January 8, 2013
At the beginning of this year, Malindo Feedmill began producing processed foods like chicken nuggets and sausages and penetrated the food business because it saw the growth potential in consumption of chicken meat berbasis in Indonesia that tends to increase every year.
Rudy Hartono, Company Secretary Malindo, say, processed foods division could operate this month. Malindo carries Sunny Gold brand for processed foods. "After getting permission from the Food and Drug Administration, we are ready for production," Hartono said.
Malindo build a processed food factory in Cikarang, Bekasi, in 2011. To run this new business, Malindo established a new subsidiary, PT Malindo Food Delight.
Malindo processed food factory production capacity to 9,000 tonnes per year. "Production is still small in the beginning, only a few thousand tonnes," said Rudy without giving details. Of course, Malindo will also release multiple variants of processed food products.
Hartono added, Sunny Gold product ready for market by the end of the first quarter or early second quarter of 2013. Malindo will distribute Sunny Gold to market modern and traditional markets in big cities such as Jakarta, Surabaya, Bandung, and Yogyakarta.
Management Malindo target contribution of this new line of business in the next five years to achieve 5-10% of total company revenue. Moreover, they believe, processed food business has high margins. When it passed the break-even point (BEP), they said, the gross profit margin of the business of food processing can be above 20%.
Malindo need to expand into the business of processed foods for synergies with other business units. Therefore, the supply of raw materials for processed food is obtained from the other business units Malindo. For that, Malindo will build five new peternakan broilers this year. "We reserve the investment of about US$70 billion for the five farms," said Hartono.
With the addition of new farms, broiler production Malindo could rise from the current 30%. Currently Malindo is able to produce about 20 million pounds of chicken per year. The company also will add to the production of animal feed and day old chickens or day old chicken (DOC).
However, with the expansion, management Malindo not dare to reveal the target revenue and earnings this year. "Although there is a new division, we estimate the composition of the income will not be much different from last year," said Hartono.
As an illustration, Malindo revenue and net income during 2012 is projected to grow 20-25% compared to revenue and net income in 2011. This means that revenue and net income during 2012 Malindo respective maximum of IDR3.29 trillion (US$340 million) and IDR256.21 billion (US$27 million). "Target 2012 has reached even beyond the initial target," Hartono said.
