South Korean livestock feed company suspends multimillion dollar Myanmar operation

A South Korean company manufacturing animal feed in a Yangon industrial zone has announced that it will be suspending operations next week. In a letter dated May 17, CJ Feed Myanmar Company Limited informed customers that its factory in Hmawbi Township’s Myaung Ta Kar Industrial Zone would shut its doors on May 28, citing increasing difficulties surrounding financial transactions, obtaining affordable raw materials, and maintaining a workforce. “We will manufacture the feed only until May 28, and after that the factory will be temporarily closed. I don't know how long [the closure] will last,” an official from CJ Feed Myanmar said. A distributor based in Meiktila, Mandalay Region, told Myanmar Now that the company was once considered to be among the top local producers of feed for poultry, but speculated that sales had decreased in recent years. “We stopped using their products when their quality went down,” he explained. CJ Feed Myanmar, a subsidiary of South Korea-based food giant CJ Cheil Jedang, has been operating in the country since 2018, according to its website. The company submitted its initial proposal to the Myanmar Investment Commission one year earlier and invested US$16.7 million in the production of animal feed in Myanmar, and $1.4m specifically for poultry products. It acquired a 70-year lease on more than 12 acres of land in the Myaung Ta Kar Industrial Zone, where it set up its factory. The company had initially proposed hiring nearly 150 employees to produce and sell various types of animal feed from the site. Since Myanmar’s 2021 military coup, observers say that industrial operations have grown increasingly difficult under the junta, particularly due to long power outages. Industrial zones such as the one where CJ Feed Myanmar is located are only granted four hours of electricity from the national grid each day, so factories in these areas have been forced to rely on diesel generators to run machinery. While electricity from the grid costs around 150 kyat ($0.07) per unit, a gallon of diesel fuel—which can be difficult to obtain—can cost more than 10,000 kyat ($4.76). Producing around 10 units of electricity per gallon, this puts the cost per unit at 1,000 kyat ($0.48). The junta’s foreign reserves are also dwindling, and the flow of such currencies is also restricted by the regime. This has been linked to limitations on the imports of raw materials. While many factories under foreign ownership are believed to have shut down throughout Myanmar since the coup, the exact numbers of closures were not known at the time of reporting.

South Korean livestock feed company suspends multimillion dollar Myanmar operation

The major producer of poultry feed is closing its Yangon factory, citing rising costs of raw materials and a shortage of labour

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