This article first appeared in The Edge Financial Daily, on November 9, 2015.

GEORGE TOWN: Penang-based poultry player PWF Consolidated Bhd, formerly known as PW Consolidated Bhd, is looking to double the production of its layer business — which commenced operations in 2012 and already contributes about 10% to group revenue now — to strengthen its position as a domestic player before venturing overseas.

“Although the broiler business is our core competency, we are also looking at expanding our layer business as we believe it will contribute a higher value to group revenue. At present, we are producing 400,000 eggs per day.

“We are targeting to double this to 800,000 eggs daily by our financial year ending Dec 31, 2017 (FY17),” PWF’s group accountant Loo Kok Wei told The Edge Financial Daily after the group’s extraordinary general meeting last week.

“Of course we are always open to opportunities to venture into the overseas market where there is demand for eggs, but we would like to strengthen our position domestically first,” Loo added.

The group is currently in the midst of expanding the second phase of its layer farm in Pendang, Kedah, which it targets to be completed by the last quarter of 2016. To date, PWF has spent RM50 million in capital expenditure for the expansion of its layer farm.

It also has 70 farms dedicated to its broiler farming business that is spread out in Kedah, Perak and Penang. These can produce up to five million kg or 2.5 million birds per month.

Besides that, it has three breeder farms and hatcheries that can produce up to 2.7 million chicks per month. It also operates a feed mill plant in Bukit Minyak, Penang, with a monthly capacity of 27,000 tonnes.

PWF is hopeful of a better financial performance in FY15, but declined to comment on any key performance indicators.

“However, we are aware of the challenges ahead. Fluctuating raw material price is a long-term challenge for us. For now, the weak ringgit against the US dollar poses an immediate challenge to us as we import most of our raw materials for the manufacturing of feed, which is in US dollars,” said Loo.

The group reported a net profit of RM11.66 million in FY14, more than double its FY13 net profit of RM5.33 million. Revenue rose 8% to RM279.75 million from RM259.14 million in FY13.

For its second financial quarter ended June 30, 2015 (2QFY15), PWF’s net profit fell 36.3% to RM1.62 million from RM2.54 million in 2QFY14, mainly due to the lower selling price of eggs, which could not be completely offset by the higher selling price of broilers.

Consequently, revenue for 2QFY15 slipped 4.4% to RM68.08 million from RM71.19 million.

PWF executive chairman and managing director (MD) Datuk Siah Gim Eng, together with his wife Datin Law Hooi Lean, who is also PWF deputy MD, control some 51% of the group’s shareholdings.

On Aug 24, PWF inked a memorandum of understanding with Founder Energy Sdn Bhd, an indirect subsidiary of PUC Founder (MSC) Bhd, to build and operate an ecotype biogas electricity plant through a joint venture or investment scheme.

PWF shares closed three sen or 2.16% lower at RM1.36 last Friday, giving it a market capitalisation of RM97.08 million.