The processed food division made the least contribution to the firm’s sales at 1.7 percent, far below other business lines such as poultry feed at 63 percent, breeding at 19 percent and broiler chickens at 10 percent as of last year.

“Currently, the consumption of processed food in Indonesia is very low, particularly for chicken meat. With the growing middle-income sector, chicken meat consumption will keep increasing,” Malindo director Rudy Hartono said recently.

In Indonesia, chicken meat consumption only amounts to 10 kilograms per capita per year, far below neighboring countries like Malaysia with 45 kg per capita per year, and Singapore with 40 kg per capita per year.

In line with the growing middle-income population, the firm is optimistic that the trend of people wanting to get something to eat faster will continue; thus, the demand for processed foods will surge in the future.

Since May this year, the firm has been airing TV advertisements titled “Sunny Gold” as one of its strategies to boost revenue from this business stream.

Its processed food division is managed by its subsidiary PT Malindo Food Delight, located in Bekasi, West Java, which produces processed food under the brands Sunny Gold, Ciki Wiki and Sobat.

Over the years, Malindo’s business performance has been negatively affected by the government’s regulation banning corn imports, which is aimed at encouraging productivity among local farmers.

Since the company is not able to use imported corn as raw feed materials anymore, it has had to shift to using locally produced corn at a higher price. As a result, Malindo’s costs have gone up drastically.

It now has to buy corn from farmers at around Rp 4,700 (35 US cents) per kilogram compared to the price of imported corn, which stands at Rp 3,000 per kg, the company said.

“So it can be imagined why our [profit] margins have decreased; the corn price is a lot higher,” Rudy said.

In the first quarter of this year, Malindo’s net profits dropped by 52.5 percent to Rp 24.9 billion, while its sales decreased slightly by 2 percent year-on-year to Rp 1.27 trillion.

In order to resolve the challenges, the company plans to build corn-drying machines, which will be placed at all of its five feed mills located in East Jakarta, Banten, East Java, Central Java and South Sulawesi.

The corn-drying machines will be safe storage that the company can use to maintain consistent corn supply throughout the year.

Malindo has allocated US$50 million in capital expenditure (capex) this year, 33 percent higher than last year.

Part of its capex will be used to build corn dryers, while the remainder is for investment in poultry farms and other production facilities.

“We have built corn-drying machines with a drying capacity of 30,000 tons per month; these corn dryers will eventually help to cut costs,” Malindo director Rewin Hanrahan said.

In 2017, the company aims to boost its revenue by 15 percent to Rp 5.98 trillion.

On Tuesday during the company’s shareholder meetings, shareholders approved the allocation of Rp 85 billion from its 2016 profits as dividends, equal to Rp 38 per share.

The company will pay out the dividends on July 22.

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