OVERSEAS FOCUS
PPB Group Bhd is expanding the global presence, especially in Vietnam, of its grains and agriculture business as the company’s production in Malaysia has exceeded demand.
PPB Group Bhd is focusing on the international expansion of its grains and agriculture business this year as it expects lower returns from the local flour business, which is its main earnings contributor.
Managing director Lim Soon Huat said flour demand was on the downtrend with the shortage of foreign workers.
“We are seeing a shortage of foreign workers in the country while the number of consumers are also going down. This is a challenge for us to meet our commitment (to the government).
“Since not all flour packs are subsidised and are mainly for household consumption, selling at RM1.35 per kilogramme, we still have to compete with the others,” he said after PPB’s extraordinary general meeting, here, yesterday.
Lim said PPB would focus on expansion in Vietnam and, therefore, local expansion would take a backseat for now.
“We don’t plan to open new mills locally as capacity has exceeded demand, especially with the opening of our mill in Pasir Gudang, Johor. But if the need arises, we will open more mills. For overseas ventures such as Vietnam, we are spending about RM100 million to upgrade mills.”
Lim said the company planned to spend about US$21 million (RM84.4 million) in Hanoi. It has another mill in Ho Chi Minh City.
The grains and agribusiness segment accounted for 67 per cent of the group’s revenue and 56 per cent of profit.
FFM Group, a subsidiary of PPB Group, owns and operates nine flour mills — five in Malaysia, two in Vietnam and one each in Indonesia and Thailand.
PBB Group also has businesses in consumer products, film exhibition and distribution, property, environmental, engineering and utilities as well as investments and other operations.
The consumer goods segment consists of household brands such as Massimo, Marina, Blue Key, Muhibah, Neptune, Seri Murni, Krystal, Anchor and Shamu.
Over the years, PPB Group has expanded its core businesses to Thailand, Vietnam, Cambodia, Indonesia and China. Diversification is paying off as it is now a conglomerate with assets totalling more than RM22.9 billion as at December 31 last year.
On another matter, PPB, which owns 18.55 per cent of Singaporelisted Wilmar International Ltd, said it was business as usual after a deforestation claim by Greenpeace International.
The world’s largest palm oil trader contributed 78 per cent of PBB’s profit last year.
“A lot of these problems have both sides of the story. We are not there, so I think we should not talk about things that we don’t know,” said PPB chairman Tan Sri Oh Sien Nam.
He said the issue could be due to the European Union’s antipalm oil campaign.
We are seeing a shortage of foreign workers in the country while the number of consumers are going down. LIM SOON HUAT
PPB Group Bhd managing director