JAKARTA -- Indofood Sukses Makmur, Indonesia's top food company, has agreed to form a joint venture with Brazil's BRF, the world's largest poultry exporter. The endeavor will focus on poultry and processed food.
The 50-50 venture will invest $200 million over the next three years, BRF said Friday in a news release.
The move marks BRF's entry into Indonesia. The Brazilian company, which exports meat and frozen food to 110 countries, aims to tap the Southeast Asian nation's rapid consumption growth via Indofood's archipelago-spanning distribution network. BRF's export business generated 44% of its 2013 revenue, which came to 30.5 billion real ($11.5 billion).
Through the joint venture, Indofood, led by tycoon Anthoni Salim of the Salim Group conglomerate, is entering the poultry business. Indofood's core business is instant noodles, which dominates the domestic market. But the top player in the poultry and processed chicken market is Charoen Pokphand Indonesia, the local unit of Thailand conglomerate Charoen Pokphand Group. Indofood aims to grab market share from CP by bringing in technology and knowhow from Brazil, one of the world's largest exporters of chicken.
Indofood has been expanding its food and beverage portfolio in recent years. It launched a takeover of Singapore-listed processed vegetable producer China Minzhong Food last year and established a beverage joint venture with Japan's Asahi Group Holdings in 2012.