Page 17 - MFBD 1920_02Mar2020
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MALAYSIA FOOD BUSINESS DIRECTORY 2019/2020
outlets as a result of promotional activities undertaken to increase sales during the quarter under review.
Group revenue increased by 13.3% in the quarter to RM465.83 million from RM411.2 million in the previous corresponding quarter, owing to strong sales growth in its integrated poultry division. For its full  nancial year ended September 30, 2018 (FY18), CAB Cakaran reported a 49.5% decline in annual net pro t to RM29.39 million, although revenue grew by 17.3% to RM1.75 billion. Despite the challenging landscape, CAB Cakaran is con dent that with its market presence and economies of scale in production, the integrated poultry division will continue to be the main contributor to the group’s pro t. The supermarket division is expected to face intense competition and will most likely continue to undertake promotional activities to maintain its market share.
Analysts are expecting strong recovery in Sarawak’s CCK Consolidated Holdings Bhd’s (CCK) prospects after having suffered from a double whammy in recent times due to a steep decline in egg prices and an increase in feedstock cost.
Established in 1996, CCK is a fully integrated poultry player encompassing feed mill, hatchery, breeder, broiler, layer, slaughtering house and retailing, with all its core chicken products sourced internally. Today, it has a broiler production of 1.5 million birds per month and table egg production capacity of 250,000 eggs per day. Its abattoir, which processes 50,000-55,000 birds/day, is the only poultry abattoir in Sarawak with a Hazard Analysis and Critical Control Point (HACCP) certi cation from the Malaysian government and has also received the halal certi cation by the Islamic Development Department of Malaysia and Sarawak Islamic Council, allowing the group to supply its chicken products to the local and international markets. Being an integrated poultry player allows the company to fetch better pro t margins with less middle-men involved and its focus on East Malaysia also means less competition and better market positioning.
CCK is also set to ride on the gains from the stronger sales growth backed by the expansion of retail stores in East Malaysia the commissioning of a new nugget production line in Indonesia and stronger egg and chicken prices due to tight supplies in local market. In addition, a recent slump in feedstock cost, which mainly consists of soymeal and corn as well as strengthening of the ringgit will help ease cost pressures. The group has set aside an annual capital expenditure of RM2.5 million to RM3 million for the current  nancial year, which is to be internally funded. The funds will be used mainly on replacing old equipment, expanding its retail outlets and building logistics facilities for its chilled and frozen products as well as warehouses.
Meanwhile, DBE Gurney Resources Bhd is partnering Thailand-based Farmmesh Foods Co Ltd (FFCL) to jointly open and operate a trading and distribution agency in Malaysia. DBE Gurney said its subsidiary DBE Poultry Sdn Bhd has entered into a MoU with FFCL, where both companies will be operating the trading and distribution channel in Malaysia through a joint venture company, with 70% ownership by DBE Poultry and 30% by FFCL. The MoU will form another strategic alliance with FFCL to establish distribution and supply chain between Thailand and Malaysia, mainly to import FFCL live chicken from Thailand to Malaysia for processing, as well as distribution of fresh and frozen poultry products in Malaysia. Other trading and distribution channels might also be established between the parties, including but not limited to DBE Poultry feedmill products, HARUMi products and FFCL processed poultry products (fresh and frozen). This strategic alliance will further expand DBE Poultry’s retailing business in poultry products and sustain the group’s business competitiveness locally.
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