Flourishing in poultry

Teh: We are operating within a circular economy here.

WITH Malaysia importing about RM72bil worth of food annually, there is room for local producers to play a bigger role in food security, particularly in poultry and processed food products.

Malayan Flour Mills Bhd (MFM), which is involved in flour milling and grain trading, is now having its eye on the poultry market.

The company already has a presence in the poultry business but is looking to double its poultry processing capacity and expand into new food segments.

This will be part of a broader strategy to strengthen Malaysia’s domestic food supply and develop a more competitive regional food business.

Speaking to StarBiz 7, executive deputy chairman cum managing director Teh Wee Chye says the group has plans that include climate-controlled poultry farms, additional grain storage, expanded food processing facilities and a potential shrimp-farming venture.

“The reason why we are in the poultry business is because the consumption capita is 54kg in Malaysia. In the fisheries sector, the consumption per capita is 51kg. We are operating within a circular economy here. The flour goes into the making of fish and poultry feed,” he said.

Teh explains that in the poultry segment, 30% of its by-products are recovered, like blood feathers that are high in protein and amino acids which can then be used in feed.

“If done properly, we can save on the imports of other protein raw materials and supplement soya meal which is by far, the largest import,” he says.

The group’s primary processing plant currently handles about 200,000 birds daily, with the group targeting an increase to 400,000 birds a day.

For its shrimp farming operations, Teh says they are working with some companies in China, with initial work focused on testing feed formulations and developing a proof of concept for the proposed farming model.

The group has already tested the proposed shrimp feed and is working towards establishing whether the farming system can be successfully replicated under Malaysian conditions.

To support higher production, the group is also working with its joint-venture partner Tyson Foods to introduce a new generation of climate-controlled poultry farms in Perak.

The proposed closed-house facilities, measuring approximately 200m by 18m, can accommodate up to 52,000 broilers each, compared with around 20,000 birds in conventional open-house farms.

Teh says the shift towards climate-controlled farming was becoming increasingly important as extreme weather conditions can affect poultry growth rates, productivity and consistency.

“With climate control and precision farming, you can use a phone to check the temperature or humidity in the chicken house. Three days before you harvest the chicken, the technology will tell you the weight and uniformity of the birds,” he says.

MFM already has an established customer and distribution network, supplying poultry to major food-service operators including KFC, Texas Chicken and McDonald’s.

Beyond these customers, the group distributes its products through supermarkets, hypermarkets, hotels, restaurants and cafés, providing an existing platform for its planned expansion into ready-to-eat (RTE) and other processed foods.

To support the group’s plans, Teh says larger storage capacity, efficient logistics and greater flexibility is needed.

At its integrated food complex in Perak, the group is adding 60,000 tonnes of silo and storage capacity to its existing 115,000 tonnes, with a subsequent phase expected to bring total capacity to 208,000 tonnes.

The storage expansion is targeted for completion in 2028 and is expected to support higher production volumes while allowing the group to procure raw materials in larger quantities.

This is important because wheat accounts for more than 80% of raw-material costs in its flour business, while corn and soya meal can account for up to 70% of costs in poultry operations.

Teh says the group sources these commodities from the United States, Canada, Australia, Russia, Ukraine and South America, among others.

“One of our key logistical advantages is the jetty infrastructure, which allows us to receive large vessels that carry raw materials. The Lumut Maritime Terminal is in the process of constructing a new jetty which will become a major liquefied natural gas (LNG) terminal,” he says.

The new jetty can hold up to 60 vessels a year.

“This will be a big thing as 53% of power generation right now comes from coal and due to that, the government is moving towards LNG,” he says.

Teh says the group also sees RTE as a strong avenue for growth.

The group is developing a new RTE and further-processing plant in Manjung, Perak, which is targeted to be ready in 2028.

Its existing processed food range includes nuggets and other frozen poultry products, while its satay offering, marketed as a heat-and-eat product, is already available through selected retail outlets like Lotus and Aeon.

“Something we have noticed is, millennials work hard to climb the corporate ladder. This also means they have less time to cook. Here is where we see potential. If we can make our RTE taste good, nutritious, and safe, the kitchen won’t be popular in the future,” he laughs.

MFM is also exploring product development with a foreign multinational food company, with potential offerings including frozen dough, premixes and other flour-based products.

Teh reckons these products could support demand from the growing café and coffee culture in Malaysia and Vietnam, while opening opportunities in other Asian markets.

Meanwhile, he says MFM is considering an expansion of its southern Vietnam mill to support demand.

Both its flour mills in Vietnam are operating at full capacity, with its mill in Ha Long Bay being expanded from 2,000 tonnes of wheat per day to 2,500 tonnes by 2028.

The group is also in Indonesia but Teh said the country does not have the most suitable environment for now.

He acknowledges that the group is rapidly expanding but is confident about its growth strategies.

“Our long-term growth will depend on how effectively we can translate our integrated food strategy into additional production capacity, more efficient operations and sustainable demand.”

And for Malaysia, MFM’s plans could be a small part of the food security solution it needs.