KUCHING: Integrated poultry firm CCK Consolidated Holdings Bhd is to further expand its retail network in Malaysia as it rides on robust retail sales despite the Covid-19 pandemic.
The Sarawak-based company said it plans to open its third CCK Local supermarket in Sibu and three more CCK Freshmart retail stores by end-2021.
In the 12 months to June 30, CCK had opened its first two supermarkets – in Kuching and Kota Kinabalu – and four new Freshmart retail stores, bringing the total number of retail stores to 60. The group also owns and operates six wholesale stores.
The group has expanded its business in Indonesia, with the commercial operation of a new factory and logisitcs centre in Pontianak, West Kalimantan in January this year to boost the production of sausages, nuggets and related processed products.
The new complex comprises a chicken abattoir, cold room and downline food processing of sausages, burgers and meatballs, according to group managing director Tiong Chiong Hiiung.(pic)
“The Pontianak’s facility has gradually ramped up production.
Sarawak-based CCK Holdings said it plans to open its third CCK Local supermarket in Sibu and three more CCK Freshmart retail stores by end-2021
The new facility is part of an expansion plan to replace an existing site which was unable to cater for increasing sausage production requirements,” CCK said when releasing its first-half 2021 (H1’2021) financial results.
Pontianak, which borders Sarawak, is CCK’s first regional expansion.
From Pontianak, the group expanded to Jarkata where it also has manufacturing facilities and retail outlets.
Reviewing the group’s performance in H1’2021, CCK said group revenue surged by RM15mil to RM330.6mil from RM314.8mil in H1’2020, generated by robust retail business.
However, group net profit declined to RM11.4mil from RM15.6mil because of the higher feed costs that hit the bottom line of the poultry segment and the increasing operating expenses due to the opening of supermarkets and new retail stores.
The hike in feed prices is due to global increase in prices of soy and corn.
“Revenue growth in H1’2021 was largely driven by the performance of the retail segment, which achieved a 8.35% increase in segment revenue.
“The robust performance in the retail segment was due to contributions from the expansion of the Malaysian retail network and Indonesian operations.
Revenue contributions from the group’s Indonesian operations (which are classified under the retail segment) increased to 19.36% in H1’2021 from 18.12% in H1’2020. This was brought about by an overall increase in production and sales of sausages, nuggets and other processed products,” it added.
On its prawn business, CCK said with ongoing efforts, the group has boosted its export sales to new customers in South Korea and Taiwan in addition to its traditional markets in Australia and Japan. Sales to local customers via the group’s retail network in Sarawak had also increased.
The revenue of the prawn segment, which is involved in the rearing and production of prawns and seafood products, climbed by 19.7% in H1’2021 from a year ago, it pointed out.
On the market outlook, CCK said the high daily number of positive Covid-19 cases in Sarawak, curbs on travelling and restrictions in the food and beverage industry are affecting business and consumer sentiment, leading to an extremely uncertain and challenging environment.