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Leong Hup acquires aquafeed mill in Vietnam

Leong Hup International will acquire an aquafeed mill in Vietnam, including the plant, equipment, machinery and vehicles, for MYR67.03 million (US$15.8 million).

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Company plans to begin poultry feed production at the facility by the end of 2020

Leong Hup International will acquire an aquafeed mill in Vietnam, including the plant, equipment, machinery and vehicles, for MYR67.03 million (US$15.8 million).

The newly acquired feed mill is located within the Mekong Delta region. It currently produces only aquafeed, with a capacity of 118,000 metric tons per year. The company plans to begin poultry feed production at the facility by the end of 2020.

“Vietnam is one of the group’s burgeoning markets in Southeast Asia and we continue to sharpen our focus on expanding our growth in this region,” said Tan Sri Tau Nguang, CEO of Leong Hup, in a press release. “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.”

Leong Hup is one of the largest fully integrated producers of poultry, eggs and livestock feed in Southeast Asia, according to WATTAgNet’s Top Poultry Companies database. It is present in five countries: Malaysia, Singapore, Indonesia, Vietnam and the Philippines. The company produces feed, parent and grandparent stock, broiler farms, table eggs and processed food products.

For the fourth quarter of 2019, the company reported a 15.6% gain in revenue from Vietnam compared with the previous year, led by feed sales volume. The company said this acquisition would further drive its feed sales volume.

“The group has seen exponential growth from its Vietnam operation since its establishment in 2007,” said Datuk Lau Joo Hong, executive director and CEO of the company’s Vietnam operations. “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.”

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