KFC Holdings (M) Bhd (KFCH) will meet its minority shareholders to explain the rationale behind the group's complex reorganisation exercise before calling an EGM to seek their approval, managing director Johari Abdul Ghani said.
Expressing his confidence that the group would complete the scheme within the stipulated timeframe, Johari said KFCH hoped to call for the EGM in June this year.
Shareholders can then decide on the matter at the EGM to be held after we receive all the necessary (regulatory) approvals, he told reporters after the signing of a contract chicken farming agreement between Ayamas Food Corp Bhds subsidiary Ayamas Contract Farming Sdn Bhd and 66 contract farmers in Kuala Lumpur yesterday.
Johari is also Ayamas managing director.
According to KFCH's earlier statement on the proposed scheme, the exercise was targeted for completion by September this year. News reports also suggested that KFCH had met the Employees Provident Fund over the proposed restructuring scheme.
Under the reorganisation scheme announced in December last year Ayamas would become a wholly owned subsidiary of KFCH, which will in turn become a subsidiary of a new company that would assume Ayamas' listing status via a share swap.
Ayamas will focus on expanding its poultry operation. We are projecting higher demand for poultry products in the coming years, Johari said.
Currently Ayamas commands a 60% market share in Malaysias chilled processed chicken market. The recent acquisition of KFC and Pizza Hut Singapore by KFCH is expected to further boost the current year's demand for poultry products.
Johari said that to meet increasing demand, Ayamas was set to further expand its infrastructure and production capacity over the next couple of years.
We would like to increase fresh bird production to 4 million birds monthly by 2005 compared with 2.8 million currently. The expansion would involve expanding our contract farming activities, he said.
Under the five-year contract agreement signed yesterday, Ayamas will supply contract farmers with 36 million day-old chicks and chicken feed valued at RM160mil per year.
The 36 million chicks targeted for this year represents a 20% increase in production over last years figure.
Contract farmers will be paid based on their performance and the quality of chicken raised. Under the agreement, they would be able to gross about RM1 per bird, Johari said.