CONSTRUCTION REPORT 2021 – Investments driven by necessity amid Covid challenges

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Stars Food Group will increase the capacity of its chicken slaughterhouse.

Investments in processing this year were driven by necessity rather than growth prospects. Processors and integrators speaking to Asian Meat Magazine said the economic downturn and pandemic continued to affect margins. Most are placing their money on diversification, consolidation of operations, and product innovation.

Thailand grapples with slowdown

In Thailand, several companies invested in new facilities despite the pandemic. Thaifoods will augment its pig slaughtering operation with a new USD 24.5 million facility that can handle 2000 pigs daily. 

Phet Nantavisai

“There will be opportunities for well-organized players with good biosecurity and technology,” said Phet Nantavisai, Executive Vice-President. “With ASF, there will be more consolidation, presenting an opportunity to expand,” he said.   

In mid-2022, Thaifoods will also build a 60,000-70,000 birds/day chicken slaughterhouse in Vietnam.

Chaisaks Ruthtanhashap

Meanwhile, Stars Food Group (SFG) said it will increase capacity of its chicken slaughterhouse from 110,000 birds/day to 160,000 by December. The company seized the opportunity after several processing plants suspended operations due to Covid-19 outbreaks.

SFG will also build an export-oriented chicken slaughterhouse, with a capacity of 120,000 birds/day. Chaisaks Ruthtanhashap, SFG’s CEO said the company hopes to export frozen chicken to China, Malaysia and Cambodia. 

Muted activity

However, overall investment in new processing plants was muted due to Covid-19. Kukrit Areepakorn, Thai Broiler Processing Exporters Association Manager, said that as of September 2021, production capacity at export-oriented chicken processing plants was down 10% due to labor shortage.    

Chej Mektaveekul 

GFPT delayed construction of its new chicken slaughterhouse because of rising production costs and plummeting chicken prices, Veera Titayangkaruvong, Investor Relations Manager said.  

However, automation is on the cards amid labor shortages. Meat technology provider MT Food Systems offered more automation, robotic systems and artificial intelligence to clients, who want less human involvement in food processing, said Managing Director Chej Mektaveekul.  

Processing in South Asia 

Consumer purchasing power dropped considerably in Sir Lanka and is expected to remain below average next year said Neil Suraweera CEO of New Anthoney’s Farms. This pushed companies to look to value-add and product differentiation.

“We invested in secondary processing machines like injectors for marination, not because we see growth but because value addition is the only way out,” he said. 

M A M Fawzan

AEA Machinery International Sales Director, MAM Fawzan, also noted that demand for injectors and tumblers went up this year while investments in primary processing were minimal. 

“The larger integrators are looking at value addition and  marinated products are quite popular. Many are introducing raw, chilled marinated products,” he said. 

In the meantime, players who previously operated in the fresh and live markets are exploring options to get into the processed, frozen chicken market. 

Mr Suraweera explained that due to sudden closures and market volatility, those who were in wet markets for years are now rethinking their strategy. 

From fresh to processed chicken 

This trend was also observed in India. Meyn India Director Mukanjay Singh said the pandemic convinced integrators that the wet market is no longer sustainable.

Consumer awareness about food hygiene has  led to higher demand for processed chicken. “To meet this challenge Meyn offered automatic solutions in evisceration and cut up (ECP) and deboning portfolios.”  

The Indian processed chicken segment is estimated to grow at 10% volume CAGR by 2025. Mr Singh believes that the organized sector is growing at more than 8% yoy. 

Growth in modern grocery retail is expected to rise at a 10.2% CAGR to reach USD 18.7 billion by 2025, which is going to drive the branded poultry segment. 

Change is slow

In Pakistan the outlook is less favorable with many processing plants running at half capacity due to the drop in consumption. 

“The frozen market continues to carve out only 5% share. The conversion from wet to frozen isn’t happening due to taxes imposed on the frozen market,” said Meyn Holland, Area Sales Manager, Karel de Waal. 

 He expects the market to grow once the country enters China through the Belt and Road Initiative and other export programs. 

“It is estimated that export to China could double chicken processing in Pakistan in two years. Potential for conversion from wet to frozen can also be tapped with mounting pressure from the poultry association on the government.”

Ekhlasul Haque 

Bangladesh, also a slow mover in processing, continues to lag. Chicks and Feeds Managing Director Ekhlasul Haque said that over the last decade, Bangladesh only managed to support the growth of 10-12 processing plants. 

