Poultry Company Expects to Return to the Black

MALAYSIA - CAB Cakaran Corp Bhd is projecting a single digit percentage growth in sales, improvement in margins, and a return to the black for the 2013 fiscal year ending in September 2013
calendar icon 12 August 2013
clock icon 3 minute read

According to The Star Online, group executive director Chris Chuah expects the second half of the group’s 2013 fiscal year to perform well as the prices of live chicken were improving.

The price of a live chicken per kg is now hovering between RM4.80 per kg to RM5 per kg, about 20 per cent more than a year ago, when prices were down.

Mr Chuah told StarBiz the group’s 2013 fiscal year revenue should hit about RM600mil.

Of this, the contribution from broiler meat would be around 70 per cent, with the remaining 30 per cent generated from the processed food and retail chain business.

"The oversupply situation the poultry industry faced last year has now eased, as chicken meat from China coming into Malaysia has halted due to the bird flu outbreak.

"In fact there is a shortage of chicken in the market, as the haze has impacted the growth of chicks, resulting in high mortality rates.

"The combination of these circumstances have created a shortage of chicken, causing chicken prices to rise," Mr Chuah added.

For the six months of CAB’s 2013 fiscal year ended March 2013, the group posted a pre-tax loss of RM1.6mil on the back of RM287mil, compared to a RM5.9mil pre-tax loss and RM267mil revenue achieved in the same period a year ago.

Mr Chuah said the cost of rising feedmill had also impacted on the cost of rearing chicken.

"The rise of the greenback against ringgit means that imported feedmill is now more expensive.

"The cost of rearing chicken has now increased, which will be passed to the customers," he added.

Mr Chuah said the group was targeting to sell 3.8 million live chickens per month.

The company is selling three million chickens presently.

"There are approximately 43 million to 50 million chickens sold per month in the country," he said.

According to Mr Chuah, the group’s RM40mil integrated automated poultry processing plant in Sungai Petani would start operations later in 2013.

"The new 120,000 sq ft facility, located on a 8.9-acre site, would enable the consolidation of broiler meat processing activities currently done in Kuala Lumpur, Bukit Mertajam, Alor Star, and Langakwi in a single location, allowing economy of scale production," he said.

On CAB’s processed food business, Mr Chuah said the exports of processed fish and cooked chicken food items to the Middle-East, Hong Kong, and Vietnam in the second half of 2013 was improving over last year’s similar period.

"We will set up two more Pasar Raya Jaya Gading supermarkets in Padang Serai and Kelantan later this year.

"We are also increasing our supermarkets to seven from five presently, which are located in Penang and Pahang," he said.

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