February 16, 2016

CAB Cakaran Corp Bhd, an integrated poultry producer based in Malaysia, plans to raise output capacity by over 50%, The Rakyat Post reported.

In support of the action, the company issued a letter of intent to buy over Farm's Best Food Industries Sdn Bhd for RM80 million (US$19.3 million), Sinmah Breeders Sdn Bhd for RM88 million (US$21.3 million) and Sinmah Livestocks Sdn Bhd for RM74 million (US$18 million).

The acquisition will cover additional 301.43 acres of broiler farms and about 200.22 acres of breeder farms, and other poultry facilities and equipment.

According to CAB Cakaran, the company's broiler output will increase another 2.11 million to 2.33 million birds monthly. At present, its production capacity stands at 4.5 million birds per month.

"The higher production volume will help us achieve economies of scale, which will in turn improve cost efficiency and improve our profit margin in the medium and long term," CAB Cakaran said.

The acquisition also benefits the producer in terms of stronger competiveness and deeper market penetration into the Malaysian poultry industry as well as regional markets.

In fact, CAB Cakaran signed a deal with the Salim Group to set up a fully integrated poultry business in Indonesia.

- The Rakyat Post