Axon Group Managing Director Islam, on the other hand, expects the market to improve in 2022. 

“Looking at our sales volume of raw materials and spices it seems meat producers are looking at expansions.” He noted that this was due to increasing business in the B2B sector during the pandemic.

Indonesia resumes plant construction

 A few meat processors in Indonesia resumed investments after postponing them last year.

Elwein Ng, President Director of machinery supplier Bestworld Perkasa, said that the company started receiving inquiries for nugget and sausage processing machines earlier in the year.

“Setting up a project now is much faster. We just need to explain our technology and negotiate the price,” he said.

Budi Setiadi

Budi Setiadi, Director of Javatec Food Technology, said slaughterhouse investments are predicted to exceed 20% this year due to growth in the downstream sector and the changing market dynamics for processed products.

Javatec is constructing several facilities, 65% of which are poultry slaughterhouses and 35% further processing facilities. 

“This year, we installed one modern duck slaughterhouse and have two ongoing duck projects,” Mr Setiadi said, adding that demand for modern duck slaughterhouses will grow as more restaurants offer duck dishes.

Malaysia hopeful for 2022

While some producers in Malaysia see growth, others see investment opportunities. 

Nestle in Malaysia is poised to supply affordable, commercialized plant-based protein products. It built a new facility within its complex in Selangor. The new wing commenced production of its Harvest Gourmet plant-based products for the out-of-home market and is soon to launch its consumer range. 

Made with ingredients such as soy, wheat, beetroot, carrot, pomegranate and blackcurrant, the products are meat-free, high in protein, and a good source of fiber. 

Meanwhile, Leong Hup International Berhad (LHI) is expanding its The Baker’s Cottage chain. It flagged its ‘Farm-to-Plate’ business model as a key growth pillar. 

Tan Sri Francis Lau

Executive Director and Group CEO Tan Sri Francis Lau said it stepped up investment in the downstream business, particularly in Malaysia and Indonesia. With 95 outlets at the start of 2021, the company is aiming for 160 throughout West Malaysia by yearend.

LHI will also invest USD 20 million in a new slaughtering and processing plant in 2022. 

Sailor’s, a gourmet sausage producer in Malaysia, saw a 50% sales increase locally. “With dining out prohibited, people had more money to buy premium products for home consumption,” said Andrew Tan, General Manager. He added that the company expanded its product lines to include pies with traditional filling, frozen pizza and Cornish pasty. 

Upgrading despite challenges 

With Covid-19 affecting demand many processed meat manufacturers in the Philippines held back on construction and expansion, with some even closing facilities.

In addition, the government issued import bans on traditional suppliers especially of mechanically deboned meat. Meanwhile, the local pig industry’s continuing battle with ASF also affected supply.

Nonetheless, some players did upgrade and built new facilities. Quezon Poultry and Livestock Corp, rebuilt its slaughter and evisceration departments, raising capacity to 4500 birds/hour. It lost out due to foodservice closure, but bolstered sales through B2C sales.

Meanwhile, Biotech Farms Inc, which runs a fully integrated operation out of South Cotabato in Mindanao, has completed construction of its pig slaughterhouse with capacity of 600-800 pigs daily. The state-of-the-art abattoir/packing plant is the latest in the company’s continuing quest to provide quality products.

Covid puts everything on hold in Vietnam

Covid-19 in Vietnam caused many food companies and factories to stop operating.

The Vietnam Association of Seafood Exporters and Producers (Vasep) said that more than 75% of 75,000 seafood processors stopped operation. Meanwhile, more than 1800 slaughterhouses and meat processing facilities in southern Vietnam closed during lockdown.

To continue operating, Mavin Group applied the ‘3-in-place’ (eat – stay – work) program at its factories and farms. The program provides accommodation for workers and office staff. “This helped us maintain production during the pandemic,” Nguyen Anh Tuan, Deputy General Director, told Asian Meat Magazine.

 “We will continue to implement these measures even when the pandemic subsides,” said Mr Tuan.

