Lay Hong allocates RM39mil as capex for FY19

KUALA LUMPUR: Lay Hong Bhd has allocated RM39mil as capital expenditure (capex) for the financial year ending March 31, 2019 (FY19) and is to be utilised to increase broiler production.

Group Executive Director Yap Chor How said the integrated livestock farming company planned to increase broiler production capacity to two million birds monthly from the current 1.2 million.

He said the group’s focus in FY19 would include the production of liquid eggs and processed food, for which, Lay Hong has two plants scheduled for operations this year.

“We will have an upcoming liquid egg processing plant and a new further processing plant. Both will be ready by the third quarter of this year, with a monthly production capacity of 400 metric tonnes and 2,000 metric tonne respectively.

“These two plants will keep us busy in FY19 as we work towards achieving full utilisation capacity,” he told Bernama.

He said products for the further processing plant, located in Pulau Indah, were targeted for export (70%) and local consumption (30%). 

Meanwhile, Yap said the group expects its chicken processing division to make a positive contribution as  demand for fresh chicken is higher during the Hari Raya season, thus, fetching a higher selling price.

“However, for the eggs division, we anticipate pressure on the selling price, with lower demand due to the fasting month.

“Nevertheless, for our retail division (G-mart), there will be a historically stronger performance during the Hari Raya season, as previously, this division managed to rake in a 30 per cent increase in overall sales,” he added.

On the implementation of the zero rating for the Goods and Services Tax (GST), Yap said there would be no impact on the egg and raw chicken divisions, as these items were already zero rated.

“Pasteurised liquid egg and further processed products such as Nutriplus Nippon Premium would be six per cent cheaper, thus, giving potential to an upside in demand,” he added. - Bernama