Monday, November 28, 2011
Wednesday, November 23, 2011
Sunday, November 20, 2011
Tuesday, November 15, 2011
The Edge Billion Ringgit Club - Fraser & Neave Holdings Bhd
| Written by Financial Daily |
| Tuesday, 15 November 2011 11:31 |
Fraser & Neave group is a household beverages and dairies name that has been present in Malaysia since 1883.
In 1972, the Frase & Neave Ltd group ventured into glass manufacturing via acquisition of a substantial stake in Malaya Glass Bhd (MGB). In 1996, the group reorganised and realigned its Malaysian soft drinks and dairy businesses by injecting them into MGB, which later changed its name to Fraser & Neave Holdings (F&N) on March 5, 1996.
Since then, F&N has been regarded as the food and beverage (F&B) arm of its parent, Fraser & Neave, with wholly owned core businesses in Malaysia in soft drinks and dairies.
The group’s soft drink brands include 100Plus, F&N Fun Flavours, Seasons, Fruit Tree, Ice Mountain and Red Bull, while it is a franchise holder for Coca-Cola, Sprite and Aquarius. Its dairy brands include F&N, Tea Pot, Gold Coin, Farmhouse, Magnolia and Alive. It is also a franchise holder for brands such as Sunkist, Ideal, Carnation and Milkmaid.
F&N’s soft drinks factory in Shah Alam, operational since 1996, is one of the largest in Southeast Asia. The condensed milk factory in Petaling Jaya, set up in 1969, is Southeast Asia’s largest with an annual capacity of over 11 million cases. It also operates a can-making plant with a capacity of more than 420 million cans per annum.
A property division was added in 2004 and the group purchased a stake in Cocoaland Holdings Bhd in 2010 to further strengthen and accelerate the development of food products in its existing regional F&B portfolio. In 2010, the glass business was divested.
Datuk Ng Jui Sia, F&N CEO/managing director shares with The Edge Financial Daily his strategies and dreams for the company.
TEFD: What are the group’s competitive strengths and advantages?
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| Ng wants to see F&N establish itself as a leading regional F&B company. |
Ng: Our competitive strengths lie in our people capability, established brands, a comprehensive distribution infrastructure and manufacturing excellence.
With a 128-year heritage, the F&N group in Malaysia has built a wealth of experience and established a legacy with distinctive embedded values. With intimate knowledge of the local market and consumer needs, we have managed to meet those needs for over four generations of Malaysians through product innovation. At the same time, we have built our distribution network to be second to none. F&N brands can be found in any distribution channel, ranging from hypermarket to sundry shops, from road side stalls to high-end F&B outlets.
Surveys have shown that virtually every household pantry and almost every F&B outlet in Malaysia stocks one or more of our products. Indeed, over the past 128 years our brands have become synonymous with the culture and traditions of Malaysia. Our products are affordable staples that are consumed nationally on a daily basis (and especially during Malaysia’s numerous festive seasons) and predominate in the market sectors in which we compete. For these reasons F&N is regarded as a good barometer of consumer confidence and of the national economy.
What have been the achievements of the group in the past four years?
The most significant achievement was Nestle’s canned milk acquisition in 2007. The acquisition propelled F&N into the largest canned milk producer in Southeast Asia. This was a very strategic investment as it enabled F&N to set a foothold in Thailand and a launch pad for expansion into the largely untapped Indochina and Myanmar markets with a population base of over 200 million. Its presence in the Thai market has helped F&N transform almost overnight into a top five non-alcoholic F&B company in Thailand, contributing to over RM1 billion revenue, next to the dairy business.
In 2009, a RM250 million Greenfield liquid milk plant was established in Rojana, 70km north of Bangkok with a total capacity of 3.5 million cans per day or annual production of 24 million cases of products. The plant is fully integrated with outsourced in-situ can manufacturing facility and on-site logistics operations.
The Thai plant became a blueprint for F&N Dairies Malaysia’s new RM350 million plant at the Pulau Indah halal hub in Selangor which is scheduled for completion in the second half of this year. This plant will showcase cutting-edge green technology which minimises carbon footprint via the incorporation of water, energy and environmental conservation technology.
Over the past five years since January 2006, the market capitalisation of F&N has seen a nearly threefold increase from RM2.21 billion to RM6.27 billion as at mid-October 2011.
