Southeast Asia's tropical climate is perfect for investment in insect farming, and the most used insects for pet food – like the BSF – are native to the region.
The insect ingredient industry in Southeast Asia is buzzing with activity. And it is definitely set to flourish, given the region’s favorable climate for insect farming and the affordable operational costs.
Investments have been pouring into the region. Some of the recent ones include Bunge Ventures, which announced in late June that it is investing in Malaysian black soldier fly (BSF) larvae producer Nutrition Technologies. The investment figure has not been disclosed, but Emma Wardenga, Sales and Marketing Manager at Nutrition Technologies, has told PETS International that it is a “long-term equity investment”, with Bunge looking to support and grow the insect sector in Asia.
Steep rise in capacity
Singapore-based insect farmer Protenga farms its insects in neighboring Malaysia’s state of Johor for both pet food and aquaculture applications. Between 2020 and 2022, its capacity grew ninefold to 3–5 containers of insect products per month. “We expect more stepwise growth in 2024 in production and revenue, with new facilities opening,” says Founder and Chief Executive Officer Leo Wein.
The firm is actively working on 3 new smart insect farm projects for 2024, each producing around 1,700 tons of BSF larvae per year. By 2025, it expects to open an additional 8 facilities.
Yoav Shmulevich, Project Manager at engineering consulting company InsectProjects, believes that the combination of renewable and sustainable technology is attracting many entrepreneurs to the region. His company is based in Israel, but works with several companies in the Southeast Asia region.
Low production costs
Insect ingredient suppliers say that Southeast Asia is definitely the most favorable option for their industry.
It has the perfect climate for breeding and farming tropical insects, and very affordable production costs for the land, labor and energy needed to produce insect ingredients.
Shmulevich says that the energy costs for climate control are typically the highest capital and operational expenditure of insect farming. Therefore, farming in a tropical climate may significantly reduce the costs of running an insect farm.
“The cost basis in Southeast Asia is much better than in Europe or North America. We have a lot of insect companies in Europe, but the production cost basis there is significantly higher – climate costs, general energy costs, land costs and labor costs,” points out Protenga’s Leo Wein.
According to him, the aim of insect providers in the region is to provide a high-end premium product at a competitive cost that allows pet food manufacturers to go mainstream with insect-based products.
To Europe and beyond
Insect pet food is mostly available for dogs, the dominant pet in Europe with a population of 104 million as of 2022. As most insect-based pet food markets and brands are in Europe, this is the majority of the export business for insect producers in Southeast Asia and what they rely on.
“We see the greatest demand in Germany, France, Spain, the UK and Scandinavian countries. Subject to pending regulatory approvals, we should start exporting to those markets by the latter half of this year,” says Protenga’s Leo Wein.
Despite European countries being seen as the most developed and rapidly growing markets for insect ingredients, other countries are also on the radar.
“There are some exciting developments in Australia, New Zealand, Korea and Japan which is increasing demand,” he concludes.
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