Due to the pandemic, production cost at both meat and seafood processing industries also increased significantly. John Nguyen, CEO of Godaco, told Asian Meat Magazine that increasing the rate of automation will help reduce these costs anlthough this would mean significant capital expenditure. Automation needs to slide in with the company’s roadmap.“

ADM Food Technology (Pinghu)


Country: China
Project location: Pinghu, Zhejiang province
Project description: A fully automated food flavor production facility
Products produced at facility: Food flavors
Capacity: N/A
Investment: N/A
Equipment supplier: N/A
Completion: September 2021
Comments: The 27,000+ sqm food flavor production facility is strategically located within an hour of Shanghai, bringing geographic advantages for ADM’s customers while providing the company with direct access to top talent. The complex features:
• The latest in automated flavor lines with advanced dosing technology, along with technologies to ensure seamless and efficient management of complex processes.
• Labs dedicated to flavor production, taste design and product development.
• ISO 9001 and FSSC 22000 V5.1 certifications.
• Capability to meet demand for specific dietary needs, including Halal and Kosher certified products.

ADM Pinghu.

AGK Pangan Makmur


Country: Indonesia
Project location: Central Java
Project description: A further processing plant
Products produced at facility: Processed and marinated chickens
Capacity: 5000 chickens/daily
Investment: USD 4 million
Equipment supplier: N/A
Completion: Targeted in 2021
Comments: The facility to meet the needs of its outletsal and Kosher certified products.

AGK Pangan Makmur’s new further processing plant to meet the needs of its outlets.

AOV Agro Foods Pvt Ltd


Country: India
Project location: Central Java
Project description: A further processing plant
Products produced at facility: Processed and marinated chickens
Capacity: 5000 chickens/daily
Investment: USD 4 million
Equipment supplier: N/A
Completion: Targeted in 2021
Comments: The facility to meet the needs of its outletsal and Kosher certified products.

AV Ventures


Country: India
Project location: Haryana
Project description: Poultry and mutton processing project
Products produced at facility: Raw chicken products and goat meat
Capacity: 1500 BPH and 100 goats per day
Investment: N/A
Equipment supplier: Storm
Completion: Work in progress
Comments: The company initially operated in Nagpal Frozen Foods, Barwala, Haryana, a 1000 BPH plant commissioned by RND in 2007. After its closure, they are setting up a new plant at the Panchkula Industrial area. 

Biotech Farms Incorporated


Country: Philippines
Project location: Brgy San Vicente, Banga, South Cotabato
Project description: Better Pork Packing Plant
Products produced at facility: Hogs slaughtering and deboning
Capacity: 600-800 pigs per day
Investment: N/A
Equipment supplier: Renner Schlachthaustechnick GmbH and Gudel intralogestic (Germany)
Completion: Target date of 2021 November
Comments: –

Charoen Pokphand Indonesia


Country: Indonesia
Project location: Bondowoso, East Java
Project description: A new chicken slaughterhouse
Products produced at facility: Carcass and portioned cuts
Capacity: 6000/bph
Investment: USD 14 million
Equipment supplier: N/A
Completion: January 2022
Comments: The new facility is the second chicken slaughterhouse in the province, aimed to absorb chickens to be distributed to their Prima Freshmart outlets and fast-food restaurant chains, McDonald’s and KFC.

CPV Food 


Country: Vietnam
Project location: Binh Phuoc province 
Project description: Project of broiler farming and processing poultry meat for export 
Products produced at facility: Poultry meat
Capacity: 100 million broiler/year
Investment: USD 250 million
Equipment supplier: N/A
Completion: Phase 1: December 2021 (50 million broilers/year); Phase 2: 2023
Comments: The project is an integrated system that produces poultry meat for export to Asian countries.

Gemilang Karya Agri 


Country: Indonesia
Project location: Banten and another location in West Java 
Project description: New chicken slaughterhouse and acquisition/rent of an existing one 
Products produced at facility: Chicken carcass and portioned cuts
Capacity: 2000/bph
Investment: N/A
Equipment supplier: N/A
Completion: Targeted in 2022
Comments: The company is planning to set up a new chicken slaughterhouse in Banten, close to its broiler farm. The company is also looking for an existing chicken slaughterhouse in West Java to be acquired or rent. These facilities are aimed to support its growing trading business.

Chicken carcass from Gemilang Karya Agri.

Khazir Agro


Country: India
Project location: Srinagar, Jammu-Kashmir 
Project description: Poultry processing plant 
Products produced at facility: Raw chicken products
Capacity: 1000/bph
Investment: N/A
Equipment supplier: RND
Completion: Production started in January 2021
Comments: –

Leong Hup Berhad


Country: Malaysia
Project location: Johor Bahru 
Project description: Primary poultry processing 
Products produced at facility: Whole and cut parts
Capacity: N/A
Investment: USD 20m
Equipment supplier: Unknown
Completion: 2022
Comments: To support the growing chain of The Baker’s Cottage in Malaysia.

