CAB Cakaran, Salim Group to launch poultry venture in Indonesia

Building an integrated poultry business

The joint venture faced delays due to the Covid-19 pandemic and policy uncertainty following Indonesia’s change in government.

Originally signed in November 2017, the deal involves CABINDO Poultry, a wholly owned subsidiary of CAB Cakaran, and Ternak Ayam Terpadu Indonesia, a unit of Indonesia’s largest conglomerate Salim Group.

Salim Group is best known for Indofood Sukses Makmur, the world’s largest instant noodle producer under the Indomie brand. Salim Group, which also holds a 15.2% stake in CAB Cakaran, does not currently operate in poultry.

For CAB Cakaran, the venture marks the first step of its broader strategy to build a fully integrated poultry operation in Indonesia. The plan includes breeding, processing, and distribution.

Under the partnership, CAB Cakaran and Salim Group will produce halal poultry products for Indonesia’s domestic market. They will leverage Salim Group’s extensive retail network, including Indomaret, which operates more than 22,000 outlets nationwide.

Unlocking market opportunities

Indonesia presents a major growth opportunity. Despite having a population eight times larger, per capita chicken consumption stands at just 8.4kg annually, compared to 50.5kg in Malaysia.

“The opportunity in the Indonesian market is massive by virtue of their population and Salim Group’s sheer network,” Mr Chuah said.