Malaysia-based poultry producer Leong Hup International Bhd unveiled its plans to set up operations in Cambodia, where it already exports chicks and chicken feed, after successfully raising $247 million from its initial public offering (IPO) on the Malaysian stock exchange.
A Reuters report about the firm’s debut on Bursa Securities last week quoted its chief financial officer Chew Eng Loke as saying that sales of chicks and chicken feed in the Kingdom have been promising and a warehouse is under construction to boost growth.
“Once the sales volume of day-old chicks reaches an adequate scale, we will then establish breeder farms to supply the market instead of exporting from Vietnam,” Chew said.
The majority of chickens in Cambodia are raised in non-commercial farms as family operations. The two main commercial operators in the Kingdom are CP Cambodia Co Ltd and Betagro (Cambodia) Co Ltd – both of which have parent firms in Thailand.
In the company’s release in 2017, CP Cambodia claimed that millions of chickens and egg are raised annually as a source of food in Cambodia.
Tan Phannara, the director-general of the General Directorate of Animal Health and Production under the Ministry of Agriculture, Forestry and Fisheries, said on Sunday that he is unaware of Leong Hup’s proposal to invest in Cambodia.
However, he said the ministry welcomes poultry producers as Cambodia needs more local chicken suppliers to fill existing demand.
Phannara said only 81 per cent of the Kingdom’s total chicken demand is supplied by local poultry producers while the rest needed to be imported from neighbouring Vietnam and Thailand.
“We still have a shortage of supply as we import about 10,000 to 15,000 chickens per day from neighbouring countries to fulfil local demand,” he said, adding that it is a good opportunity for new producers to seize the Cambodian market.
He expressed hope that more competition will benefit end users.
Phannara said a major challenge for poultry producers in the Kingdom is dealing with the high cost of feed due to a lack of raw materials and high electricity prices.
“If producers are able to find lower prices of feed for their operations in Cambodia, I think they will succeed and profit in this market,” he said.