KUCHING: CCK Consolidated Holdings Bhd
will be investing RM20mil in a new cold room for frozen meat and food products under an expansion project for its Kuching Bintawa factory.
The new cold room measuring 21,506 sq m will more than double the factory’s existing cold room capacity by an additional 5,000 pallets from 2,000 pallets to 7,000 pallets, according to group managing director Tiong Chiong Hiiung.
He said the new cold room will be equipped with an automated storage and retrieval system to automatically store and retrieve goods from defined storage locations to reduce labour requirements.
The building plans for the expansion project have been submitted and are awaiting the approval of the relevant authorities. Tiong said CCK also plans to invest RM8mil in a new broiler farm in Sarawak on land that is to be acquired.
The farm, which will have a maximum capacity of 200,000 heads per cycle, is expected to commence operations by the first quarter of 2026 (1Q26).
The company has planned for another capital expenditure of about RM6.34mil on the digitalisation of the group’s operations and upgrading of digital technologies.
Negotiations with a vendor, Tiong said, are in the final stages to award a RM4mil contract for services to digitalise the group’s current operations and streamline its processes to improve efficiency.
The money will also be spent for the procurement of the necessary hardware to facilitate the upgrading of the digital technologies, such as new point-of-sale systems, new weighing counters and hand-held computers. The entire process is expected to commence in 1Q25 for completion within 24 months.
Tiong said the total capital expenditure of about RM36.34mil for these projects will be funded from the proceeds of RM88.1mil, which will be raised from the proposed sale of CCK’s 26.5% equity interest in PT Adilmart, Indonesia to Astrantia Sdn Bhd.
Adilmart, which is a wholly-owned subsidiary via CCK and CCK Frest Mart (which hold a 96.25% and 3.75% stake, respectively), is involved in the production and trading of frozen food, including sausage and other processed meat, in Indonesia.
Under signed agreements, Astranita will acquire 31,772 existing shares (26.5%) in Adilmart for RM88.1mil and subscribe to 27,047 new Adilmart shares (18.4%) of the enlarged issued Adilmart shares, for RM75mil in cash.
Upon completion of the deals, Astrantia will increase its equity interest to 40%, whereas CCK will reduce its stake to 56.9%, with the balance of 3.1% held by CCK Frest Mart.
Astrantia is a special purpose vehicle company incorporated by Creador V to hold the investment of Creador V and undertake the proposed acquisition of the 26.5% stake in Adilmart and new share subscription of 18.4% in Adilmart.
CCK is seeking the approval of its shareholders on the two proposals (proposed disposal of 26.5% stake in Adilmart by CCK and proposed new share subscription of 18.4% equity interest in Adilmart by Astrantia) at its EGM here on Nov 27.
In a circular to shareholders on the two proposals, Tiong said CCK intends to reward its shareholders with an indicative special cash dividend amounting to RM30mil (4.83sen per share) from the RM88.1mil proceeds.
The balance of RM20.9mil from the proceeds will be set aside for the group’s working capital.
CCK is Sarawak’s largest integrated poultry supplier. Its business comprises four segments: retail, poultry, prawn and food service.
The group operates a wide sales network in Sarawak and Sabah, comprising 66 Fresh Mart retail stores, three CCKLocal supermarkets and six wholesale stores.
The group also has manufacturing and sales operations in Pontianak, west Kalimantan and Jakarta, Indonesia.
On the utilisation of the RM75mil proceeds from new share subscription by Astrantia, Tiong said Adilmart intends to use RM40mil to fund the construction of new manufacturing facilities, RM20mil for purchase of machineries and RM5mil for other costs (motor vehicles and administrative expenses).
“We intend to acquire a piece of land measuring approximately 11 acres in Indonesia for the construction of manufacturing facilities as our current manufacturing plants located in Jakarta and Pontianak have achieved their maximum production capacity.
“These new manufacturing facilities will be used to produce frozen food products, such as sausages, nuggets, burgers, meatballs and other meat products, which are similar to the products currently being manufactured in the existing facilities.
“We expect to double our group’s production capacity and output following the commencement of these manufacturing facilities,” he added.
Tiong said Adilmart plans to purchase and install automated machineries, such as a thermoforming machine, bowl cutter, forming machine and fryer, for about 10 production lines in the new manufacturing facilities.
These production lines are envisaged to have production capacity of between 3,000 and 4,000 tonnes a month. The new manufacturing facilities are expected to have built-up area of 19,200 sq m.
