Lay Hong partners NH Foods to expand meat-based business abroad

KUALA LUMPUR: Integrated poultry company Lay Hong Bhd plans to set up a plant in Selangor and will have its first Nippon Nutriplus product in Malaysia by mid-year, following its joint venture (JV) with NH Foods Limited.
Lay Hong executive director Yap Chor How said the JV is expected to increase its profitability and expand its product presence by leveraging on NH Foods’ research and development (R&D) and manufacturing skills.
“Lay Hong and NH Foods recognise that the proposed JV would greatly benefit both parties and we have agreed to undertake the project where our joint expertise, knowledge, market shares and resources could be synergised to maximise its full potential with mutual confidence, co-operation and for mutual benefit,” he said at the signing of the JV agreement yesterday.
Under the JV agreement, a private limited company named NHF Manufacturing (Malaysia) Sdn Bhd will be established with an initial authorised share capital of RM30 million divided into 30 million shares.
NH Foods and Lay Hong will hold 51% and 49% stake respectively. Lay Hong expects to fund its portion for the JV company via internally-generated funds, bank borrowings and/or additional funds to be raised from the capital market.
The initial four directors of the JV company will be Ryuichi Nitta, Gaku Okada, Yap Chor Wen and Chor How. Both Lay Hong and NH Foods will have the right to appoint and remove up to two directors in the JV company.
The JV company will manufacture, market, distribute and sell processed meat-based foods which are made from raw materials, or mixed raw materials and ingredients (known as further processed foods).
These products will be marketed under the brand name Nippon Nutriplus.
In the JV agreement, Lay Hong and/or its affiliates has a right of first refusal to supply all raw materials required in respect of the production of the further processed foods of the JV company.
NH Foods vice-president and representative director Yoshihide Hata said the JV will complement its existing business portfolio and enhance its business presence in Southeast Asia.
The group, which is Japan’s largest food company, has a presence in China, Taiwan, Thailand, Vietnam and Singapore.
Besides contributing its R&D and manufacturing skills, NH Foods will also be responsible for the sales and export of further processed foods to the overseas markets including Singapore and Japan.
Meanwhile, Lay Hong will be responsible for operational matters and distribution of products.