October 18, 2012
 

Malindo Feedmill to grow profits with new processed chicken business
 

PT Malindo Feedmill Tbk, the manufacturer and distributor of animal feed and day-old chicks (DOC) is ready to produce processed foods such as sausages and nuggets, under the brand 'Sunny Gold'.

The new business line is under the new subsidiary Malindo, PT Malindo Food Delight. Construction of the plant in Cikarang, Bekasi has begun and is scheduled to begin operations in the fourth quarter of this year.

The plant will produce processed foods made from raw chicken, with a production capacity of 9,000 tonnes per year. In the first year, the new business unit is expected to contribute to about 4% of total revenue of Malindo.

In addition to processed foods, Malindo focuses on three business lines: poultry feed, broiler and DOC. By the end of June 2012, the cattle feed business contributed the most to Malindo's performance, at 64% of total revenue. DOC accounted for 23% of revenue, while broiler chicken business contributed 10%.

By supporting new business lines in the areas of food processing, Malindo began strengthening its broiler business. Malindo is ready to build broiler chicken farms in the area of Java. The company will increase the capacity by about 30% of current capacity.

Malindo Management budgeted IDR50 billion for the establishment of a new feed mill and $ 50 billion for the expansion of broiler farms. IDR120 billion will be put into expanding a farm that produces DOC.

Malindo DOC plans to build four farms located in Java, Kalimantan, and Sulawesi. By adding new farms, according to Rudy, Malindo production growth could increase by 15% per year.

In addition to supporting its new business lines, Malindo also worked on optimising the utilisation of its feed mills. This year, Malindo has added to animal feed mill production capacity in Serang, Banten. The capacity of this plant will increase to 360,000 tonnes of animal feed per year from 300,000 tonnes of animal feed per year.

Malindo also owns another feed factory in Gresik in East Java with a total capacity of 250,000 tonnes per year. Last year, productivity of the two factories reached 95% of total installed capacity of the plant. Malindo targets to reach 550,000 tonnes of feed this year, higher than last year's production of 522,000 tonnes.

To anticipate demand, Malindo will establish a new feed mill in Makassar, South Sulawesi. The investment totals more than US$100 billion. The plant will be completed by the end of next year, "said Rudy, without revealing the capacity of the new plant.

Malindo targets sales to grow 25-30% this year to IDR3.25-3.38 trillion. Net profit is projected to increase 25-30% to IDR256-267 billion.