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Monday, December 8, 2014

CAB on course for RM1bil revenue

GEORGE TOWN: CAB Cakaran Bhd is on track to achieve RM1bil in revenue next year, riding on its intention to tap into the Singapore market and its expansion plans for its poultry farms in the country.
Group managing director Chris Chuah told StarBiz that the plan to acquire a 51% stake in Singapore-based poultry slaughtering house, Tong Huat Poultry Processing Factory, would enable the group to capture both the markets in Singapore and Johor, where the demand and pricing of broiler was steady and stable.
“When the exercise to acquire the 51%% stake for an indicative consideration of RM19.2mil is completed in June 2015, the group will be able to raise its production of broilers to 3.6 million monthly from 3 million at present.
“We expect Tong Huat’s business to generate about 14% of our revenue for the 2015 fiscal year,” he said.
“This acquisition would allow CAB to establish a presence in the Singapore poultry market, which only has seven licensed chicken slaughtering houses.
“Tong Huat has a slaughtering capacity of 500,000 birds per month and holds about 10%–15% of local market share,” Chuah said.
The acquisition of Tong Huat’s stake will be completed via the issuance of new CAB shares and cash payment.
Chuah said the group would spend around RM15mil to RM20mil in 2015 to expand its breeder farms in Juru and Padang Meha, Kedah.
“This will raise the production of day-old chicks to 4.5 million by mid-2015 from about 3.6 million currently,” he said.
Chuah added that the group was also looking at acquiring stakes in a few chicken farms in Johor to expand in the southern region.
For the 2014 fiscal year ended Sept 30, 2014, the group achieved RM11.6mil in net profit on the back of a RM672mil turnover.
“We are confident that the acquisition and expansion plans will carry us close to a RM1bil revenue in 2015.
“In 2016, we should be a RM1bil revenue group,” he said.
Moving forward, Chuah said the group would explore supplying more downstream chicken-based food products to branded fast-food restaurant chains.
CAB currently supplies to a few well-known fast-food restaurant chains in the country.
On its overseas business, Chuah said the group was now in talks with a Japanese company to export halal boneless chicken meat to the country, as it would be playing host to the Olympic Games in 2020.

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