GEORGE TOWN: CAB Cakaran
Bhd will spend RM40mil this year to upgrade its poultry farms and value-added food processing plants.
Group managing director Chris Chuah told StarBiz that RM20mil would be for a food processing facility in Nibong Tebal.
“This plant will produce 1,500 tonnes of chicken and beef products when it is completed in June and the group will then have three value-added food processing plants (this year),” he said.
The other two food processing plants have monthly production capacities of 1,100 tonnes.
CAB also has five slaughtering facilities with a combined capacity of 110,000 to 130,000 tonnes per day.
In Singapore, the group has one slaughtering and processing plant with a capacity of 25,000 to 28,000 birds per day.
Chuah said the group was targeting to grow sales by 10% next year.
The group operates medium-sized supermarkets in the country under the brand names of Pasaraya Gading Sdn Bhd and Home Mart Fresh & Frozen.
“The long-term strategy is to build an extensive retail network throughout the peninsula and act as a distribution channel for the group’s products.
“The outlets are strategically situated in areas where competing retail outlets are minimal or non-existent,” Chuah said.
According to Chuah, with economic activities back to almost pre-pandemic levels, the world now faces a slower growth rate compounded with high inflationary pressure and high interest rates.
“The good news for us is that the feed price has been trending downward over the past few months, easing the pressure on the high cost of production experienced previously.
“This has encouraged the production of more broilers, resulting in an adequate supply of chicken in the market,” he explained.
On the removal of price controls and subsidies for chicken, effective from Nov 1, 2023, Chuah said poultry companies will have more flexibility to adjust the selling price based on supply and demand dynamics.
“The current adequate supply of chicken in the market has resulted in lower selling prices for broilers, and this trend is expected to continue into the next quarter.
“However, with the feed price trending downward, the management is confident of maintaining a reasonable profit margin.
“Premised on the above and barring any unforeseen circumstances, we’re optimistic about the prospects over the next quarter,” Chuah added.
According to a recent Statista report, Malaysia’s poultry meat consumption per capita would increase by 7.8 kgs per capita (up 16.97%) within the following years.
Therefore, the consumption per capita is estimated to amount to 53.74 kgs per capita in 2031.
In the latest Rabobank Raboresearch Food & Agribusiness report, the 2024 outlook for the global poultry market is moderately positive, with a forecast of 1.5% to 2% growth.
“Though a decline from the long-term average of 2.5% per year, it’s a sign of recovery from 2023’s 1.1%.
“With declines expected in pork and beef markets, poultry is expected to be the fastest-growing protein in a global animal protein market forecast to grow just 0.4% year-on-year.
“Lower input costs, and therefore lower-priced chicken, should help stimulate chicken consumption in 2024 and accelerate growth in the industry.
“Most growth is expected in South-East Asia, the Middle East, and Latin America, but at below-average levels.
“Producers must keep balancing supply growth with relatively slow demand growth, especially in the United States, Thailand, Indonesia, and more recently in China and the European Union, which have been struggling with oversupply,” the report said.
