USGC addresses Malaysian concerns about DDGS, prompts new demand

By U.S. Grains Council | November 01, 2018

In 2017, the U.S. Grains Council’s Kuala Lumpur office hosted a promotion program for U.S. dried distillers grains with solubles (DDGS) in the region featuring a highly respected U.S. poultry nutritionist. This effort included travel throughout Southeast Asia to meet with customers in Malaysia, Thailand and Indonesia and discuss DDGS inclusion in poultry diets.

As one of the top five integrated poultry companies in Malaysia, processing three million birds a month, KFC Malaysia was a critical stop. During the Council’s meetings with KFC Malaysia, it was became apparent that a simple misunderstanding was costing U.S. DDGS exporters market share in Malaysia.

Malaysia is one of the highest chicken-consuming nations in the world per capita. However, more than 60 percent of Malaysians are Muslim, meaning that chicken—including that produced by KFC Malaysia—must comply with Halal dietary requirements. Prior to talking with the Council, KFC Malaysia refrained from using DDGS based on the misunderstanding that DDGS contained alcohol or spirits, violating Halal requirements.

The Council was able to clear up this confusion about U.S. DDGS through consultations with KFC Malaysia’s staff. As a result, KFC Malaysia started testing U.S. DDGS in its poultry feed rations in 2017. The Council estimated a 5 percent inclusion in KFC’s local ration would increase DDGS usage in Malaysia by approximately 6,000 metric tons valued at $1.3 million to U.S. exporters.

Thanks to a combination of Council promotion efforts and attractive DDGS prices, purchases from the Malaysia poultry market increased U.S. DDGS sales in the 2016/2017 marketing year.

Malaysia purchased 82,021 metric tons of U.S. DDGS valued at $15.1 million, an increase of 40,000 metric tons valued at $7.3 million from the previous year.

The Council invested $10,000 of MAP funds in its Malaysian DDGS marketing programs, generating a return on investment (ROI) of $730 for every $1 MAP invested.