De Heus Animal Nutrition has bought the compound feed operations of Neovia Indonesia, namely PT Welgro Feedmill and PT Wirifa Sakti, from ADM.
The acquired business comprises two compound feed mills located in West-Java and East-Java. It had total sales volume of 125,000 tons last year.
The Welgro and Wirifa feed mills focus on the poultry, aqua and swine feed segments, in the main.
The deal will support the company’s ambitions to become a leading player in the Indonesian animal feed market, and it expands position in key livestock and aqua farming areas.
De Heus entered the Indonesian market in 2018 through the acquisition of PT Universal Agri Bisnisindo (UAB) in Bekasi, West Java.
Animal protein, feed demand
Indonesia’s population is 273 million, making it the largest consumer market for proteins in Southeast Asia. De Heus sees the demand for animal proteins continuing to increase over the coming years due to the growth in disposable income and population as well as the change in consumer preferences.
The company estimates that the size of the animal feed market in Indonesia will increase from 19m tons in 2019 to 22m tons in 2022.
Gabor Fluit, business group director, De Heus Asia, said that since the UAB acquisition, the company has “replicated its successful market approach developed in other Southeast Asian countries, supporting the further professionalization of independent farmers in the local livestock and aqua farming sector with premium-quality animal feed products and practical feed and farming advice. In addition, we have improved production processes, invested in technical training of personnel and started construction of a new production line for aqua and poultry feed at the existing UAB feed mill.”
He also noted the impact of COVID-19 on the feed business with a slight downturn in demand for animal feed the immediate result but said markets are expected to recover over the longer term.