Kawan Food Berhad (KFB), the holding company for a major frozen food production enterprise in Malaysia, has been designated as a stock with significant growth potential by Inter-Pacific Research Sdn Bhd. Ringing up sales of RM 126 million last year (+14.7%), its profit after taxes amounted to RM 16.1 million, an increase of 19% compared with 2012 figures.
According to Inter-Pacific Research, a RM 100 million expansion by the company will facilitate the relocation of current plants to a 15-acre site in Port Klang, Selangor. The consolidated operation is expected to boost capacity by almost five-fold and pave the way for compound annual growth rates of 3.9% through 2019.
The company produces a comprehensive line of products ranging from traditional South Asian leavened flatbreads, puff pastries and curries, to stuffed pancakes, spring rolls, dumplings, glutinous rice balls, soy-based protein items (Veat), vegetables and wedges. Approximately 70% of its output is exported to over 20 countries around the world, with much of the volume going to the USA. It is now looking to further penetrate markets in South America and Africa.
“Kawan Food is also confident its Nantong operations will continue to grow significantly in China with an able management team,” reported the Malaysian Reserve business daily. “Present challenges for the group include the implementation of minimum wage, and the increase in the electricity tariffs that could apply cost pressures.”