Poultry breeder teams up with Japan-based giant NH Foods
KUALA LUMPUR: Lay Hong Bhd has entered into a joint-venture (JV) agreement with Japan-based NH Foods Ltd, marking its venture into the overseas market, especially to countries with large potential like Singapore and Japan.
Under the agreement, a private limited company NHF Manufacturing (M) Sdn Bhd, will be set up to manufacture, market, distribute and sell processed meat-based foods.
“The JV agreement will enable Lay Hong to leverage on NH Food’s research and development (R&D) as well as manufacturing skills, to enable overseas market penetration.
“In addition, the JV is expected to improve Lay Hong’s financial position in the long run and transform it from a poultry player to an integrated food company,” said Lay Hong executive director Yap Chor How after the signing ceremony.
Meanwhile, NH Foods, which is Japan’s largest company and fifth largest in the world by sales, will be able to enhance its business presence in the South-East Asian market through the JV company.
In Malaysia, the poultry sector is the biggest component of livestock industry and it is supplying about 81% of total meat and almost 111% egg demand by the domestic market.
Malaysia is the third largest producer of poultry meat in the Asia-Pacific region.
“Both poultry and food industries are expected to grow steadily despite the economic uncertainties.
“However, with more opportunities in the food sector, we will be able to expand rapidly and achieve greater heights especially with such a strong partner like NH Foods in the picture,” said Yap.
Lay Hong will be responsible for the operational matters of the JV company in areas such as licensing, taxation, obtaining certificates such as the Halal and Hazard Analysis Critical Control Point (HACCP) certifications, procurement or leasing of land, logistics as well as sales and marketing in Malaysia.
On the other hand, NH Foods will oversee matters relating to the sale and export of further processed foods to the overseas market, including Singapore and Japan.
The further processed foods will be marketed under the brand name “Nippon Nutriplus”, expected to be made available by this year end.
Further processed foods refer to the food that is commercially prepared to optimise ease of consumption, where such food is usually ready to eat without further preparation.
Some samples of further processed foods are sausages, nuggets, and fried chicken.
Both companies will eventually set up a production plant for NHF Manufacturing.
In the meantime, Nippon Nutriplus products will be manufactured at Lay Hong’s production plant as its current utilisation rate is only at 60%.
Lay Hong’s present production rate is at about 1,000 tonnes per month.
“There are synergies to be derived from this partnership. First, there is the Nutriplus branding, which is well established in Malaysia. Second, Lay Hong has the halal certification, which will allow us to penetrate further into Islamic markets and diversify our customer base,” said NH Foods vice-president and representative director Yoshihide Hata.