With 17 in Indonesia, 10 in Vietnam and eight in the Philippines, these three countries account for more than half of all new projects. Other countries covered in this report include Thailand, China, Bangladesh, South Korea, Sri Lanka, Malaysia, India and Singapore.
The mood of Indonesian meat processors towards investment has been good this year, according to Ishana Mahisa, Chairman of Nampa, the meat processors’ association.
He has seen companies engaged in both forward and backward integration, such as food distributor Sukanda Djaya, which has set up a premium sausage plant with a Japanese partner. The plant, which was completed this year, targets the food-service market with toll production.
Elsewhere, Dagsap and Petra Food have added new sausage machines. Adilmart has invested in a thermoforming machine, while So Good and Ciomas also expanded their production capacity, Mr Mahisa told Asian Meat Magazine.
“Many Nampa members decided this year to bring new machines to their existing plants,” he said, adding that more investments in new plants and capacity expansion are expected in a market with plenty of room for growth.
“AC Nielsen has found that consumption of frozen food in Indonesia is still low, below 30%. Many players and new investors will see this as an opportunity,” he added.
Budi Wahyu Setiadi, Managing Director of Javatec, has also been seeing a lot of investment in the chicken processing sector.
He said a 2016 government initiative that requires broiler producers to set up slaughterhouses if they produce more than 300,000 birds per week has been effective.
Because of this, companies supplying chicken processing machinery and equipment are now working on new chicken slaughterhouse projects.
Javatec, for instance, has been working on such projects with customers including Cibadak Indah Sari Farm, Perwiratama Group and Bounty Segar Indonesia, Mr Setiadi told Asian Meat Magazine.
Cecep M Wahyudin
Cecep M Wahyudin, Head of Law and Public Relations at the Indonesian Chicken Slaughterhouses Association affirmed the positive outlook.
“While the price of live birds is still low, the price of dressed birds is relatively stable at a good rate,” he said. “Many producers have found they must set up slaughterhouses to survive.”
Finally, packaging machine suppliers like Multivac are also voicing optimism. Akbar Febriansyah, Customer Support Manager at Multivac Indonesia, said the company has been receiving orders for thermoformers and traysealers from new and old customers.
Adapting to consumer trends
In Vietnam, where the food processing segment has been growing at a rate of around 10% per year, the industry is becoming increasingly attractive to investors.
This is being spurred by younger consumers, who account for more than half of a population of almost 100 million. These are more likely to buy processed foods and eat more natural and organic foods that are healthy, convenient and traceable.
Nguyen Anh Tuan
“To meet new trends, businesses have been changing the way they operate. They will have to look more closely at choosing clean materials and adopting safe slaughtering and processing practices,” Nguyen Anh Tuan, Deputy General Director of meat producer Mavin, told Asian Meat Magazine.
“In particular, we will see more meat integrators building value chains to control their entire production processes.”
After many years of double-digit growth, consumer demand for more ready-to-cook and ready-to-eat products continues to drive the Philippine meat processing industry. Currently they are also calling for higher quality and safer food.
With both population and disposable income growth showing no signs of stopping, the industry believes this trend will continue for some time.
Meanwhile, manufacturers are still looking for ways to improve their efficiency. To this end, many companies have been renovating and expanding their current facilities, as well as building new ones.
Tough year for South Asia
The South Asian meat business has had a tough 2019, with much planned construction being put off to a later date.
In Sri Lanka, the Easter Sunday terror attacks were a major setback for many meat companies.
Farms Pride’s Chairman, Mohamed Imtiaz, told Asian Meat Magazine that meat producers have not been investing in construction this year, given the damage the economy has witnessed.
He predicted, however, that more businesses will invest in raising their capacity if the export market picks up next year.
In Pakistan, the poultry industry is in crisis this year due to over-production and low prices, according to Khawaja Ramzee, BASF Pakistan’s Sales Manager. Moreover, the devaluation of the rupee has significantly increased the price of all imported poultry inputs.
Bangladesh’s poultry industry is being badly affected by floods and disease and poultry processors are not undertaking any new construction.
“We have not had much growth in the processed meat sector in Bangladesh. Rather a few plants have gone out of business,” Nurul Morshed Khan, Aftab Bahumukhi Farms’s General Manager for Marketing, told Asian Meat Magazine.
The government has been pushing the cattle industry into becoming self-sufficient in beef production this year. This has led to public sector investment in more processing plants.
Though poultry is India’s biggest processed meat segment, this year it has been under strain from a shortage of corn that has inflated feed prices.
Varun Reddy, Sneha Farms Group Chief Executive, said farmers are losing due to over-production and high feed costs.
“Given the excess supply, some of the larger players are focusing more on processing, but here too the results have been mixed. Some processing companies have gone out of business,” he said.
Though India’s processed meat segment has been growing slowly, so too has the live market, causing many businesses to be wary about investing heavily in processing capacity, Mr Reddy added.
Sneha Farms, he said, has decided to expand due to demand from the institutional market, which has become an additional source of revenue.