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Japfa unit enters joint venture agreement with Cargill

JAPFA'S wholly owned subsidiary, PT So Good Food (SGF), on Tuesday entered a joint venture agreement with PT Cargill Food Investment Indonesia and Cargill Meats (Thailand), collectively known as Cargill.

The joint venture company, PT Cahaya Gunung Foods, has an initial capital subscription of US$6 million - with 40 per cent belonging to SGF, and 60 per cent to Cargill (representing US$2.4 million and US$3.6 million respectively).

The initial subscription will be completed in six months' time.

PT Cahaya Gunung Foods will manufacture unbranded cooked poultry products for supply to quick service restaurants in Indonesia, as well as hotels, restaurants, convenience stores and petrol kiosks.

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It will commence manufacturing around Q1 2017.

"SGF will fund its investment (through) internal resources and/or bank borrowings. This transaction is not expected to have a material effect on the net tangible assets per share and earnings per share of the group for the current financial year," said Japfa in an announcement on the Singapore Exchange.