Agriculture in ASEAN An Engine of growth In Farming and Agro-Technology hubs
Minister Counsellor Ms. Nina Hvid Talvela
1 INTRODUCTION TO ASEAN
Agenda
2 WHAT CAN THE TRADE COUNCIL DO FOR YOU
3
5 UPCOMING EVENTS
4
THE AGRICULTURAL SECTOR IN MALAYSIA
FINANCING OPPORTUNITIES
ASEAN - One of the fastest growing regions
GDP Growth %
Second fastest
growth market
after China
today
ASEAN
5% in 2017
Steady
growth
The world’s 5th
biggest
economy
2018
-10
-5
0
5
10
15
20
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
ASEAN
Oceania
United States
China
European Union
Growing Wealth in ASEAN leads to new Demands
2% 2% 3% 3% 4% 6% 9% 18%
65%
95% $60.000
Cambodia Myanmar Laos Vietnam Philippines Indonesia Thailand Malaysia Brunei Singapore Denmark
GDP per Capita % of DK
610 mio. citizens with a total GDP on 2.3 trillion US$ GDP per capita is growing rapidly in Singapore, Malaysia, Vietnam, Thailand and Indonesia. Increasing demand for foreign quality products and local food supply
Increase Trade
Growing Middle Class
Innovation
The middle class in Southeast Asia is doubling to 163 million households
Urbanization and increased consumption leads to boom in detail Trade,
Integration in leads to increased trade and growth – Both regional and international
Continous rising wages in China leads to more investments in Southeast Asia
Southeast Asia 2030 plan
Source: McKinsey Global Institute
It is necessary for Southeast Asia to improve productivity through technology and equipment
Danish Export to ASEAN
Consumption of Meat in Asia
Source: Euromonitor
Increase of consumption with the rise of household incomes Malaysia is the country in Asia after Hong Kong, that consumes the most meat per capita. Alongside China, Malaysia consumes relatively more meat than expected considering the average household income.
Meat Production in ASEAN
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2010 2011 2012 2013
ASEAN Meat Production 2010-2013
Beef Pork Poultry15000
15500
16000
16500
17000
17500
18000
2010 2011 2012 2013
Total Meat Production ASEAN in thousand metric ton
Danish companies benefitting from malaysia
• Danish Farm Concept
• Arla Foods
• BM Silo
• SKOV A/S
By The Royal Danish Embassy in Hanoi, June 2016
VIETNAM
Vietnam at a glance Population: ~92 million (2015) - 50% of which is below 30 years Capital: Hanoi (7.1 million) Biggest city: HCMC (7.98 million) Area: 330,972 km2 (~8 x Denmark; 43,000 km2) Language: Vietnamese GDP pr. capita: USD $2,050 (2015) GDP growth: 6.7 % (2015e)
Vietnam’s economy at a glance
Vietnam’s economy has experienced strong growth and an expanding middle class.
the economic growth is expected to remain among the highest in the world.
0
500
1000
1500
2000
2000 2002 2004 2006 2008 2010 2012 2014
GDP per capita (current US$)
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
2010 2011 2012 2013 2014 2015e 2016f 2017f 2018f 2019f 2020f
GDP growth, %
Vietnamese Agricultural Sector
Employs 47% of workforce
Main commodity is rice - 2nd is pig meat.
Enourmeous challenges within food safety
The Vietnamese Ministry of Agriculture and Rural Development has set the following targets in its 2020 strategy: A tenfold increase of livestock population Production of 5.5 million tons of meat by 2020
Per capita meat consumption is expected to reach 56 kg per year
Manufacture 19.2 million tons of animal feed
Opportunities for Danish companies
Supply of high quality and safe food products
equipment/know-how for – dairy/meat/fish processing – pig/cattle/ aquaculture productction – potato production and potato/seed processing – hygiene control and testing
Activities
Strategic Sector Cooperation on food safety management being established Growth Advisor at the Embassy
Malaysia’s Economy
Population:
Capital:
GDP:
GDP per capita:
Inflation:
Comptetion:
Ease of Doing Business:
30 millioner
Kuala Lumpur
327 billion US$
9.767 US$
2.1% (2015)
18.
18.
