KUCHING: CCK Consolidated Holdings Bhd’s prawn exports business has received a major boost with the recent acquisition of an Indonesian shrimp firm, PT Bonanza Pratama Abadi.
Via wholly-owned subsidiary PT Adilmart, CCK completed the acquisition of 100% equity interest in PT Bonanza for RM33.7mil in the third quarter of last year.
Established for the past 22 years, PT Bonanza is principally engaged in processing and freezing shrimp for local and export sales. The firm’s key products are frozen free shrimp, frozen cooked shrimp and frozen nobashi ebi shrimp. The acquisition is synergistic to CCK group’s existing seafood business.
According to CCK, the group’s prawn segment turnover surged by more than 183% to RM58.1mil in financial year ended Dec 31, 2022 (FY22), with the significant past of the growth contribution by PT Bonanza.
“The prawn segment benefited from economies of scale post acquisition. The performance of PT Bonanza boosted overall segment export volumes to Japan and Taiwan.
“Exports to other markets continued to gain momentum while domestic sales via our own retail channels also increased in tandem with the recovery in overall demand,” the company said in reviewing its yearly financial results last week.
For the second consecutive year, CCK posted a fresh record group revenue, bolstered by the strong demand for its core poultry products and in-house manufactured processed products in Indonesia.
In FY22, CCK’s group revenue surged by 27% year-on-year (y-o-y) to RM878mil from RM691.5mil in FY21, driving up group net profit to RM62.1mil in FY22 from RM24.8mil in FY21. Its FY20 revenue was RM657.4mil.
In FY22, its Indonesian manufacturing operations in Jakarta and Pontianak contributed RM169.4mil to CCK’s revenue, accounting for 19.3% of the total revenue.
To meet the rising demand of its products, CCK has expanded and raised the production capacity of the Pontianak manufacturing facilities that produces sausages, nuggets and other processed products in 2021.
In Malaysia, CCK, which also has integrated poultry operations, has expanded its retail network over the years to 72 now, comprising of 63 CCK Fresh Mart retail stores, three CCKLocal supermarkets and six CCK wholesale stores.
According to CCK, the retail segment reported a 19% growth in revenue to RM692mil.
This was due to more matured contributions from the three CCKLocal supermarkets (in Kuching, Kota Kinabalu and Sibu) and four newly set up Fresh Mart retail stores, a sharp recovery in demand from both the retail and wholesale channels as well as firm demand for in-house manufactured processed products in Indonesia.
“Tracking the performance of the retail segment, demand for poultry products improved in FY22 due to the re-opening of food and beverage outlets, demand from institutional clients and improved consumer sentiment.
Poultry sales via our own retail stores (intersegment sales) also contributed to segment performance, leading to a 16.5% increase in total segment revenue to RM327.6mil for the period.
“The food service segment benefited from the re-opening of schools in Sarawak with FY22 revenue growing 280.2% to RM22.5mil,” it added.
CCK’s poultry segment reported a pre-tax profit of RM9mil in FY22, a reversal from loss of RM5.9mil in FY21, with the company attributing the return to profitability largely to the subsidiary scheme from the Malaysian government in relation to the price ceilings for chicken and eggs.
The company said with Covid-19 movement restrictions firmly over now, consumer sentiment has turned positive as dining out has resumed and schools have reopened. This is likely to benefit the food and beverage industry.
For FY23, CCK voiced concerns about the volatility of the US dollar against the ringgit as this leads to fluctuations in the prices of corn and soy.
“This is further exacerbated by heightened inflation that has led to an overall increase in raw material input costs as well as along the supply chain.
“This phenomenon is likely to persist into the next financial year and will affect the cost structures of both (the group’s) retail and poultry segments,” it added.