Cargill to sell Malaysian animal feed business to CAB Cakaran for US$49M

MALAYSIA – Cargill is set to exit Malaysia’s commercial feed manufacturing sector with the sale of its wholly-owned subsidiary, Cargill Feed Sdn Bhd (CFSB), to CAB Cakaran Corp Bhd in a cash deal valued at RM231 million (approximately US$49 million). 

The transaction, announced on Thursday, marks a major step for CAB Cakaran as it seeks to bolster control over its poultry supply chain.

The acquisition will be carried out by CAB’s unit, CAB Cakaran Sdn Bhd, which entered into a conditional share purchase agreement with Cargill Holdings (Malaysia) Sdn Bhd to buy 100% equity interest in CFSB. 

The deal is expected to close by the fourth quarter of 2025, pending regulatory approvals and customary conditions.

Cargill Feed Sdn Bhd produces compound animal feed for various livestock and aquatic species from its manufacturing hubs in Westports, Butterworth, Melaka, and Sabah, with a total production capacity of 400,000 metric tonnes annually. 

The company posted a revenue of RM390.96 million (US$83 million) and profit before tax of RM22.75 million (US$4.8 million) for the financial year ended May 31, 2025.

CAB Cakaran, which operates over 100 broiler and breeder farms across Peninsular Malaysia, said the acquisition would enhance feed supply security and cost efficiency in its poultry segment. 

“By internalising feed manufacturing, CAB Group aims to improve feed quality consistency, reduce reliance on external suppliers, and mitigate risks related to raw material price fluctuations,” the company said in its Bursa Malaysia filing.

The group plans to finance the acquisition with RM207.9 million (US$44 million) in bank borrowings and RM23.1 million (US$4.9 million) from internal reserves. 

As of March 2025, CAB reported cash and bank balances of RM84.67 million (US$18 million), with total borrowings of RM340.35 million (US$72 million).

Despite recent revenue pressures, CAB is positioning this acquisition as a long-term investment. 

“With such a broad farming footprint, securing a reliable and cost-effective supply of animal feed is vital to maintaining operational efficiency and supporting the group’s long-term growth,” the company said.

Cargill streamlines global animal nutrition portfolio

The Malaysian divestment follows a similar move by Cargill in March 2025, when it announced the sale of its animal nutrition business in Romania to local agri-food group Carmistin. That deal, which includes two Provimi-branded feed plants, is awaiting regulatory clearance.

A spokesperson from Cargill Animal Nutrition commented on the strategic rationale behind these moves, saying: “We continuously assess our portfolio to ensure strategic alignment with long-term growth opportunities.”

Cargill acquired Provimi in 2011 and has since expanded its offerings of premixes, additives, and specialty feeds through the brand. About 100 employees from the Romanian unit are expected to transition to Carmistin in the first half of 2025.

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