Real GDP Growth and Per Capita GDP: 2009-2015
Malaysia is the third largest economy in ASEAN
Food consumption in Malaysia
The increased disposable income in Malaysian families are causing changes in consumer behaviour The Malaysian expenditure on food has risen from 800 to 1000 billion since 2009
Per Capita Annual Disposable Income, Spending and Saving Ration
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
Meat Consumption in Malaysia
Beef (Mill. Ton)
Pork (Mill. Ton)
Poultry Meat ('000Mil. Ton)
Value-chain deliveries in Malaysia For Danish Companies
Management
Education and Training
Genetics Nutrition Stable Design
Heating & Ventilation
Abattoir Manure Food
Processing
Malaysia – Food Production Hub
One of the objectives of the Third Industrial Master Plan (IMP3) 2006-2020 is to make Malaysia the “Global Halal Hub” for both production and trade in halal products and services. This market has already created interest among other food producing countries, including both Muslim and non- Muslim countries.
Large focus on
• PFA – Pig farming areas
• Dairy production
• Upgrading machineries, feedmills etc
Product demand on halal
Convenience products Ingredients, additives and functionals
Dairy products
Animal products, cattle and poultry
Animal bi-products
Cosmetics and personal care
3 bil. in EU
30% muslims in 2025
Rapidly increasing
consumption
The muslim economy:
Food deficit
2300 bil. US$
Opportunities in halal production
1 INTRODUCTION TO ASEAN
Agenda
2 WHAT CAN THE TRADE COUNCIL DO FOR YOU
3
5 UPCOMING MARKET STUDY TOURS
4
THE AGRICULTURAL SECTOR IN MALAYSIA
FINANCING OPPORTUNITIES
Case Story: Poultry Production 17 – 18 February 2016
Terengganu
TD Poultry
Danish Delegation
Aumada
Linco Baader
Sanovo
Skov
Xergi
Danish Minister of Food and Environments visit to Malaysia
Forum
Case Story: Pork Production February – March 2016
Penang
Kuala Lumpur (Rawang)
Sarawak
Melaka
Visit
Pig Farms
Abbatoirs
Events
Forums
Case Story: Dairy Production January 2017
Johor
Sabah
Kedah
Visiting
Anchor Companies
Events
Corporate Farming Seminar
Forums
Global Growth
Global Public Affairs
Innovation
Invest in Danmark
Trade Councils services are tailor-made to your needs
Access and growth
on export markets
Understand and
handle risk,
corruption, private/
public stakeholders
and CSR.
Attract foreign
companies to
leading Danish
clusters
Finance and
expertise from
leading innovative
clusters
What do we do?
Proposal
Report Market Study
Visit Next Step
Contract Market Assessment
Partner Search B2B Meetings
Site Visits Contract Agreement
Timeline 0 Year 1 Month 1-3 Months 3-6 Months 6 Months
1 INTRODUCTION TO ASEAN
Agenda
2 WHAT CAN THE TRADE COUNCIL DO FOR YOU
3
5 UPCOMING EVENTS
4
THE AGRICULTURAL SECTOR IN MALAYSIA
FINANCING OPPORTUNITIES
Poultry market
• The Malaysian population is
expected to reach 38.5 million in
2040.
• With a constant chicken
consumption of 40 kg/person, that
would require around 1.5 million
tonnes of chicken.
• However with increasing wealth,
chicken consumption is expected
to grow.
• Currently, Malaysia produce 1.4
million tonnes.
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
1.600.000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Poultry Meat Consumption (Million Tonnes)
Source: Jabatan Perkhidmatan Veterinar & Department of Statistics Malaysia
Poultry Market
• Poultry meat represents 74% of
total meat consumption
• More focus on:
- resource efficiency
- responsible livestock farming
systems
- healthy livestock and people
- knowledge exchange towards
innovation.
Poultry Market
The Proces:
1. Grandparent Farms
2. Parent stock rearing farms
3. Day old broiler chicken
• The broiler grower industry
consists of 2,403 farms in
Peninsular Malaysia,
• Sarawak and Sabah consists of
412 and 157 farms,
respectively
Pork Market • 40% of the Malaysian of the
population consumes pork.
• Annual consumption for Pork
consumers is at 20 kgs per
annum
• Average farms is about 2500
head, with about 150 sows.
