Salim, two foreign partners get piggish in Singapore

JAKARTA (JP): Salim group, one of Indonesian blue chips, is expanding its livestock division through a joint venture agreement with two of the largest pig farm operators in Singapore to construct a S$30 million abattoir in the region.

The Salim group is making the investment through its Singapore-based agency, Kabila Mandiri Persada (KMP) Pte Ltd.

"The Salim group is setting up a S$30 million abattoir here in a joint venture with Bunge group of Australia and Sin Ban group of Malaysia." KMP managing director, Tan Kong King, was quoted by Business Times daily as saying.

Tan said KMP and Bunge will each hold a 37 percent stake in the abattoir, to be named Farmers Abattoir, and Sim ban will hold the remaining 26 percent.

Tan said Farmers Abattoir is open to equity participation from larger pig farmers in Malaysia who also supply the Singapore market. He said a number of farmers had approached the partners, but no deal had been firmed up yet.

"Farmers Abattoir will help KMP integrate its meat operations because currently we have to use a public abattoir in Singapore." Tan said.

KMP owns a pig farm in Pulau Bulan in the Riau islands which produces 180,000 pigs a year, all of which are sold to Singapore. The Singapore market consumes about 1.25 million pigs a year.

Tan said although there is so far no proper integration, the KMP is expected to be able to do further meat processing with the new abattoir and to export to other places in time.

The abattoir, which is expected to be completed by the end of 1995, will use the latest processing technology, including carcass grading, chilling, proper deboning and portion cutting facilities, Tan said.

It will ensure that the meat will be of the best quality, and will meet the higher standards of hygiene demanded by Singapore consumers, he added.

The managing director said together with Bunge and Sim Ban, KMP is also investing further in pig farms, which would greatly expand the supply of pigs, a large portion of which will be processed at the new abattoir at Jalan Buroh, Singapore.

Tan said with the Bunge group, KMP is setting a 50-50 joint venture to acquire and operate pig farms in Pulau Bulan. Bunge will help raise production at the farm to 300,000 heads a year by 1995, with the ultimate target of 500,000 heads a year, he added.

Tan said the expansion would need an investment of about $60 million.

He said KMP has also acquired a 40 percent stake in the pig farms of the Sim Ban group for an undisclosed sum.

Tan said production would be expanded at the farms in Perak, Malaysia, which currently produce some 200,000 pigs a year.(02)