CAB Cakaran Corp Bhd managing director Christopher Chuah Hoon Phong.
GEORGE TOWN: CAB Cakaran
Corp Bhd’s integrated food-producing business will take off at the end of 2024 when its new processed food manufacturing plant in Nibong Tebal commences operations, transforming the group into a full-fledged integrated food producer.
The new factory will raise CAB’s monthly food production capacity from 1,000 tonnes to 2,500 tonnes.
CAB has invested RM20mil over the last two years, refurbishing the factory to solidify its food operations from the upstream to the downstream.
“The processed food division will contribute some 10% of its overall profits next year,” CAB managing director Chris Chuah said, adding that existing clients and the new overseas markets would take up the increased food capacity.
“Demand for our food products is presently not the concern. Once our Nibong Tebal factory commences, we hope to scale up and achieve full capacity within two to three years,” he said.
On the upstream, CAB has established itself over the decades as an integrated poultry producer, producing six million to 6.5 million birds per month presently.
About 10 years ago, CAB started moving downstream, using its livestock to produce processed and frozen food products.
These products, such as sausages, chicken nuggets and meatballs, are available nationwide in major supermarkets.
CAB is already producing food products in two plants in Melaka and Segambut, Kuala Lumpur. It owns the Farm Best Food Industries Sdn Bhd plant in Melaka and the Kyros Food Industries Sdn Bhd factory in Segambut.
CAB took up a 55% stake in Farm’s Best Bhd in 2016 for RM5.2mil. It currently operates medium-sized supermarkets under Pasaraya Jaya Gading Sdn Bhd and Home Mart Fresh and Frozen Sdn Bhd
These outlets are located predominantly in Penang, Kedah and Pahang. It currently has a total of 11 outlets, which are located in Kuantan (four), Kelantan (two), Penang (one) and Kedah (four).
“We have been running the supermarket business for about 10 years. By the end of this year, we are looking to break even.
“So next year, we will have our maiden contribution from the supermarkets,” said Chuah.
He added that the group’s long-term strategy is to build an extensive retail network throughout the peninsula.
“Malaysia is a crucial distribution channel for our products. We see many synergies opening our supermarkets as we sell our products,” said Chuah.
CAB will open another four to five outlets this year, injecting RM1.5mil to RM4mil into the business.
“Ultimately, CAB would like to open 100 to 150 outlets that will serve also as distribution points for its growing food processing business,” he said.
On its Indonesian venture with its partner Salim Group, Chuah said the project would kick off this year after a six-year hiatus.
Salim is a substantial shareholder of CAB, with a 15.2% stake in the company.
“We have identified a site in Pulau Bulan, Indonesia, for the integrated poultry operations. Construction works will likely start in the first quarter of 2025,” he said.
The Salim Group is Indonesia’s largest conglomerate. Within the food industry, Salim’s assets include Indofood Sukses Makmur, the world’s largest instant noodle producer, Indomaret, Indonesia’s largest convenience store chain and Bogasari, Indonesia’s most prominent flour miller.
“We envision that the Indonesian market will be an important contributor to our revenue over the next five to 10 years, driven by poultry and food products,” Chuah added.
