GEORGE TOWN: CAB Cakaran
Corp Bhd will spend about RM30mil to diversify into omega and organic chicken production and integrate automation technologies into its operations this year.
Group managing director Chris Chuah started to tap into the premium chicken segment by launching its omega and organic chickens in January.
“With changing consumer tastes and preference for healthier and tastier chickens, we believe the market for premium chickens will continue to increase.
“The new product offers a higher margin and the opportunity to establish a premium market in the Malaysian and overseas markets,” Chuah said.
The group practises poultry welfare, pasture and proprietary feed management to ensure exceptional Omega 3 levels in its chickens.
The group’s Omega 3 chicken products are available in premium and reputable grocers and supermarkets.
“We will expand to the export market once the local market demand is established,” he said.
CAB Cakaran will also use a portion of the RM30mil investment to improve efficiency in the various stages of the value chain in its integration to enhance productivity and reduce the cost of production.
“We will also focus on using automation and new technology in our operations where appropriate and reduce the dependency on labour,” Chuah said.
In the second half of 2022, the group diversified its business into providing drone-related services for the oil palm sector.
“This division contributed a revenue of RM250,000 in financial year 2022 and recorded a loss from operation of RM340,000 due to high startup costs.
“This business is still in its infancy and will need more management effort to build it up,” Chuah said.
“With the expected weaker economic growth rate in 2023, the group is expected to face significant challenges, especially in the supply chain and the continued increase in the cost of production of broilers.
“Besides the significant increase in the cost of raw material for chicken feed, the shortage of labour, the high price to convert the farms from open house to closed house system to comply with local authorities guidelines, as well as the continued export ban on live broilers coupled with the government’s price control policy, will present further challenges to the group.”
In 2022, the group invested RM27.35mil in capital expenditure to focus on ensuring a sustainable supply of chicken products to secure its internal supply chain to meet the demand from its customers.
“The group will continue to deploy resources towards our upstream and downstream business.
“This is such as to upgrade as well as modernise existing open house farms to closed house farms and expand our processed food business,” he said.
According to Cobb Vantress vice-president (Europe, Middle-East and Africa and Asia-Pacific) Pelayo Casanovas, the demand for chicken meat in Asia will reach 154 million tonnes by 2031 and could overtake pork as the number one protein in the region.
“The poultry sector has tremendous potential.
“The forecast for poultry meat consumption is the projected growth of 16% over the next eight years, another 21 million tonnes, which is a tremendous amount of poultry output,” he said.