What are the major challenges your company faced over the years and how did it overcome them? Is there anything else you would have done differently?
Our raw materials purchases are in US dollars. Thus, volatility in the USD/MYR exchange rate will have an impact. We will monitor our currency movements closely.
How is the company positioning itself within your industry? What are your strategies to grow or gain market share?
We are the market leaders in the ready-to-drink (RTD) beverages and canned milk (sweetened condensed milk and evaporated milk) in Malaysia. Our aim is to reinforce this leading position, while expanding our product portfolio towards becoming a total F&B company.
We are making fast and positive inroads into Thailand markets, and establishing a strong brand visibility in Indochina and Myanmar.
We have a two-pronged strategy for expansion. The first is to grow the business organically in the domestic markets that we operate in and seek new ones through exports, while the second is to seek out acquisition opportunities and/or strategic alliances with F&B entities, which will complement and synergise with our existing business model.
The F&N group is also able to leverage on the trained expertise from Nestle in terms of technical capability and R&D resources which have resulted in the introduction of innovative products to the market.
We will continue to launch more products and variants in addition to strengthening the distribution infrastructure of our remaining core products in the country. Our sound balance sheet coupled with strong liquidity will stand us in good stead as we pursue our vision of becoming a regional F&B company.
What are the group’s plans for the future, both short-term and long-term? What are your group plans to compete in the increasingly globalised environment?
With Coca-Cola’s impending entry, we expect the local beverage landscape to change and competition to intensify, both of which will pose challenges as well as provide new opportunities to the group. Noise levels (in terms of advertisement, promotions, merchandising, new product launches) will increase significantly with the entry of such a formidable player. Arising from this, we expect the RTD market to expand.
Presently F&N has a leading advantage in terms of width and depth of distribution and our brands like 100Plus, F&N, Seasons are household names. F&N will vigorously contest to reinforce our position in the market. After all, Malaysia is our home ground and we are homegrown. We expect F&N volume to continue to grow by double digits in the foreseeable future.
As for dairies, we have started the ball rolling by entering the Thai dairy market in 2007. The immediate focus is to grow share in the Thai market and build brand franchise and presence in Myanmar and the Indochina region.
Once there is a critical mass, it offers an opportunity to set up dairy plants in Indochina and Myanmar to cater to the growing demand as the Rojana plant in Thailand will not be able to fulfil demand of a 220-million population base.
How would you like to see the group in 10 years’ time?
We would like to see F&N establishing itself as a leading regional F&B company, with dairy and soft drink plants in the Asean region, particularly in Myanmar and Indochina.
Tuesday, November 8, 2011
QSR’s Tom Yum Crunch spices up a busy 4Q
Written by Financial Daily |
| Tuesday, 08 November 2011 10:29 |
(Nov 4, RM5.65)
Maintain outperform with revised target price of RM8.30 from RM7.22: Crowd favourite Tom Yum Crunch returns after seven years to a hot and spicy response, feeding into KFC’s mouth-watering same-store sales growth (SSSG) 0f 12% in October. Pizza Hut is playing catch-up in the delivery segment and the group is making further headway in India.
Tuesday, November 1, 2011
The Edge Billion Ringgit Club - Mah Sing Group Bhd
| Written by Financial Daily |
| Tuesday, 01 November 2011 11:37 |
Incorporated in 1991, Mah Sing Group Bhd is one of Malaysia’s leading developers. With numerous international and domestic awards, the group has established a strong brand in medium to high-end landed residential properties, commercial projects including office buildings, shops, retail and SoHo as well as industrial projects. It also has a profitable plastic business, which was the original core business of the group before it diversified into property development. The group has about 34 projects across Malaysia.
Group managing director and CEO Tan Sri Leong Hoy Kum shares with The Edge Financial Daily his strategies and dreams for the company.
TEFD: What are the group’s competitive strengths and advantages?
Leong: Our competitive strengths include being versatile, having a strong brand, being innovative and being able to cater for various market segments.
• Versatility. Mah Sing is one of the few developers in Malaysia to offer a wide range of products comprising residential (catering for a wide range of customers, from medium to high-end developments, both landed and high-rise with built-up areas from 500 square feet), commercial (office, retail and shops) and industrial properties. Our wide ranging product offerings help the group identify and roll out different products in different phases of the economic cycle (see table).
