PETALING JAYA: Food producer CAB Cakaran Corp Bhd is venturing into the higher margin premium downstream food segment to cushion the impact of fluctuations on its profit margin as well as build a stronger market presence in Malaysia and grow its exports.
The group launched a line of premium chicken branded under its 53.04% subsidiary Farm’s Best Food Industries Sdn Bhd called “Farm’s Best Omega 3 Chicken” at Tropicana Gardens Mall today.
CAB group managing director Christopher Chuah Hoon Phong said the expansion into the downstream product that targets the premium segment will increase its profit margin.
“Premium chicken products presents huge growth opportunity for the group because in Malaysia it only began five or six years ago and has less than 5% of market share compared to broiler chicken. We are confident that the premium market share will grow to more than 10% in five to eight years,” he said at the launch.
In addition, the group intends to capitalise on the niche market of premium products which are not restricted to the price control mechanism mandated by the government.
In this initial phase, CAB plans to distribute its Omega 3 chicken through the domestic premium supermarket before expanding into the export market.
“We plan to expand the premium product into the export market with the first market being Singapore once the local market demands are established,” Chuah said.
He added that the launch of its Omega 3 Chicken is timely amid the surge in demand for healthy food products post-Covid-19 pandemic.
“This product will help to address the needs of health-conscious consumers as the effects of the Covid-19 pandemic have prompted consumers to become increasingly more conscious of their health and choose healthy food products that fuel their bodies,” he said.
For its 2022 financial year ended Sept 30 2022, the group recorded a net profit of RM57.72 million, returning to the black from a net loss of RM20.19 million while its revenue increased 13.7% to RM1.95 billion from RM1.72 billion in the same period in 2021 following higher sales, especially in the integrated poultry division.
“Despite the ceiling price imposed by the government on chicken, with the continuing subsidies by the government, the management is confident that the integrated poultry division will continue to be the main contributor to the group’s profit,” the company said in a filing with Bursa Malaysia.
CAB is one of the largest food producers in Malaysia. It is principally engaged in five business divisions namely integrated poultry farming and processing division, marketing and food processing division, supermarket division, fast food operation and franchising, and marine products manufacturing division.
CAB products currently cater to domestic and international markets, including Singapore, Japan, Hong Kong, Brunei and Indonesia. It has 10 breeder farms and more than 100 broiler farms throughout Peninsular Malaysia and produces six million broiler birds every month.
The group attributed the success of its value-added food product to the synergy derived from the acquisition of Farm’s Best Food Industries Sdn Bhd in 2016.
