southeast asia wheat foods industry€¦ · noodles 20% 580 cookies & crackers 20% 580 pasta 4%...

Southeast Asia

Wheat Foods Industry

North Asia Marketing Conference

August 2018

Matt Weimar

Regional Vice President - South Asia

(ASEAN, Sub-Continent, Oceania)

Senior Advisor - Asia

Prepared and Edited by

Joe Sowers

Regional Vice President

Philippines and South Korea

ASEAN GDPPPP(trillion int.

dollars) Real growth rate forecast

GDP

2018 2013 2014 2015 2016 2017 2018

Indonesia 3.243 5.6 5.0 4.9 5.0 5.2 5.4

Thailand 1.229 2.8 0.9 2.9 3.2 3.1 4.1

Malaysia 0.926 5.5 6.0 5.0 4.2 5.0 5.3

Philippines 0.875 7.1 6.1 6.1 6.9 6.7 6.8

Vietnam 0.644 5.2 6.0 6.7 6.1 6.7 6.8

Singapore 0.514 4.7 3.6 1.9 2.0 2.4 3.0

Myanmar 0.331 8.4 8.7 7.3 6.5 6.7 5.9

Source: CIA World Factbook/World Bank

ASEAN Population Growth

Population 2018

(millions)Growth Rate Median age

Indonesia 260,581 0.9% 29.9

Philippines 104,256 1.6% 23.4

Vietnam 96,160 0.9% 30.1

Thailand 68,414 0.3% 37.2

Burma 55,124 0.9% 28.6

Malaysia 31,382 1.4% 27.8

Cambodia/Laos 22,697 1.7% 27.6

Singapore 5,889 1.9% 34.3

Source: CIA World Factbook

Japan 126,451 (0.2%) 46.9

South Korea 51,181 0.5% 41.2

Taiwan 23,508 0.2% 40.2

Philippines Age Pyramid

90%

Philippines/Japan Age Pyramids

90%60%

Growing Prosperity and Urbanization Shifts Appetites

Per Capita Wheat Consumption for Food Use

5

10

15

20

25

30

35

kg/capita Indonesia Thailand Vietnam

Source: USDA/Euromonitor

Up 228%

Up 139%

Up 121% from 1993

0

5

10

15

20

25

30

07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19

mill

ion

met

ric

ton

s

ASEAN Wheat Imports

Source: USDA

14.9 MMT

28.8 MMT

12.3 MMT

0

5

10

15

20

25

30

07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19

feed

food

ASEAN Food and Feed Wheat Use

Source: USDA

77%7.8 MMT

Top Wheat Importers in the World

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

tho

usa

nd

me

tric

to

ns

Egypt

Brazil

Indonesia

Source: USDA, Baseline Projections 2015

Source: USDA: Production, Supply and Distribution

5

6

7

8

9

10

11

12

13

07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18

mill

ion

met

ric

ton

s

Indonesia Egypt Brazil Algeria

Top Wheat Importers in the World

0

2

4

6

8

10

12

14

07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19

mill

ion

met

ric

ton

s

feed

food

Indonesian Food and Feed Wheat Use

Source: USDA

83%4.2 MMT

1970-98

Bogasari, 50%

Others, 10%Nutridon, 2%

WINA, 3%

Panganmas, 3%

Bungasari, 5%

Sriboga, 5%

Pundi Kencana, 6%

Eastern Pearl, 7%

Cerestar, 10%CY 17 actuals

Indonesian Mills• Single mill with ~ 50% market share

– Bogasari also has interest in Eastern Pearl

– Market making price power

• 50% of flour sold at negative margin

• Several balance sheets are weak

– Feed wheat is saving the weakest

– Keeping flour prices low

• 8.8 MMT milling wheat in MY17/18

– 79% utilization

Source: Aptindo

US Sales to Indonesia – all classes

Source: FGIS

0

200

400

600

800

1,000

1,200

tho

usa

nd

met

ric

ton

s

US Sales to Indonesia – all classes

Source: FGIS

0

200

400

600

800

1,000

1,200

tho

usa

nd

met

ric

ton

s

281 TMT

839 TMT

US Sales to Indonesia – by class

-

200

400

600

800

1,000

1,200

2017/182015/162013/142011/122009/102007/08

tho

usa

nd

me

tric

to

ns

SRW

HRW

SW

HRS

Source: USDA Export Sales

8.2 MMT wheat marketSME Ind. HH

1,000 metric tons

5,330 2,460 410

Noodles 1,812 2,140 - 48%

Biscuit/conf. 800 246 - 13%

Baked goods 2,399 74 - 30%

others 320 - 410 9%

share TMT

Australia 47% 3,854

Canada 20% 1,640

Black Sea 15% 1,230

US 13% 1,066

others 5% 410

20

SMALL MEDIUM ENTERPRISE (SME)

