CAB to spend RM100mil on farm upgrades


  • Corporate News
  • Monday, 29 Jun 2020

Group managing director Chris Chuah told StarBiz that the group had already converted 30% of the open house farms. “The upgrading exercise resumes next month after having stopped temporarily because of the Covid-19 outbreak."

GEORGETOWN: CAB Cakaran Bhd is spending about RM100mil to upgrade all its open house farms to close house farms in 70 to 80 locations in the country to increase production of chicks.

Group managing director Chris Chuah told StarBiz that the group had already converted 30% of the open house farms.

“The upgrading exercise resumes next month after having stopped temporarily because of the Covid-19 outbreak.

“Close house farm allows us to breed more chicks, as it utilises 0.75 sq ft to rear a bird compared to 1.1 sq ft used in an open house farm.

“This will have a positive impact on the group’s revenue, ” Chuah added.

“Besides higher production capacity, close house farms have better hygienic and safety standards, ” he added.

“The target is to convert all the open house farms into close house farms by 2023, ” he said.

Due to the outbreak of Covid-19 and the movement control order (MCO), the group has to temporarily stop its upgrading of the slaughtering plant in Sungai Pinang.

“The machinery for the upgrading exercise is here. Because the engineers from Holland can’t come into Malaysia yet to the installation, we will upgrade at a later date when the country opens up again.

“Once upgraded, the slaughtering plant in Sungai Petani will have a slaughtering capacity of 10,000 birds per hour compared to the current 4,000 birds per hour.

“Investment is also made in automating most processes for cutting and deboning chicken into parts.

“Upon the completion of this project, the plant will more than double its current production capacity, and there will be an improvement in overall product quality.

“The new equipment will help reduce the use of human resources, and less water is needed to run the operation. Overall there will be more efficiency in production and cost savings.

“Because of the weak market sentiment, the management will proceed with caution by investing in only one supermarket outlet in 2020 instead of two.

“We will set up the new outlet in Perak this year, and another outlet in Kedah in 2021.

“However, the group will expand the number of supermarket outlets over the long term as one of the strategies to have a more efficient distributing channel for the Group’s products, “ he said.

On the joint venture integrated poultry project in Indonesia, it has been put temporarily on hold due to the severity of the Covid-19 situation in Indonesia.

“We are waiting for the Indonesian government to give us the green light on when we can resume construction work, ” Chuah said.

The project is over 80 acres, located at five locations in Java, comprising three phases involving the implementation of 11 projects.

“We will develop a layer farm, feed mill plant, parent farm, and food processing plant for the initial phase.

“The three phases, to be constructed gradually, will take about five years to complete, “ said Chuah.

He also noted that the group is still working on the total investment cost for the entire project.

“We will try as much as possible to minimise on the cost of investment, “ he added.

CAB currently holds a 10% stake in the joint-venture business and can raise the stake further to 30% over the next five years.

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CAB Cakaran , Chris Chuah , Covid-19 , upgrading ,

   

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