GEORGE TOWN (Oct 15): Poultry and retail chain player CAB Cakaran Corp Bhd (KL:CAB) plans to spend RM100 million over five years to increase its number of retail outlets in the country from 25 to 100.

The group, which operates retail stores under Pasaraya Jaya Gading Sdn Bhd and Home Mart Fresh & Frozen Sdn Bhd, also eyes to grow its Kyros Kebab fast food chain following a rebranding exercise initiated last year. 

In an interview, group managing director Chris Chuah told The Edge that the new supermarkets would be in its existing five states namely Penang, Kelantan, Kedah, Perak, and Pahang.

“Our strategy is to build a big network of such outlets throughout the country as one of the distribution channels for the group’s products.

“Plans are afoot to grow more Kyros Kebab outlets in the coming years after successfully launching the rebranded outlets,” Chuah said.

CAB currently has 19 retail stores under Pasaraya Jaya Gading and Home Mart Fresh & Frozen. This is on top of six Kyros Kebab fast food restaurants spread across Selangor, Kuala Lumpur, and Negeri Sembilan. 

At end-June, the group has long-term borrowings of RM143.53 million against cash of RM89.29 million, with net gearing at 0.1 times — significantly lower following four consecutive years of decline from one times in 2021.

Plans to grow its retail business — which has been loss-making since 2023 — allows its expansion in the integrated poultry segment, where it recently proposed to acquire Cargill Feed Sdn Bhd’s Malaysian feedmill operations and assets in Malaysia for RM231 million.

The acquisition points to "potential for synergies and long-term value creation", which offsets Cargill's declining profit in the last four years that was mainly due to rising ingredient costs, aside from softer demand.

The acquisition means CAB "doesn't have to acquire a fresh land bank for building feedmill processing plants" and helps the group save substantially as it expands, Chuah said. 

“Land strategically located near ports is scarce and expensive. If our feed mills are too far from the ports, we will incur high transportation costs,” Chuah added.

Cargill makes animal feed for livestock and fish, with factories in Westports, Butterworth, Melaka, and Sabah.

“Since we have more than 10 breeder farms across Penang, Kedah, Negeri Sembilan, Melaka, and Johor, and operate over 100 broiler farms in peninsular Malaysia, the Cargill acquisition will provide a reliable and cost-effective supply of animal feed, vital to maintaining operational efficiency and supporting our long-term growth."

"The proposed acquisition is expected to offer an additional revenue stream and allow access to Cargill’s existing client base, which may offer opportunities for market expansion and cross-selling,” Chuah said.

Shares of CAB Cakaran are trading at its highest since 2018, led by its poultry segment which has remained strong after a record 2023. At 81.5 sen, the group trades at 7.1 times trailing price-to-earnings ratio with a market capitalisation of RM568.64 million.

For the nine months ending June 30, 2025 (9MFY2025), CAB posted a 7.51% year-on-year rise in net profit to RM70.65 million from RM65.72 million, as revenue rose 2.4% to RM1.74 billion, from RM1.71 billion in 9MFY2024.

According to Chuah, the poultry market in Malaysia is expected to remain resilient, supported by sustained demand for poultry products as an affordable and essential source of protein.

“Overall consumption is projected to stay robust, driven by population growth, urbanisation, and shifting dietary preferences towards protein-rich diets.

“While broiler selling prices may experience a temporary decline, they are anticipated to rebound in the near term,” he said.