USGC: KFC Malaysia testing US DDGS

By U.S. Grains Council | May 19, 2017

Nobody does chicken like KFC. And U.S. distillers dried grains with solubles (DDGS) are a healthy, cost-effective and culturally-appropriate feed ingredient for those chickens and others produced in Malaysia, as local nutritionists have learned through outreach from the local U.S. Grains Council office.

In 2016, USGC’s Kuala Lumpur office arranged a DDGS roadshow featuring Park Waldroup, a poultry nutritionist with the University of Arkansas. 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 3 million birds a month, KFC Malaysia was a critical stop. However, while discussing the supply and demand status of U.S. DDGS and its effective use with buyers at the company, Waldroup and the USGC team learned of a misunderstanding was costing U.S. producers 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 USGC, KFC Malaysia refrained from using DDGS based on the misunderstanding that DDGS contained alcohol or spirits, violating Halal requirements.

USGC and Waldroup were able to clear up this confusion during the consultation and follow up conversations. As a result, KFC Malaysia started testing U.S. DDGS in their poultry feed rations in December 2016. USGC estimates a 5 percent inclusion in KFC’s local ration would increase DDGS usage in Malaysia by approximately 6,000 metric tons.

And KFC is not alone. Thanks to a combination of USGC activities and attractive DDGS prices, purchases of the Malaysia poultry market are driving U.S. DDGS sales up in the 2016-‘17 marketing year. Malaysia purchased 51,646 metric tons of U.S. DDGS valued at $9.9 million from September 2016 through March 2017, an increase more than 132 percent from the same time period the year prior and already exceeding overall purchases for the last three marketing years.

The U.S Department of Agriculture expects this positive trend to continue, stating in a May 4 Global Agricultural Information Network report, “The competitive price of DDGS will spur further imports into Malaysia as it is an excellent, nutrient rich feed ingredient in livestock and poultry feed rations. In 2017-‘18 export sales to Malaysia could reach up to 80,000 tons valued at $14 million.”

Those sales - and future growth potential—are indeed finger lickin’ good.

Read more about USGC’s work in Malaysia here.