KUALA LUMPUR (May 19): CCK Consolidated Holdings Bhd, a leading integrated poultry operator based in Sarawak and Sabah, is venturing into the feed mill business via a joint venture shareholders agreement (JVA) with Gold Coin Malaysia Group Sdn Bhd (GCMG).

In a filing with Bursa Malaysia today, CCK said the JVA would involve the company acquiring a 27.2% interest in Gold Coin Sarawak Sdn Bhd from GCMG for RM20.67 million, cash.

Gold Coin Sarawak currently operates a livestock feed mill and a fishmeal mill in Kuching, Sarawak, via its 72.86%-owned subsidiary Bintawa Fishmeal Factory Sdn Bhd.

It has also been a major supplier of quality feed and provider of technical services to CCK and its subsidiaries for over 30 years.

Upon completion of the JVA, GCMG will hold 72.8% of Gold Coin Sarawak, while CCK will hold the remaining 27.2%.

GCMG is one of the pioneers in animal nutrition and the manufacturing of scientifically-balanced animal feed, besides being one of the leading privately-owned agribusiness in Asia.

CCK said the purchase price will be funded from its internally generated funds (10%), with the balance (90%) via instalment payments within 10 years, subject to a late payment fee of 6% per annum on a yearly basis.

CCK Group managing director John Tiong said upon completion of the joint venture, the group will have a presence in the entire value chain of the poultry industry covering feeds manufacturing, farming and processing to distribution and retailing.

“In addition, the CCK Group also secures long term supply of quality feeds for the group's poultry operations. The JVA also strengthens CCK Group's collaboration with GCMG to jointly explore other business opportunities beyond Sarawak, in line with CCK's expansion plan,” he said in a separate statement today.

In the past few years, CCK has also expanded its presence regionally, with the setting up of retail outlets for cold storage products in Indonesia.

The group had announced in April that it is undertaking a one-for-one bonus issue of up to 157.68 million bonus shares to reward shareholders, and increase its share capital base, in line with its increased scale of operations.

At 5pm today, CCK shares were up 6 sen (5%) to RM1.26, for a market capitalisation of RM190.79 million.