• Quick turnaround strategy. The group ensures a short period between land purchases and launches for fast cash flow generation to maximise shareholders’ return.
• Strong research and development team. We conduct in-depth study of market needs. The team is able to identify new trends that appeal to the market. For instance, in the residential segment, we identified the trend and appeal of superlink, semi-detached and bungalow developments in a gated-and-guarded environment with facilities. In the commercial space, we popularise en bloc sales in the primary market (The Icon Jalan Tun Razak — West Wing and East Wing, and Apex Tower, Southgate). For the industrial segment, the group identified the opportunity for niche semi-detached industrial properties in the Klang Valley which resulted in the brisk sales for our iParc 1, 2 and 3
• Strong branding. The group has built a strong brand name over the years, delivering quality products on a timely basis that meet the needs of end buyers.
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| Leong is inpired by Li Ka Shing and aims to make Mah Sing the Cheung Kong of Malaysia one day. |
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• Innovative and fresh concepts, adaptable to changing market demands. Our product development team continuously work on innovative products based on market feedback obtained by our research and development team. While presenting fresh concepts, we ensure that practicality is given paramount importance.
• Quality and services. Mah Sing has a strong quality control and quality assurance team that ensures all our projects meet and exceed stringent quality standards. We are also adopting international best practices in ensuring quality and have sought CONQUAS (Construction Quality Assessment System) certification by BCA Singapore (Building and Construction Authority) for all new residential projects. We also have the distinction of being the first and only developer accorded the CONQUAS award for an office building in Malaysia, namely The Icon Tun Razak which was completed in 2009.
• Strong balance sheet and earnings sustainability. We had low net gearing of 0.32 times as at March 31, 2011. This provides us with the capacity to gear up for landbanking. Our present combined remaining gross development value and unbilled sales are about RM14 billion which should provide earnings sustainability for another five to seven years.
• Geographical diversification. Domestically, Mah Sing has developments in the three main growth corridors of the Klang Valley, Johor and Penang. It is also looking at opportunities abroad in China, Vietnam, Singapore and Australia.
What are the group’s achievements in the past four years?
Our revenue doubled from RM573 million in 2007 to RM1.11 billion in 2010, while net profit increased nearly 50% from RM81 million in 2007 to RM118 million in 2010. Our number of projects nearly tripled, from 13 projects in 2007 to 34 in 2011. We have maintained a consistent dividend payout of a minimum of 40% of net profit since 2006. Mah Sing has garnered both local and international awards and accolades for its projects as well as recognition for its performance as a leading property developer.
How is the group positioning itself within your industry? What are your strategies to grow or gain market share?
Mah Sing is a premier lifestyle developer and our expertise is in innovative product development, high quality finishing and timely delivery of products that surpass our buyers’ expectations. We are also one of the very few developers in the country to offer a full and complete range of properties, namely residential, commercial and industrial products. Hence, we are positioning ourselves as a one-stop centre where properties are concerned.
We will continue to offer properties in good locations, with concepts and designs that meet buyers’ needs. In 2007, we achieved sales of RM727 million and doubled that to RM1.5 billion in 2010. Moving forward, we aim to gain more market share, starting with a RM2 billion sales target for 2011.
We are committed to raising the bar to continuously improve our concepts, designs and also strive to create iconic buildings and developments. We will also continue to run our business well, grow our revenues, profits and returns to shareholders, as well as adopt good corporate governance.
What are the group’s plans for the future?
In the coming years, the group will proceed with its three-pronged strategy. We will continue with our niche, quick turnaround development model for our residential, commercial and industrial series as it is profitable and cash-generative. With our low net gearing, we target to acquire a large tract of strategic land bank over the next two years. In the future, we shall explore overseas expansion to drive future earnings growth.
What is your dream for your company? How would you like to see it in 10 years?
My vision is to be a regional developer. We would like to continue with our branding locally and hopefully someday, our brand will penetrate other parts of the world. This is what we wish for as we are looking at bringing value to the house buyers, improving the quality of life and enhancing their lifestyles. We are a dynamic company and seek continuous improvement. Ultimately, we want to leave a legacy of excellence.
I am inspired by business luminaries like Li Ka Shing and aim to make Mah Sing the Cheung Kong of Malaysia one day.