• 80% of production happens in
Peninsular Malaysia (especially
Penang, Perak, Selangor,
Malacca, Johor)
Pork market
• Malaysia is largely self-sufficient
(?) …
• Production accounting for 97% of
domestic consumption – tightly
controlled imports
• The government of Malaysia has
an official policy of creating “pig farming areas,”
0
50000
100000
150000
200000
250000
300000
2005200620072008200920102011201220132014
Pork Consumption 2005-2014 (Million Tonnes)
Source: Jabatan Perkhidmatan Veterinar & Department of Statistics Malaysia
Pork market
• A decline in small-scale producers
has created opportunities for
expansion among the larger
established farms.
• Some of those larger farms are
investing in more modern production
facilities with better management
systems.
• Malaysia relies almost exclusively on
external supplies
170000
180000
190000
200000
210000
220000
230000
240000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Output of Pork production (Million Tonnes
Dairy Market
0
200
400
600
800
1000
1200
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Milk Consumption (Million Litres)
0
20
40
60
80
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Output of Milk Production (Million Litres)
The dairy sector in terms of milk production has faced an increase in activity. Output level of 56.59 million litres in 2008 to 75.27 million litres in 2014. Fresh milk output level rise from 20 million litres in the 1970s – more than 75 in 2010s.
Dairy Market
Unequal distribution of activity within Malaysia with Peninsular Malaysia (80 percent of milk output) The majority of the activity is taking place in Peninsular Malaysia, which has grown by 15 million litres in the period 2008 to 2014.
Main areas in Malaysia for opportunities in dairy production are in Johor, Sabah and Kedah.
Dairy Market
• The cattle farming and processing are encouraged by the Government for meat and milk production to meet the domestic requirement as well as for export.
• Opportunities include help to upgrade genetic level of dairy cattle and setting up new dairy cattle breeder and multiplier farms
Dairy Market
• Milk products experience a strong
demand
• In 2014 the consumption of milk
accounted for 566.59 million litres
while the domestic consumption
level accounted for only 65
million litres reaching a self-
sufficiency level of Malaysia at
12.9%.
Embassy Pig Market Access in Malaysia Kuala Lumpur Area
Additive Asia, Agritech Enterprise, Ah Ohn Farm, Bestmeat, Boon Seng Poultry Farming, BP Farming, CEVA
Animal Health, Chau Yang Farm, Chiap Hup Agriculture, Danberg, Deluxe Agriculture, Dindings Farms, E&Y
Farming, Elanco Animal Health, Fijiliam Enterprise, Glenco, Hai Soon Heng, Hipra, Landyork Farming, Lim
Teong Heng Farm, Lim Wah Poo Farm, Low Yong Seng Farm, Rhone Ma, Tai Jong Farm, Tarfu Services,
Terati Agriculture, Ung Ah Kee & Sons, Weely Farm, Wing Hin Agricultural Farm, Yenher Agro
Penang Area
Agritech Enterprise, AKT, Danberg, Dunding Farm, Elanco Malaysia, Fortress Home, Freach Malaysia,
Goh Brothers Farming, K.B. Wong & Brothers, Hai Soon Heng, Lean Chin Farming, Lee Boon Seen Farm,
Liang Kee, Lim Keang Seng Enterprise, Lon Kuang Lu, Sheng Li Farm, SM Livestock, Sungsi Buluh Farm,
Taivet Trading, Thong Huat Farm, Tongshah, Xing Chang Farm
Sarawak
Green Harvest Farm, Farmrite, Heng Feng Industry, Habitat Ressources, Green Breeder, Chian Kefer Farm,
Chian Nyan Farm,Lai Ngit Sen, Farasfuld, Kim Huat Farm, Dream Makers, Pong Seng Farm, Sin Hyan Jin
farm, Jee Chai Farm, Fook Ping, EDS Kensultut, Fui Fatt, Voon Sin Heo, Heo, Kitoone Siong Jan, Tun Fa
Brothers, VR Tradings, Shaun Ang Farm, Sin Yin Yunm Fui Shin Farm, Chai Mai Yaw Farm, Han Joon Farm,
Fortune Trading & Farming, Gold Coin, Asiapac Biotech, Hock Guam Agriculture, Shung Shic Farm
1 INTRODUCTION TO ASEAN
Agenda
2 WHAT CAN THE TRADE COUNCIL DO FOR YOU
3
5 UPCOMING MARKET STUDY TOURS
4
THE AGRICULTURAL SECTOR IN MALAYSIA
FINANCING OPPORTUNITIES
Danish Agribusiness Fund (DAF)
WHY AGRIBUSINESS?
