Malaysian vermicelli producer KBB Resources Bhd has decided to expand its operations to grow and process tapioca in a move to cope with higher prices of raw materials.

KBB group executive director Ang Chor Teng said that it is sourcing for suitable sites in Cambodia to build a tapioca farm and a tapioca products manufacturing facility. Its sago starch manufacturing facility in Mukah will begin production later this year. 

KBB, which commands a 60% share of the Malaysian vermicelli market, has also embarked on a shopping spree for smaller vermicelli manufacturers to extend its presence in the market. Negotiations are currently underway.

The higher prices of raw materials have hurt the company's 2007 profits and resulted in a 30% increase in its operational costs.