BAKERY

• Mixers

Top 10 Customers for U.S. Wheat5-year average

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

MM

T

Source: USDA FAS Export sales data


22

24

26

28

30

kg/capita

Philippines


12

14

16

18

20

22

24

26

28

30

kg/c

apita

Philippines



-10

-8

-6

-4

-2

0

2

4

6

8

10

12

14

16

18

20

22

24

26

28

30

% g

row

th

kg/c

apita

Philippines


and GDP Growth


Philippines: New Capital of Call Centers

• $70 billion - 8% of GDP

• 1.5 million employees• Companies shift facilities from

India to the Philippines

• Proficient English, preferred

accent and customer service

aptitude

• Fast paced, 24/7, commuting

lifestyle

Source: USDA/Euromonitor kg/person/year

100

110

120

130

140

150

160

170

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Philippines Indonesia

Per capita rice consumption

- 50 100 150 200 250 300

Vietnam

Thailand

Philippines

Indonesia

Japan

Brazil

Malaysia

South Korea

Singapore

Mexico

Taiwan

India

China

United States

Iraq

Australia

Canada

Iran

Egypt

Kazakhstan

Wheat Food UseSelected countries

Source: USDA/Euromonitor kg/person/year

- 50 100 150 200 250 300

Vietnam

Thailand

Philippines

Indonesia

Japan

Brazil

Malaysia

South Korea

Singapore

Mexico

Taiwan

India

China

United States

Iraq

Australia

Canada

Iran

Egypt

Kazakhstan

Wheat Food UseSelected countries

kg/person/yearSource: USDA/Euromonitor

-

500

1,000

1,500

2,000

2,500

3,000

2017/182015/162013/142011/122009/102007/08

tho

usa

nd

me

tric

to

ns

SRW

HRW

SW

HRS

Source: USDA Export Sales

US wheat sales to the Philippines:

US wheat sales to the Philippines:

2010/11 through 17/18: 91% average market share

91%

8%1%

Market Share of Philippine Milling Wheat Imports

US Canada Australia

Source: Philippine Census

Philippine Wheat Foods Use

% of total use1,000 MT

(wheat equivalent)

Bakery products* 50% 1,450

Noodles 20% 580

Cookies & Crackers 20% 580

Pasta 4% 120

Others 6% 175

*bakery products detail % of bakery segment

Pan de Sal and derivatives 35% 500

Loaf bread 30% 450

Buns and rolls 20% 300

Cakes and Pastries 10% 150

Chinese products (sio pao) 5% 70

Source: Industry sources

• Consistent, sophisticated market

• Two new mills

• Generational transfer

-

100

200

300

400

500

600

700

2017/182015/162013/142011/122009/102007/08

tho

usa

nd

me

tric

to

ns

US wheat sales to Thailand

SRW

HRW

SW

HRS

• Strong economic growth

• Fast food penetration

• New import infrastructure and mills

• Noodle consumption strong

• US wheat blocked from Dec.’16 – Aug.’17

• Tariff disadvantage to Australia now TPP

disadvantage to Canada

-

50

100

150

200

250

300

2017/182015/162013/142011/122009/102007/08

tho

usa

nd

me

tric

to

ns

US wheat sales to Vietnam

SRW

HRW

SW

HRS

• Home to regional milling companies

• Subsidized “GP” flour – 40% of market

– 1 kg bags only

• GOM maintains informal price control

10

-

50

100

150

200

250

300

350

2017/182015/162013/142011/122009/102007/08

tho

usa

nd

me

tric

to

ns

US wheat sales to Malaysia

SRW

HRW

SW

HRS

Southeast Asia Flour Milling Industry

Philippines 8%

Indonesia 40%

Vietnam 50%

Malaysia 15%

Thailand 5%

- Capacity Change from 2001 through 2011

Annual Regional Milling Capacity Increases by 3 MMT from 2001-2011

Southeast Asia Flour Milling Industry

Philippines 8%

Indonesia 40%

Vietnam 50%

Malaysia 15%

Thailand 5% +39%+40%

+34%

+39%

+0%

Myanmar 109%

- Capacity Change from 2012 through 2018

Annual Regional Milling Capacity Increases by 3 MMT from 2001-2011

and an additional 7 MMT from 2012-2018

Regional milling use up 10.4 MMT from 2001-2018

0

1,000

2,000

3,000

4,000

5,000

6,000

2017/182015/162013/142011/122009/102007/08

tho

usa

nd

me

tric

to

ns

SRW

HRW

SW

HRS

US wheat sales to South Asia

southeast asia wheat foods industry€¦ · noodles 20% 580 cookies & crackers 20% 580 pasta 4%...

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