Indonesia’s Salim Group is joining with Malaysia’s CAB Cakaran to establish a joint, integrated poultry business located in Indonesia, reports the Nikkei Asian Review. The venture is being formed through KMP, Salim’s Singapore-based investment holding company, which will initially own a 90% stake in the business, but CAB will have the option to increase its stake in the venture from 10% to 30% within the first three years.

 

Although Salim controls Indofood Sukses Makmur, Indonesia’s largest instant noodle manufacturer, the group has lacked a significant presence in the country’s poultry sector.

 

Based in Penang, Malaysia, CAB Cakaran controls one of the largest poultry processing operations in the country and poultry farms located across seven Malaysian states. The company produces broiler chickens, eggs, and frozen poultry foods such as chicken nuggets. CAB also operates the franchise fast food chain, Kryos Kebab, with more than 20 retail sites, and earlier in 2015 it acquired a 51% stake in Tong Huat Poultry Processing Factory.

 

Salim’s venture into the Indonesian poultry sector is expected to increase competition in the space which is largely controlled by only a few entities including the Indonesian unit of Charoen Pokphand Group, and which saw Indofood joining with Brazil’s poultry processor, BRF in December 2014 to establish a 50/50 joint venture.