The food industry in Asia: News updates
12May2001 MALAYSIA: PPB GROUP AIMS TO REDUCE DEPENDENCY ON FOOD BUSINESS.
Kuala Lumpur: PPB Group Bhd aims to reduce its dependency on the food business in the next five years by stepping up its manufacturing and services activities.
Its chairman and managing director Ong Ie Cheong told reporters after the company's AGM yesterday that PPB is targeting a 50-50 balance between the food and non-food segments.
"In five years, the contribution from food activities to profit should drop to 50% from the current 80% and the other half would come from our other activities," he said.
He explained that the company aims to reduce its dependence on the food business in view of the impending Asean Free Trade Area (Afta).
"When Afta kicks in, the food business will become very competitive. Food is cyclical and prices are controlled by the government," Ong said.
"Prices of flour and sugar, for example, are controlled by the government and it will be harder to compete when the market opens up to foreign competition as there will be too many players in the market," he added.
The company is currently bidding for three water treatment jobs in the country and is also approaching the state governments of Penang and Ipoh for household waste management, and transportation projects.
"We should know the result of our bids within this year," he said.
Ong was unable to comment on the value of the projects that are being tendered and declined to give their location.
However, he said the company will most likely team up with a foreign party, depending on the projects awarded.
At the moment, the company has in hand a privatisation project in Sungei Semenyih that is for a period of 30 years.
"We have invested RM25 million in the project and expect the payback period to be between five and six years," Ong said.
The project is undertaken by a consortium involving PPB subsidiary Chemical Waste Management Sdn Bhd, the Selangor state government and a Bumiputra company.
The consortium has taken over the operations and maintenance of the Sungei Semenyih dam and is in the process of refurbishing and replacing the plant's assets.
The company is also expanding its chicken and egg layer farm at Trong, Perak via its 53.8% subsidiary FFM Bhd.
Phase One of the three-phase project, which carries a total cost of RM46.2 million, has been completed.
Ong said three million table eggs per annum are being produced under phase one and "we expect to reach seven million by July."
"We expect to be producing at full capacity by the second half of 2002," he said.
In a statement to the KLSE yesterday, PPB Group said it turned in a net profit of RM32.66 million for the first quarter ended March 31, 2001, up substantially from RM14.82 million in the last corresponding quarter.
Ong is confident that the company's performance for the current year will be comparable to last year's on the operating level.
"However, we will be hard pressed to match last year's results in view of falling commodity prices and the slowdown in the economy," he said.
For the financial year ended Dec 31, 2000, the company showed a 25% improvement in its net profit of RM244.4 million on the back of a RM5 billion turnover against RM192.8 million in 1999.
Earnings per share stood at 66.4 sen for financial year 2000 compared to 52.4 sen in 1999.
"Phase one is currently working at three million table eggs per annum and we expect to reach seven million by July," Ong said.
(c) 2001 Sun Media Group Sdn Bhd.
11May2001 MALAYSIA: APOLLO FOOD TO INVEST RM112 MLN.
JOHOR BAHARU, May 11 (Bernama) - In an effort to strengthen its position as one of the top five confectionery producers in the region, Apollo Food Holdings Bhd (Apollo) wil l be investing RM112 million for the next three years.
Its managing director Liang Chiang Heng said that this included the construction of two new plants in Plentong, near here, which will commence in July and due for completion in June 2003.
He said that of the RM112 million, some RM60 million will be used to upgrade and install furnishings and machinery at the new and existing factories.
The Plentong factories will produce new products such as soft biscuits, bread in wrappers with fil lings such as "ikan bilis", pineapple, mango, mini pizza and dry roasted crispy snacks," he told reporters after the company's extraordinary general meeting (EGM) here today.
Liang said that with the completion of the new factories, the company would be able to increase its annual production capacity from 17,000 tonnes at present to around 70,000 tonnes.
"By then, Apollo would have 80 types of products from its current 50, and stands to become the only confectionery maker in Malaysia with suc h a wide range of products to choose from," he said.
Liang said the investment was more than necessary for the company in view of the intense competition from local and regional confectionery makers and the fierce competition expected following the implementation of Asean Free Trade Area (AFTA) in 2003.
Although Apollo controls about 50 percent of the country's confectionery sector, many other players including the small and medium sized companies, were also in the process of expansion. Apollo is aiming at wider markets in the region, especially in China with its huge population, Thailand, Cambodia, Indonesia and Vietnam.
Liang said Apollo has appointed an agent in China to handle and boost its products in that country.
At the EGM, shareholders approved bonus issues of 20 million shares of one for every two existing shares and rights issues of 20 million at RM1.25 per share.
Proceeds from the rights issues totalling RM25 million would be used to part finance the new fa ctories, while the remaining RM27.7 million would come from internal funding. - BERNAMA
MNY MKO FR.
(c) 2001 Bernama - Malaysian National News Agency.
14May2001 INDIA: Pure Drinks family spat gets clammier.
Our Corporate Bureau NEW DELHI
The woes of the promoters' of Pure Drinks Ltd are only growing.
After the dispute over ownership of the company between the two brothers, Ajit Singh and Satwant Singh, and several legal feuds over the `Campa' softdrink business etc, the siblings have now decided to squabble over the sale of immobile assets for repaying debt.
Though the promoter family has finally agreed to sell 8 acre of prime Mount Road plot to ITC for a hotel, another 17 acre is yet to be sold. The 8 acre plot is being sold at the direction of the Supreme Court under the Reserve Bank's NPA scheme. ITC is paying around Rs 70 crore for the land.
According to sources close the family, the elder brother Ajit Singh and his aunt - the wife of late Charanjeet Singh, Harjeet Kaur - are in favour of putting the entire 25 acre on the block, since it will not only enable them to pay off large amounts of debt to various institutions but also help procure certain benefits from the creditors who have been waiting for long.
On the other hand, the younger brother Satwant is in favour of commercial development of real estate (of the remaining 17 acre) instead of a direct sale.
He told Business Standard that the group was planning to invest in real estate business.
However, his claims are disputed by others close to the family. According to them, Harjeet Kaur is the majority shareholder in the group with about 37 per cent stake. Satwant insists he is the largest shareholder instead.
He also claims that he is the adopted son of late Charanjeet Singh, making him the rightful chairman of the group. This matter itself is in court, making things more complicated. Despite repeated attempts, Kaur and Ajit Singh were not available for comments. They are already contesting the case in courts as well as in the Company Law Board (CLB).
The Supreme Court had issued a notice stating that the 25 acre Mount Road, Chennai, land, owned by Pure Drink Calcutta Ltd, be either sold off entirely or in part under the NPA scheme of the reserve bank.
(c)2001 Business Standard Ltd.