Angel Yeast eyes market expansion with US$43.4M Indonesian collaboration

Angel Yeast is partnering with Indonesian agricultural company PT. Tunas Baru Lampung Tbk (TBLA) with a CN¥305 million (US$43.4 million) investment. The company aims to optimize its global yeast production operations and enhance its competitive advantages in the Asia-Pacific markets with the move.

The company will establish a subsidiary in Lampung Province, Indonesia and acquire land to develop yeast production projects.

“Indonesia is the fourth most populous country with rapid economic growth and huge market potential in the future; at the same time, Indonesia is rich in local molasses resources and abundant in energy,” Chen Hongquan, chairman and general manager of Angel Yeast Indonesia Company, tells Food Ingredients First.

“It has signed trade agreements with many neighboring countries and has developed sea transportation, which is conducive to the export of products. The political situation is stable. The partner has rich local molasses resources and good government relations.”

He believes the subsidiary will solidify the company’s presence in Indonesia’s yeast market to address increasing demand, and enhance its competitive edge and long-term profitability in line with Angel Yeast’s strategic goals.

The registration and land transaction procedures are expected to finalize before February 2025.

Uncertainties in the international political and economic policy environment and trade barriers may affect yeast manufacturers’ overseas business, says Hongquan (Image credit: Angel Yeast).Bolstering R&D and digitization

With the investment in Indonesia, the global yeast formulator plans to sharpen focus on R&D with improved product quality and service level, Hongquan tells us.

This involves moves to “contribute food safety and environmental sustainability, and provide consumers with richer, healthier and more environmentally friendly food choices.”

Production digitization, intelligence and greening is another factor it is honing in on, by advocating “production efficiency” and “production process control level”, while also advancing equipment automation and intelligence.

Hongquan also highlights the company’s efforts at technological innovation by “relying on the advantages of yeast technology and products, developing new applications and products, such as special dietary foods and bioenergy.”

Innovation challenges

Hongquan states that yeast manufacturers face some challenges during production, such as the the risk of technological innovation.

“The yeast industry has entered the stage of competition relying on technological progress, and rapid development must rely on technological innovation to cope with it.”

“The countermeasures are to speed up the analysis of the new development direction and trend of the industry, strengthen the basic R&D and applied technology research and focus on the integration of scientific research resources.”

Overcoming trade barriers

According to Hongquan, uncertainties in the international political and economic policy environment, as well as trade barriers, trade conflicts and other factors may affect the company's overseas business.

Angel Yeast’s instant dry yeast provides fast fermentation and long proofing tolerance in bakery products (Image credit: Angel Yeast).He suggests companies to “make full use of the platform of overseas subsidiaries, implement localized operation strategy, strengthen the construction of overseas market teams and respond to the market demand promptly” to overcome these hurdles.

He also believes in obtaining market information timely through market research and customer development and tapping local resources to achieve sustainable overseas business growth.

Business moves

As consumers increasingly focus on natural ingredients and health and seek salt and sugar reduction solutions, the trend is shaping the optimization of fermentation processes. The company uses precise control of fermentation conditions to formulate its yeast extracts for use in clean label food formulations.

In August, the yeast business unveiled an R&D facility Xizang Angel Zhufeng Biotechnology to develop probiotics as part of its biotech transformation strategy. Production will focus on three main industrialized strains — Lactobacillus plantarum S, DB-8 and Streptococcus thermophilus.

The company is also making movies in synthetic biology technology through an “innovative consortium” announced in August that unites universities and enterprises to work toward its advancement.

The company recently expanded into probiotics R&D with a production site in Xizang, China (Image credit: Angel Yeast).“The goal is to establish an integrated industry chain, starting with yeast production and extending through fermentation of raw materials, bio-manufacturing, and product application,”  underscores the yeast firm.

Looking ahead

In the first half of 2024, Angel Yeast reported operating revenue of CN¥7.175 billion (US$1.02 billion), an increase of 6.86% year-on-year, with a total fermentation production of 204,000 metric tons.

The company now plans to elevate brand building by strengthening the “multi-brand strategy led by Angel’s brand to enhance brand value and market influence,” Hongquan shares.

It also aims to “expand the proportion of sales of independent brands in overseas markets and respond to market demand by exploring new directions of service,” shares Hongquan. Meanwhile, it will promote production efficiency and process control level in the direction of “intelligent manufacturing.”

“Additionally, we plan to aggressively penetrate markets in India and Oceania to accelerate our market development and expand our market share,” concludes Hongquan.