• Denmark is leading within agribusiness
– Agribusiness is 2nd largest export sector
– The industry employs 140,000 people
– Danish agribusiness is leading in
efficient and sustainable use of
resources
• The sector is prioritised by Danish
Government’s “Vækstplan”
Based on Denmark’s strong position within agribusiness IFU will launch Danish Agribusiness Fund I (DAF) during 2015. The government and IFU are planning to commit DKK 300m.
Source: Landbrug & Fødevarer
DAF WILL OPERATE IN EMERGING MARKETS (DAC COUNTRIES)
INVESTMENT STRATEGY
• Share capital and loan(1)
• Investments in the amount of DKK 10m - DKK
100m
• Value creation through active participation in all
stages of investments’ life cycle leveraging IFU’s
extensive emerging market experience
• DAF will be an active minority investor and is
expected to take seat at boards
• Involving Danish investors or suppliers (”Danish
interest”)
• Reducing risk through portfolio across geographic
regions and sectors
(1) Debt will be considered if the project offers a reasonable return and risk relation, and if debt is required in order to achieve the desired equity participation.
- Farm projects (crop farming, animal husbandry)
- Aqua culture (fish farming)
- Cleaning, drying and storage of farm produce
- Food processing
- Food packaging and logistics
- Whole sale and distribution of food
- Processing of offal and by- products from farms and food industries
WHAT MAY BE PART OF A PROJECT IN THE AGRICULTURAL VALUE CHAIN? “FROM FARM TO FORK”
Projects in the early stages of the agricultural value chain
Projects in the later stages of the agricultural value chain
- Manufacturing of farm machinery and equipment
- Manufacturing of machinery and equipment for food
processing industries
- Production of animal feed, vitamins and other feed ingredients
Projects in the supporting industries
EKF offers various finance- and Insurance
opportunities for Danish companies investing abroad
Types of services:
• Working Capital Guarantee
• Capital Expenditure Guarantee
• L/C Guarantee
• Bond Guarantee
• Loans to your customers
Read about all the opportunities on www.ekf.dk
EKF – Danmarks Eksportkredit
Facilitator of Foreign Investment
The Trade Council can help get you funding.
• Foreign Investment
• Private Investment
• Equity Funds
• Foreign Capital Funds
• IG Islamic Bank
1 INTRODUCTION TO ASEAN
Agenda
2 WHAT CAN THE TRADE COUNCIL DO FOR YOU
3
5 UPCOMING MARKET STUDY VISITS
4
THE AGRICULTURAL SECTOR IN MALAYSIA
FINANCING OPPORTUNITIES
Dairy Production Market Study Visit • When
– January 2017
• Key Dairy Hubs
– Johor
– Sabah
– Kedah
• Visit programme
– 9 days
– Forums on Dairy production from farm to fork
– Site visits to potential B2B partners
– Meetings with governmental authorities
– Investment opportunities
Poultry Production Market Study Visit • When
– Spring 2017
• Key areas
– Melaka
– Kuala Terengganu
• Visit programme
– 4 days
– Forums on poultry production from farm to fork
– Site visits to potential B2B partners
– Meeting with DVS
Summary • Individual incoming company visits to Malaysia
• Pipeline 2016 – 2017
• Malaysian Minister visit to Denmark
• Political activitites
• Agromek 2016
Thank you Contact us:
Minister Counsellor Nina Hvid Talvela
[email protected] +60 12 652 2659
Commercial Advisor Jaime Yong
[email protected] +60 12 211 2012
Website: www.malaysia.um.dk
Facebook: Embassy of Denmark in Malaysia
Twitter: DKAMBinMalaysia
The Danish Embassy in Kuala Lumpur 22nd Floor, Sunway Tower 86 Jalan Ampang 50450 Kuala Lumpur +60 3 2032 2001