Feb 24 (Reuters) - Prized in China for isalleged health benefits for hundreds of years, nests made fromswiftlets' saliva are being mixed into coffee and cereal as theSoutheast Asian producers of the delicacy seek to broaden itsappeal, and their profit margins.

The nests are among the world's most expensive foods,selling for up to $2,500 a kg and the swiftlets that weave themare indigenous to Indonesia, Malaysia, Thailand and Vietnam.

China consumes almost 90 percent of all bird's nests,traditionally eaten in soup, creating an industry that last yearrecorded $5 billion in sales and which executives expect todouble by 2020.

Companies such as Malaysia's Swiftlet Eco Park, one of thecountry's largest developers of swiftlet houses, want biggergains by expanding their product line and market beyond China,where importers can often dictate the price.

"Ask anybody in the industry where is your market andthey'll say China and Hong Kong. Everybody is going there," saidGroup Managing Director Loke Yeu Loong. "We are looking at newmarkets, but if I sell raw bird's nest to Europe or India, theydon't even know how to cook it."

Swiftlet Eco makes coffee, skin care, puddings and candieswith bird's nest. Loke declined to give specific sales figuresbut said the profit margin on some of these products was 10times more than the raw nests.

The company is also spending big on marketing bird's nest asa health food in the Middle East, Europe and the United Statesand plans to raise about $30 million through an initial publicoffering and New York listing in the third quarter of this year.

Southeast Asian swiftlets' nests are particularly popular inthe Lunar New Year festivities, which began in China last week,and are believed to be rich in nutrients that can helpdigestion, raise libido and improve the immune system.

Malaysia is the world's largest producer of raw nests afterIndonesia.

Lee Kong Heng, president of the Malaysian Federation ofBird's Nest Traders Association, says marketing bird's nest as asupplement would attract younger, wealthier and morehealth-conscious consumers worldwide.

Vietnam's largest birds' nest producer Yen Viet Joint StockCo. is also keen to play up the benefits of the delicacy. Thecompany makes cereals and porridge and is investing intoscientific research in a bid to increase global sales, saidChief Executive Dang Pham Minh Loan.

Malaysian bird's nest producers are well placed to market tothe majority Muslim Middle East because the nests are halal, ora food permissible under Islam, Swiftlet Eco Park's Loke said.

With more research, he hopes birds nest will become a globalphenomenon. "We can conduct research and prove the benefit ofconsuming bird's nest scientifically," he said.($1 = 3.5815 ringgit) (Additional Reporting by Mai Nguyen in HANOI and FransiskaNangoy in JAKARTA; Editing by Miral Fahmy)