Sojitz, Kyodo Shiryo Enter Compound Feed Production and Sales Business in Vietnam
- Responding to Rapid Growth of Demand for Compound Feed for Livestock -
Sep. 5, 2011
Kyodo Shiryo Co., Ltd.
Sojitz Corporation and Kyodo Shiryo Co., Ltd. established a compound feed production and sales company in Vietnam and will enter the feed business there.
The two companies established Kyodo Sojitz Feed Company Ltd. (KSF) in the Ben Luc district of Long An Province, approximately 30 kilometers southwest of Ho Chi Minh City (Sojitz owns 51% and Kyodo Shiryo owns 49%). KSF plans to produce approximately 200,000 tons of compound feed annually and is scheduled to begin operations in April 2013. The total cost of this project is about 2.0 billion yen. This marks the first time that Japanese companies have entered the compound feed for livestock production and sales business in Vietnam.
Compound feed is made of corn, soy beans (meal), wheat, and other ingredients mixed with various feed materials using original technology and expertise to create optimal feed that will promote growth of healthy livestock with high-quality meat. Such feed is essential in Japan, the United States, and other developed countries.
Kyodo Shiryo is a leading Japanese feed producer and has an established reputation for its production know-how. Kyodo Shiryo boasts a major share of the domestic market for swine compound feed and will utilize its technology and expertise to support the production in Vietnam of compound feed that will enable effective and efficient swine farming.
Vietnam’s commercial feed production volume is growing by about 10% annually as demand for meat increases, and national livestock production plan anticipates production to nearly double from about 10.5 million tons in 2010 to 19 million tons in 2020. Pork is the meat of choice in Vietnam and accounts for approximately 70% of all dietary meat demand. The number of pigs raised is 28 million, about three times the number of Japan, the highest level in ASEAN, and the fourth highest in the world. Vietnam has a population of 86 million (according to the April 1, 2009 national census) whose average age is less than 30 years, and even further growth is expected in the future. As a result, both the feed and livestock segments are expected to undergo significant growth.
Sojitz is actively promoting the grain business, a segment that is growing rapidly in Vietnam, based on the port facilities established by Interflour Vietnam (IFV; Sojitz owns a 20% share), a leading flour mill in Vietnam. Sojitz is building a value chain in the food segment through Huong Thuy Manufacture Service Trading Corporation (HT; Sojitz owns a 25% share), a leading food wholesaler in Vietnam, and other companies, and has positioned KSF within that value chain.
KSF has set targets of capturing a 10% sales share in the Vietnamese market that equals to 2 million tons of annual production and sales. The company also plans to sell feed to neighboring countries as well.
Overview of the New Company
|Kyodo Sojitz Feed Company Ltd.
|Sojitz 51%, Kyodo Shiryo 49%
|Production and sale of compound feed, mainly for swine
|200,000 tons annually
|Production scheduled to begin in April 2013
[Map of Kyodo Sojitz Feed Company’s Location]