automated for better efficiency and increased production. It was part of a company-wide move to introduce new technology at all its sites.

Nor-Feed Vietnam


Country Vietnam
Project location Mekong Delta
Project description Natural feed additives plant
Products produced Natural feed additives for pig, poultry and aquaculture species
Capacity 4000 tons/year
Investment USD 6 million
Equipment supplier Technology from northern Europe
Completion Q4 2021
Comments The company aims to meet the needs of Vietnam and other countries for herbal extracts sourced from Asia, specifically Vietnam.

New Hope Indonesia


Country Indonesia
Project location Balaraja, Banten
Project description New aqua feedmill
Products produced Fish feed
Capacity 7500 tons/year
Investment N/A
Equipment supplier N/A
Completion Early 2020
Comments Built in the same complex as the company’s poultry feedmill in Balaraja, the plant will meet growing demand for fish feed in the country. The company has plans to set up fish feed production lines in other areas.
With the presence of its Balaraja plant, New Hope aims to meet growing demand for fish feed in Indonesia.

New Hope Binh Phuoc


Country Vietnam
Project location Binh Phuoc province
Project description Pig feed production facility
Products produced Pig feed
Capacity 100,000 tons/year
Investment USD 4 million
Equipment supplier Technology from China
Completion Early 2021
Comments Pig feed produced from the facility is to meet demand from the company’s pig breeder farm and commercial farm in Binh Phuoc. Currently, New Hope’s animal feed production capacity in Vietnam has reached 1 mt, accounting for 10% of the market share.

Pilmico Foods Corporation


Country The Philippines
Project location Tarlac province (Luzon) and Iligan city (Mindanao)
Project description New feedmills
Products produced Animal feeds
Capacity The company will add 40 tons/hour to their production, increasing its feed output capacity to 153 tons/hour.
Investment USD 33.82 million
Equipment supplier N/A
Completion The Tarlac plant was completed in 2019 while the Iligan plant is targeted for completion by end 2020.
Comments The company’s two existing feedmills are operating at 85% of its capacity, prompting the company to expand its operations.

Rayan Cattle Feed


Country Pakistan
Project location Multan
Project description Cattle feed plant
Products produced Cattle feed
Capacity 10 tons/hour
Investment N/A
Equipment supplier Pakistan’s Bahu Industries Gujranwala
Completion February 2020
Comments The plant was retrofitted into a cattle feed plant from an existing poultry feed plant called Wahid Poultry Feeds.
The plant of Rayan Cattle Feed in Multan, Pakistan.

Widodo Makmur Unggas


Country Indonesia
Project location Ngawi, East Java
Project description New feedmill
Products produced Poultry feed
Capacity 20,000 tons/month
Investment N/A
Equipment supplier N/A
Completion 2020
Comments Currently Widodo runs a small capacity feedmill in Balaraja, Tangerang in partnership with a local player. The company runs broiler breeding and contract farming businesses in Java.

Zheng Chang’s client


Country Myanmar
Project location Myanmar
Project description New layer feedmill
Products produced Layer feed
Capacity 10 tons/hour
Investment N/A
Equipment supplier Zheng Chang
Completion Q1 2020
Comments The facility is equipped with Zheng Chang’s SSHJ 2d double-shaft mixer. It is able to ensure smooth transmission and reduce power loss with double gearboxes. The SFSP 112F hammer mill is designed for the fine grinding of fibrous, high moisture and oily materials, with more uniform feed particle size.
The SSHJ 2d double-shaft mixer installed at the layer feedmill in Myanmar.