The CAB Cakaran Corporation Bhd, a leading player in the poultry industry, has taken a significant step forward in its business strategy by acquiring 100% equity interest in Cargill Feed Sdn Bhd for RM231 million. This acquisition will not only enhance the company’s operational efficiency but also position it as a major player in the animal feed market in Malaysia.

  • With the acquisition, CAB Cakaran will own all of Cargill Feed’s four feed mills in Malaysia, transforming it from a customer to an owner of all the latter’s feed mills in Malaysia.
  • The deal is a strategic move by CAB Cakaran to strengthen its position in the poultry industry, and will enable the company to increase its operational efficiency and reduce its dependency on external suppliers.

The acquisition is the result of a long-term plan by CAB Cakaran to achieve vertical integration across the entire poultry value chain. According to CAB Cakaran group managing director Christopher Chuah Hoon Phong, the acquisition is a major milestone in the company’s ‘farm to fork’ operating model.

CAB Cakaran’s ‘Farm to Fork’ Model (a) Feed mills (b) Primary breeders (c) Breeder farms (d) Hatcheries (e) Growout farms (f) Processing plants (g) Logistics and distribution channels
Vertical integration achieved through this acquisition Feed mills Primary breeders Breeder farms Hatcheries Growout farms Processing plants Logistics and distribution channels

CAB Cakaran’s managing director Christopher Chuah Hoon Phong highlighted the importance of securing a reliable and cost-effective supply of animal feed. He stated that the acquisition will enable the company to achieve this goal and reduce its exposure to raw material price volatility.

“With the acquisition of Cargill Feed, we will be able to leverage the technical expertise and manufacturing capacity of Cargill to produce high-quality animal feed, and pursue opportunities for joint innovation in feed development,” said Chuah.

The acquisition is expected to enhance the operational efficiency of CAB Cakaran and support its long-term growth plans. It will also enable the company to ensure consistent feed quality, reduce its dependency on external suppliers, and minimize its exposure to raw material price volatility. Cargill, a leading multinational corporation, began its feed operations in Malaysia in 1986. Today, Cargill Feed and its subsidiary, Desa Cargill, operate four animal feed mills in Malaysia, with a total capacity of about 400,000 tonnes per year.

  • Cargill Feed produces a range of commercial compound feed tailored to meet the nutritional needs of various livestock and aqua species.
  • The company has a diverse customer base, including commercial farms and retailers, while sourcing its raw materials from both domestic (Malaysia) and international sources.

Cargill is a leading global agribusiness company, founded in 1865. It provides food, ingredients, agricultural solutions, industrial products, and animal nutrition products and solutions, employing over 160,000 people in 70 countries and operating in 125 markets. Key Benefits of the Acquisition

  • Enhanced operational efficiency
  • Increased vertical integration across the entire poultry value chain
  • Reduced dependency on external suppliers
  • Improved consistency in feed quality
Definition:

Vertical integration refers to the process of organizing a company’s business activities into a single, cohesive unit.

Highlights of the Acquisition

  • RM231 million acquisition price
  • 100% equity interest acquired
  • Four feed mills in Malaysia
  • Improved operational efficiency

This acquisition is a significant milestone in the poultry industry in Malaysia, and will position CAB Cakaran as a major player in the animal feed market. With its ‘farm to fork’ operating model, the company will now be able to provide a complete range of services to its customers, from feed to finished products. The acquisition will also enable the company to pursue opportunities for joint innovation in feed development, and leverage the technical expertise and manufacturing capacity of Cargill. Overall, this acquisition is a strategic move that will enhance the operational efficiency of CAB Cakaran and support its long-term growth plans.