PETALING JAYA: Leong Hup International Bhd (LHI) has successfully diversified its business into aquatic feed, following the acquisition of a feedmill in Vietnam for a total consideration of RM67.03mil.
The asset, which currently produces only aquatic feed, has the capacity to produce up to 118,800 tonnes of aquatic feed per annum.
In a statement yesterday, LHI said it plans to enhance the asset’s capacity and begin poultry feed production by year-end.
LHI group CEO and executive director Tan Sri Lau Tuang Nguang said Vietnam is one of the group’s burgeoning markets in South-East Asia.
“This acquisition presents us with an opportunity to introduce feed products to capture more pockets of the region’s rising protein consumption and enables the group to strengthen our market position in Vietnam, particularly around the southern region.”
Currently, LHI and its subsidiaries in Vietnam produce a wide range of feed products, including those for parent stock chickens, broiler chickens, layer chickens, colour birds, ducks, cattle, goats, swine and quail.
The production of aquatic feed complements and extends the offerings of the group’s range of feed products offered.
The latest acquisition is expected to further drive LHI’s feed sales volume.
During the fourth quarter of 2019, LHI had reported a 15.6% gain in revenue from Vietnam, against the same quarter in 2018, led by feed sales volume.
LHI Vietnam executive director and CEO Datuk Lau Joo Hong noted that there has been exponential growth from the Vietnam operations since its establishment in 2007.
“Our Dong Nai feedmill, which commenced operation in January 2019, has made significant contribution as we continue to ramp up production on the back of higher demand.
“Following this acquisition and upon installation of an additional production line for poultry feed, the group’s combined capacity in Vietnam is expected to increase by up to 17.5% per annum.
“Hence, we expect to derive synergistic benefits in our feed production by way of cost and capital efficiencies, ” he said.
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