Malindo Feedmill


Country: Indonesia
Project location: Purwakarta, West Java 
Project description: A new chicken slaughterhouse 
Products produced at facility: Carcass and portioned cuts
Capacity: 3000/bph at first stage can be extended to 6000/bph
Investment: USD 11 million
Equipment supplier: Supplier from Europe
Completion: Targeted Q4 2021
Comments: The new facility is aimed to support the company’s further processing plant with supply of quality chicken meat.

Processed chickens from Indonesia’s Malindo Feedmill.

Nestle (M) Sdn Bhd


Country: Malaysia
Project location: Nestle Shah Alam Industrial Complex (area of 6,000 sqm reserved within it) 
Project description: Plant-protein research and processing factory/lab to cater to Asean market.  
Products produced at facility: Different kinds of plant protein products
Capacity: 8,000 tons per year
Investment: USD 35.89 million
Equipment supplier: Unknown. Latest food processing machinery and highly automated packing lines.
Completion: 2021
Comments: –

Nestle chose Selangor, Malaysia as the location for its manufacturing hub for Harvest Gourmet, as the company said it has the right infrastructure, trade links and access to talent and capabilities.

Mavin Food


Country: Vietnam
Project location: Kontum province  
Project description: Farming and processing meats (pork, poultry) for export.  
Products produced at facility: pork, chicken, and duck meat 
Capacity: 10,000 tons/year 
Investment: USD 28 million
Equipment supplier: N/A
Completion: January 2025
Comments: The processing plant is one of Mavin’s investments in a complex of livestock production for export built in Kon Tum province. Nguyen Anh Tuan, Deputy General Director said the complex includes breeding farms, commercial farms, a feedmill, and a slaughtering and processing plant, with a total investment of USD 80 million. 

Perfect Poultry Products Pvt Ltd


Country: India
Project location: Amritsar city of Punjab  
Project description: Poultry processing line  
Products produced at facility: Fresh chilled & Frozen raw chicken products 
Capacity: 4000/bph 
Investment: N/A
Equipment supplier: Meyn Food Processing Technology B.V.
Completion: Anticipated in Q4 of 2021
Comments: –

Perwiratama Group


Country: Indonesia
Project location: Cianjur, West Java  
Project description: New cold storage facility  
Products produced at facility: The facility will be used to store chicken carcasses and portioned cuts from internal and external parties.  
Capacity: 3000 tons 
Investment: USD 6.4 million
Equipment supplier: 2022
Completion: Anticipated in Q4 of 2021
Comments: The new facility will be divided into rooms with a capacity of 100 tons each. The aim is to prevent product spilling over from one tenant to another.

RFK Greens Pvt Ltd 


Country: India
Project location: Pulwama, Jammu and Kashmir   
Project description: Poultry processing plant  
Products produced at facility: Raw chicken products
Capacity: 2500/bph 
Investment: N/A
Equipment supplier: Meyn
Completion: End 2021
Comments: The plant was ordered in end July 2017 and the installation has been completed. Commissioning expected by end 2021.

Quezon Poultry & Livestock Corp


Country: Philippines
Project location: Quezon Province   
Project description: Processing plant expansion  
Products produced at facility: Whole dressed chicken
Capacity: 4500/bph 
Investment: N/A
Equipment supplier: Marel
Completion: Operational in 2021
Comments: Company now uses Marel’s stunning, killing, scalding and plucking systems. Among the technologies being used are the Nuova CoreTech system, the NIC neck inspection machine, and Marel Compact Grader.

QPLC decided to go direct to end users with lost of some markets. 

RM Delicious Foods 


Country: India
Project location: Panipat city of Haryana State   
Project description: Poultry processing project  
Products produced at facility: Fresh chilled & Frozen raw chicken products
Capacity: 1300/bph 
Investment: N/A
Equipment supplier: Meyn Food Processing Technology B.V
Completion: Anticipated in 1st Q of 2022
Comments: –

RRP Food Limited 


Country: Bangladesh
Project location: Iswardi, Pabna District   
Project description: Poultry processing project  
Products produced at facility: Raw chicken and further processed poultry products  
Capacity: 1300/bph expandable to 2500 
Investment: N/A
Equipment supplier: Meyn
Completion: End 2021
Comments: Both processing and further processing is to take place. Whilst the Meyn processing line is brand new, further processing equipment are refurbished. Turnkey solutions are provided by Chicks and Feeds, Bangladesh. 

