February 15, 2013
Malindo boosts production capacity with two feed mills in Indonesia
Integrated feed producer PT Malindo Feedmill Tbk plans to construct two feed mills in Makassar, South Sulawesi and Semarang, Central Java this year, projects worth a total of IDR250 billion (USD25.88 million).
With the two additional feed mills, Malindo expects production capacity to increase by 50%, compared to the current capacity estimated at 900,000 tonnes per year. This will bring total capacity to 1.35 million tonnes after the two feed mills are in operation. Currently, Malindoo's market share is 7%-8% of the Indonesian market.
In addition to animal feed, Malindo also produces day old chicks (DOC). It produces 190 million DOC per year and holds 9% market share locally. Malindo projects production in all lines of its business to grow at least 20% this year.
In the first quarter of this year, Malindo's subsidiary PT Malindo Food Delight started working on new business lines in the processed foods segment, producing sausages and nuggets under the brand 'Sunny Gold'. The products are pending clearance from the Food and Drug Supervisory Agency (BPOM) before being launched.
The food processing plant in Cikarang, Bekasi processes foods made from raw chicken, with a production capacity of 9,000 tonnes per year. The contribution of the new business unit in the first year is expected to be about 4% of Malindo's total revenue.
Malindo is focused on three business lines: poultry feed, broiler DOC and cattle feed. By the end of June 2012, cattle feed business contributed the most to Malindo's performance, at 64% of total revenue. DOC accounted for 23% of revenue, while broiler chicken contributed 10%.
With the new business lines in the areas of food processing, Malindo is able to strengthen its broiler business. After the food processing plants are in operation, Malindo would need sufficient supplies of broiler chickens as raw materials. The company is ready to build broiler chicken farms in ​​Java, increasing capacity by about 30% of current capacity.
