On June 2, De Heus Animal Nutrition announced that it completed the acquisition of the compound feed operations of Neovia Indonesia — PT Welgro Feedmill and PT Wirifa Sakti — from Archer Daniels Midland.
With two compound feed mills located in West Java and East Java, Indonesia, and a total sales volume of 125,000 metric tons in 2019, Welgro and Wirifa focus mainly on the poultry, aquaculture and swine feed segments. For De Heus Indonesia, the acquisition is an important step in its ambition to become a leading player in the Indonesian animal feed market, the announcement said.
"After our successful entry into Indonesia in 2018 through the acquisition of PT Universal Agri Bisnisindo (UAB) in Bekasi, West Java, this acquisition will accelerate our Indonesian growth strategy," Gabor Fluit, business group director of De Heus Asia, said. "It gives us an excellent opportunity to expand our position in key livestock and [aquaculture] farming areas, close to our existing and potential new customers."
Fluit added, "We live in turbulent times due to the COVID-19 virus. As a result, the demand for animal feed has decreased slightly. On the longer term, we believe markets will recover. De Heus is a company focused on the longer term and dedicated to bring new technology and real progress to the markets in which we operate by working closely together with our customers."
It is estimated that the size of the animal feed market in Indonesia will increase from 19 million mt in 2019 to 22 million mt by 2022, the announcement noted. Indonesia's current population is 273 million, making it the largest consumer market for proteins in Southeast Asia. The demand for animal proteins will continue to increase over the coming years due to the growth in disposable income and population as well as the change in consumer preferences, De Heus said.
"Since the UAB acquisition, De Heus has replicated its successful market approach developed in other Southeast Asian countries, supporting the further professionalization of independent farmers in the local livestock and [aquaculture] 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 [aquaculture] and poultry feed at the existing UAB feed mill," Fluit said.
Kay De Vreese, president director of De Heus Indonesia, added, "We are very pleased to welcome the Welgro and Wirifa employees as new colleagues to De Heus in Indonesia. We have come to know Welgro and Wirifa as dynamic companies with a focus on continuous improvement, which is an excellent fit with De Heus's company culture.
"The coming year will be an important transition period," De Vreese continued. "We will identify the investments needed in the production processes to improve product quality and increase production capacity. In addition, Welgro and Wirifa will be aligned with De Heus standards, so it will create a strong and unified De Heus organization in Indonesia. We will also continue to assess potential opportunities."
De Heus Animal Nutrition is a family-owned company established in 1911 that produces animal feed in more than 20 countries. It also is active in Eastern Europe, Africa, the Middle East and South America through the export of concentrates and premixes.