SKM Feeds (formerly known as VKS Farms)  


Country: India
Project location: Dindigul, Tamil Nadu    
Project description: Poultry and mutton processing project  
Products produced at facility: Raw chicken products   
Capacity: 8000/bph  
Investment: N/A
Equipment supplier: Meyn
Completion: Mid 2022
Comments: Original capacity of 2000 BPH was commissioned in 2009.  Expansion to 4000 BPH done by mid 2019. Company changed hands in Jan 2015 and became SKM. This has prompted further expansion to 8000 BPH. 

SKM has broiler integration operations and a chicken processing unit in South India.

Stars Food Group


Country: Thailand
Project location: Ratchaburi province    
Project description: Chicken slaughterhouse’s capacity expansion  
Products produced at facility: Chicken meat   
Capacity: From 110,000 birds/day to 160,000 birds/day   
Investment: USD 500,000
Equipment supplier: Machinery from Thailand and China
Completion: December 2021
Comments: The company sees the opportunity to expand because several chicken processing plants have suspended operations due to Covid-19 infections.

Stars Food Group will increase the capacity of its chicken slaughterhouse.

Stars Food Group


Country: Thailand
Project location: Ratchaburi province    
Project description: Export-oriented chicken slaughterhouse  
Products produced at facility: Chicken meat   
Capacity: 120,000 birds/day   
Investment: USD 13.3 million
Equipment supplier: Machinery from China
Completion: The first quarter of 2023
Comments: Stars Food aims to export frozen chicken meat to China, Malaysia, Cambodia, Myanmar and Vietnam as it sees growth opportunities with rising chicken consumption there.

Sailor’s Gourmet Foods


Country: Malaysia
Project location: Padang Matsirat, Langkawi    
Project description: Sausage factory which also produces pies and pizzas  
Products produced at facility: Sausages   
Capacity: N/A (nationawide premium retail sales capacity)   
Investment: N/A
Equipment supplier: N/A
Completion: Additional lines pies and pizza added in 2020, operating in 2021 to full capacity
Comments: The new plant is HACCP compliant and accredited as Sailor’s is also looking to bring their products across the oceans to Thailand and Singapore in the future.

Swami Feeds


Country: India
Project location: Tamil Nadu    
Project description: Poultry processing project  
Products produced at facility: Fresh chilled & Frozen raw chicken products    
Capacity: 3000/bph   
Investment: N/A
Equipment supplier: Marel and Stork
Completion: 2021
Comments: –

Thaifoods Group    


Country: Thailand
Project location: Nakhon Pathom province    
Project description: New slaughterhouse  
Products produced at facility: Pork    
Capacity: 2000 pigs daily   
Investment: USD 24.5 million
Equipment supplier: Machinery from the US and Germany
Completion: The end of 2021
Comments: Thaifoods aims to increase its sales of pork to supermarkets and the foodservice sector while reducing the proportion of live pigs it sells.

The government of Banyuwangi regency


Country: Indonesia
Project location: Banyuwangi, East Java    
Project description: A new slaughterhouse  
Products produced at facility: Fresh meat cuts    
Capacity: N/A   
Investment: Around USD 70,000. But the construction is still waiting for the budget.
Equipment supplier: N/A
Completion: N/A
Comments: The presence of the eight slaughterhouses in Banyuwangi will support the supply of meat in the regency.

Widodo Makmur Unggas


Country: Indonesia
Project location: Cianjur, West Java    
Project description: A new chicken slaughterhouse  
Products produced at facility: Carcass and portioned cuts    
Capacity: 12,000/bph   
Investment: The company has set aside USD 105 million to expand its vertically integrated poultry business this year. Of the funds, some are allocated for the new chicken slaughterhouse.
Equipment supplier: N/A
Completion: Targeted in 2021
Comments: The company’s two other slaughterhouses, located in Central Java, have capacities of 1500 and 12,000 birds/hour, respectively.

Widodo has expanded its poultry integrated operations rapidly with more processing plants for meat and feed. 
Based in Bangkok, Colombo, Ho Chi Minh City, Jakarta, Kuala Lumpur, Manila