Monday July 23, 2012
Olympics lift for Malaysian food processing
By DAVID TAN
Companies expect an extra push to business during the games
GEORGE TOWN: The summer Olympics in London and higher poultry prices are expected to help boost the business of value-added food processing companies in the second half of this year.
Golden Fresh Sdn Bhd, which produces processed frozen seafood for exports under the Pacific West brand is counting on the Olympics to increase its business in Britain, where it has a marketing and sales office.
CAB Cakaran Bhd, a broiler meat and processed frozen food manufacturer, expects the group to return to the black in the second half of this year as poultry prices improve and the oversupply of broiler meat situation eases.
Golden Fresh senior commercial manager Rosy Ng said the company exported to Britain a new range of value-added products for the Olympics.
”These new products include petite sole fillets in crispy tempura batter and hand-cut hoki strips in tempura dip.
”The raw materials are sourced from fisheries certified by the Marine Stewardship Council, which would help to boost sales in Britain and Australia. We expect sales to increase by double-digit compared to last year. The expectation is for Europe to help generate about one-fifth of the company's revenue this year,” she said.
The sales for the first six months of this year were stable. It registered flat growth compared to a year ago, as spending in Europe had been affected by the economic crisis, Ng added.
“Consumption in Europe and in the Mediterranean is now turning towards cheaper products,” she said.
The stable prices of raw materials will also lead to cost efficiency. The result of this would be competitively-priced products.
“Due to the softer European market, prices of seafood such as coldwater headless and gutted fish is US$3 to US$4 per kg, depending on the grade. Pricing has maintained at this level for the past 12 months, despite dwindling worldwide seafood supply.
“At its peak, the price of coldwater headless and gutted fish hit US$4 to US$5 per kg in 2008-2009,” she said.
Moving ahead, Golden Fresh plans to invest about US$5mil in Myanmar on a seafood processing plant.
“The rationale is to tap into a wider range of seafood available in the Andaman for export to Europe and other destinations. We are now waiting for the foreign direct investment guidelines in Myanmar to be released. China has made enquiries for our products and this represents another potential export market for us,” she added.
Golden Fresh sourced its seafood mainly from the pristine South Atlantic, where the sea is unpolluted.
CAB, which recorded losses for the first six months of the 2012 fiscal year ended March 31,expects poultry prices to improve due to better demand with the Hari Raya celebrations.
“The loss was due to lower average selling price of broilers and day-old-chicks which were significantly lower than their respective cost of production.This scenario is a reflection of the severe imbalance between demand and supply of broilers and day-old-chicks in the local poultry industry.
“The industry-wide losses had led to a constriction of supply, leading to improvement in the prices of broilers and day-old-chicks. The value- added food products manufacturing and trading division also recorded a slight decrease in revenue of2.4% due to the competitive pricing environment which had a negative impact on margins,” he said.
CAB posted a pre-tax loss of RM5.9mil on the back of RM267,449 revenue for the first six months of its 2012 fiscal year ended March 31, compared to RM5.2mil pre-tax profit and RM237.8mil revenue in the same corresponding period last year.
Chuah said the group had invested RM3mil for a new production line at its manufacturing plant in Kuala Lumpur to produce new range of higher value-added products such as cold cut products, fish and chips, fish nuggets, and fish fillets for the United States, Australia, and Middle-East markets, which generated about a fifth of the group's revenue.
“The higher value-added products will help to improve the overall margin and with better cost control,” he added.
Meanwhile, Texchem Resources Bhd plans to set up a RM10mil seafood processing plant in Johor next year.
Group chairman Tan Sri Fumihiko Konishi said that the group was now applying to the local authorities in Johor to set up the plant.
“Our plan is to process fish-based seafood in Johor for export to Japan and China in the second half of 2013,” he said.
Presently, the group has four seafood processing plants, two each in Myanmar and Penang, supporting the Japanese and Chinese markets. The group has to date invested about RM60mil in the four facilities.
Meanwhile, Malaysian Shrimp Industry Association president Syed Omar Syed Jaafar said the domestic price of shrimps was expected to increase once the summer vacation in Europe was over.
“Currently, the price of white shrimps in the country is around RM13.50 per kg, while black tiger prawns are RM20 per kg. Earlier this year, white shrimps were priced at around RM16 per kg. But due to the competition of white shrimps from Thailand, the price softened to RM13.50.
“When the summer vacation in Europe is over, white shrimps from Thailand will not be entering Malaysia as they will be exported to Europe and world-wide markets. The domestic price of white shrimps will then increase again,” he added.
This year, the production of white shrimps will hit about 65,000 tonnes compared to 75,000 tonnes a year ago due to the early mortality syndrome disease.
“Due to the disease, the farms here are producing more black tiger prawns, which will comprise about 40% of the 65,000 tonnes output,” Syed Omar said.