SINGAPORE – Food Empire Holdings Limited (“Food Empire”, together with its subsidiaries, the “Group”) has achieved topline growth with revenue rising 11.4% and 12.8% to US$118.9 million and US$344.3 million for the three months (“3Q2024”) and nine months ended 30 September 2024 (“9M2024”) respectively.
During the quarter under review, the Group achieved double-digit revenue expansion led by South- East Asia (up 23.2%), South Asia (up 16.3%) and Ukraine, Kazakhstan and CIS (up 10.3%), while sales from its Russia and Others segments registered upticks of 1.8% and 7.4% respectively.
The revenue increase from Food Empire’s South-East Asia segment was mainly due to Vietnam, which has emerged as the Group’s fastest growing market. In 3Q2024, Vietnam’s strong performance continued to reflect the success of the Group’s intense marketing efforts across all channels including more brand-sponsored giveaways-with-purchase that led to robust sales and increased brand awareness. At the same time, the Group had strengthened its Vietnam sales force and extended coverage of its products to more geographical areas, increasing accessibility for consumers.
The South-East Asia segment’s performance was further boosted by improved revenue from Malaysia, which recorded higher sales volumes of snacks and non-dairy creamer due to strong demand from customers in key markets.
Revenue from the Group’s South Asia segment was also up mainly due to increased sales volumes and higher pricing in line with higher coffee prices.
Revenue from the Group’s Ukraine, Kazakhstan and CIS segments was up in 3Q2024 mainly due to higher revenue from Kazakhstan as a result of new revenue contribution from Tea House LLP, which became a subsidiary of the Group in May 2024.
The Group’s Russia market recorded a modest increase in revenue in 3Q2024 despite ongoing market challenges. Meanwhile, the Group’s Others segments also achieved higher revenue mainly due to higher contribution from the Africa market.
For 9M2024, the Group’s revenue was up 12.8% to US$344.3 million reflecting strong sales from its South-East Asia, South Asia and Ukraine, Kazakhstan and CIS segments and partially offset by lower revenue from its Russia and Others segments.
Corporate developments
Food Empire made two significant announcements in 3Q2024 that were in line with its stronger strategic focus on Asia, which the Group has identified as a key region to drive future business growth.
In August 2024, Food Empire announced it would receive a capital injection of US$40.0 million through a strategic partnership with Ikhlas Capital to develop and expand its fastest growing South-East Asia and South Asia segments. The partnership will enable the Group to leverage Ikhlas Capital’s strong regional network and both parties will work together to develop a long-term strategy with the aim of value creation for all stakeholders.
In September 2024, Food Empire announced its intention to invest US$80.0 million (including working capital) in a new freeze-dried soluble coffee manufacturing facility in Vietnam. This is part of the Group’s ongoing diversification strategy to grow its ingredients business, which currently comprise two facilities in India that manufacture spray and freeze-dried soluble coffee, as well as a non-dairy creamer manufacturing facility in Malaysia. When completed in early 2028, the new Vietnam facility will solidify Food Empire’s position as one of Asia’s major players in freeze-dried soluble coffee.
Other previously announced projects that reflect the Group’s stronger strategic focus on Asia including its first coffee-mix production facility in Kazakhstan, which is expected to be ready by the end of 2025 and will support its business in Central Asia; and a new snack factory located next to its existing one in Malaysia, which is expected to increase production capacity for its snack business from 2025.
Outlook
Global markets are facing various challenges including climate change, currency volatility, supply chain disruptions, geopolitical tensions and uncertainties in the macroeconomic environment. For the instant beverage industry, these have resulted in higher prices for raw materials.
Food Empire is closely monitoring the macroeconomic environment and geopolitical events for challenges that may potentially impact its business in the short term. In the longer term, the Group has put in place strategic growth plans in some of its fastest growing segments. It is optimistic that these initiatives, underpinned by continuous investments in brand-building activities, product innovation and new product launches, will support sustainable and quality business growth for the Group. The Group will continue to conduct periodic reviews and adjust its sales and pricing strategies to mitigate rising raw material costs.
Food Empire, Group Chief Executive Officer, Mr Sudeep Nair, said: “We believe Food Empire is well- positioned for future expansion in Asia where there is healthy economic growth, balancing some of the geopolitical challenges from our more traditional markets in Eastern Europe. Our diversification into ingredients manufacturing provides greater stability and control over the supply chain, while our investments in production capacity expansion for our own-brand products enable us to support increasing demand from key markets.”
