CCK building factory, logistics centre in Indonesia

The proposed complex will comprise a chicken abattoir, a cold room and downline food processing of sausages, burgers and meatballs, according to group managing director Tiong Chiong Hiiung.

KUCHING: Integrated poultry firm CCK Consolidated Holdings Bhd is embarking on a major expansion in its Indonesian operations, with the construction of a new factory and logistics centre in Pontianiak, West Kalimantan.

The proposed complex will comprise a chicken abattoir, a cold room and downline food processing of sausages, burgers and meatballs, according to group managing director Tiong Chiong Hiiung.

Tiong said the new facilities are currently under construction and they would be completed within this year.

CCK group is involved in retailing and poultry farming.

Its fully integrated supply chain consists of feed mill, breeder farms, hatchery, layer and broiler farms, abattoirs and retail stores located mainly in Sarawak and Sabah.

Pontianak is CCK group’s first regional expansion which initially produced chicken hot-dogs and burgers, followed by the set-up of several retail stores.

From Pontianak, the group stepped up its regional expansion when it acquired a RM10mil warehouse in Jakarta, the Indonesian capital, about eight years ago. The warehouse was turned into the group’s logistics centre for manufacturing and retail business.

Tiong said the Indonesian operations contributed 16.2% to group revenue of RM651.3mil in financial year (FY) ended Dec 31,2019, up from RM614.8mil in FY2018. The group’s pre-tax profit rose nearly 25% to about RM42.9mil from RM34.4mil.

“Chicken prices in Indonesia in 2019 were generally lower than in 2018, ” Tiong said when reviewing the group’s yearly performance in the company’s 2019 annual report.

Last year, the group further expanded its retail network, with the opening of new stores in Sibu Jaya and Permai in Sibu; BDC Commercial Centre in Kuching; and Limbang in Sarawak; as well as Sandakan in Sabah; and the Federal Terrority of Labuan.

To improve the network’s efficiency, it shut down two retail stores – Putatan in Sabah and Sungai Merah in Sibu.

The group owns 62 retail stores in Sarawak and Sabah.

Freshly dressed chicken and chicken parts made up about 60% of the stores’ products while the remaining 40% comprise frozen products, table eggs as well as fresh fruits and vegetables.

The group is also involved in the culturing and selling of black tiger prawns and vannamel.

Tiong said due to the adverse impact of the Covid-19 pandemic, the group had put on hold the plans to set up a supermarket each in Sibu and Kuching. They were initially planned for the second quarter of this year.

“The group will now proceed with the planned (supermarket) projects once the situation is stabilised, ” he added.

According to Tiong, despite being an essential industry and required to continue operations during the movement control order, CCK group’s business had been affected particularly as its corporate clients, restaurant customers and other food businesses had experienced sluggish, and even no demand in some instances, in their operations.

CCK’s shares ended 1.5 sen lower last Friday at 51 sen, giving it a market capitalisation of RM329mil.

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