Invivo NSA has acquired Indonesia layer feed producer Welgro. The company aims to grow its presence in the burgeoning Indonesian layer market.
Driven by a growing population and middle class looking for alternative protein sources, the country’s poultry market has grown by 26.7 percent (CARG) between 2011 and 2015, states a FoodTechIndonesia report. Of this expansion, egg production proves to be on an upward trend.
“The current population for layers in Indonesia is close to 150 million hens and current egg consumption is around 100 eggs per year per capita,” reports Hubert de Roquefeuil, CEO of InVivo NSA. “Eggs are a cost-effective protein in developing countries. The actual market is still 90 percent a ‘fresh market,’ with the concentration of populations in big towns. We can assume that modern markets will develop with other customer and regulatory requirements, allowing the best players to create value. In addition, there is still a lot of development expected for powder and liquid egg consumption.”
“We expect [Indonesian production to] reach 200 million layers in less than five years,” he says.
The need for feed
The Indonesian Feed Millers Association (GPMT) forecasts animal feed production in the country to increase by 12 percent (16.8 million tons) in 2015. According to Roquefeuil, based on 2014 data, the Indonesian feed layer market represents around 5 million tons of this production.
“InVivo NSA is already a major player in Vietnam; the Welgro acquisition is also strengthening our footprint in Indonesia,” Roquefeuil said. “The operation allows us to better balance our footprint between the species which we are addressing: pigs in Vietnam; poultry in Indonesia; and aquaculture in all Asian countries.”
The Jakarta-based Welgro plant has a 150,000-ton production capacity operated by a staff of 110 employees. According to the company, Welgro poultry feed brand is known for its quality and “strong trademark, Geland Merah.”
This recent purchase supports the company’s 2013 opening of a plant in Surabaya, Indonesia. Such purchases align with the company’s strategy to “accelerate the development of its complete feed range in Indonesia and strengthen its market share.”
“We provide internal knowledge regarding raw material qualification,” Roquefeuil says regarding what Invivo can deliver to Indonesian producers. “Our know-how relies on protein and restrictive amino acids management and feed particle size management. InVivo NSA can also offer feed additives inclusion for increasing productivity and improving health of layers.”
Invivo's footprint in Asia
Invivo NSA has been operating in Indonesia since 1983. It currently employs roughly 400 people and operates three complete feed plants serving the poultry and aquaculture sectors.
Asia is one of Invivo’s high-priority investment areas. Over the past two years, it has made major capital investments in Vietnam, Indonesia and the Philippines, including new plants and a river loading facility as well as ongoing construction and acquisition projects.
Indonesia is the largest country in Southeast Asia with the strongest economy in the region, growing more than 6 percent year over year.