PETALING JAYA: Poultry firm LTKM Bhd will spend an initial RM10mil to RM12mil to build a second farm as part of an expansion programme to boost its egg production capacity.
Marketing manager Tan Boon In said the company was in the midst of developing the 97.2ha in Bukit Senggeh, Malacca.
“Currently we are levelling the land. We do not expect any production until the end of this year or early 2007,” he told StarBiz recently.
He said upon completion, the first stage of production for this second farm was 250,000 eggs and this would increase in stages. The new farm is expected to boost the company's daily egg production to 2 million. Part of the land is expected to house a state-of-the-art farm.
LTKM is one of the top three egg producers in the country, with current production of over 1 million eggs per day. Local poultry operators produce about 16 million eggs daily, out of which 2 million are exported to Singapore.
Tan said that to combat cost increases, LTKM would focus on reducing wastage, improving productivity and cost management.
“We also need to have good financial planning to reduce costs. Other than that, we are working to get the most reasonable price for our raw materials,” he said, adding that current feed prices were not as low as levels recorded before the financial crisis in 1997.
He added that LTKM would take advantage of the current strong poultry prices to embark on the expansion plan. In the last five years, the company had not expanded its production or facilities.
Tan said the avian flu was one of the factors influencing the lack of expansion by the poultry industry.
“As long as there is no massive outbreak of the avian flu, the poultry industry should be able to perform well. We also hope the authorities can restrict the free-range, or kampung, chicken to have less contact with wild birds. This method, which is proposed by the European Union, will reduce risks of infection,” he added.
LTKM had taken stringent bio-security measures, including the installation of a closed-house system and strict health screening, to protect chickens from any health risks.
“In addition to the closed-house system, all visitors are allowed to enter the farm only after they have taken a shower and wear safety attire provided by the company.”
Tan also said the prospects for this year would depend on development of the avian flu as well as costs of oil and raw materials, adding that the company was cautiously optimistic on this year's outlook.
For the second quarter of financial year ending March 31, 2006, LTKM posted a net profit of RM5.61mil compared with losses of RM1.02mil in the previous corresponding quarter. Its revenue was also up at RM22.3mil from RM17.9mil before.
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