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Indonesia Poultry Firm Seeks to Grow in Sulawesi

19 July 2013

INDONESIA - Animal feed and chicken breeder Sierad Produce plans to expand into Indonesia’s eastern region by building a poultry feed factory on Sulawesi in 2014, an executive at the company said.

According to JakartaGlobe, Eko P. Sadojo, a director at Sierad, said the company is keen to expand into Sulawesi, where the raw materials for manufacturing dry poultry feed are in plentiful supply.

The company intends to build a plant that will have throughput capacity of 20 tons of feed per hour. The investment for the plant is estimated at Rp 30 billion (US$3 million).

Excluding the Sulawesi expansion plan, Sierad has set aside Rp 350 billion for investment on Java, where around 60 per cent of the nation’s poultry are raised.

The investment is allocated for funding five poultry farms and one hatchery in Lebak district in Banten as well as four farms in West Java.

Sierad corporate secretary Awi Tantra said the company had prepared 250 hectares of land for the Lebak expansion.

"The development went well. We expect to be fully operational this year," Mr Tantra said.

Sierad Produce booked 20 per cent growth in sales in the first quarter of this year to Rp 1.12 trillion, and is targeting Rp 4.7 trillion by the end of this year.

Despite the solid sales growth however, net income fell 14.7 per cent to Rp 6.97 billion over the first quarter, with no guidance in targeted annual net income provided by the company.

Rising incomes have meant more money for animal protein in the national diet, with chicken appearing more regularly on many Indonesians’ plates.

Sierad’s competitors in the animal feed industry include Charoen Pokphand and Japfa Comfeed. Japfa, also one of the country’s largest chicken breeders, has announced similar expansion plans.

It intends to invest a total of Rp 3.9 trillion this year and next in an expansion of its capacity to produce feedstock and breed day-old chicks to sell on to other farmers.

Sierad Produce shares closed unchanged at Rp 51 on the Indonesia Stock Exchange on Thursday, while Japfa Comfeed was down 0.7 per cent at Rp 1,420.

ThePoultrySite News Desk

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