COCOA-DERIVED food ingredient maker Guan Chong Bhd is targeting to achieve higher revenue of RM394.7mil in its financial year to Dec 31, thanks to improved cocoa powder and value-added product sales.
Chief executive officer Brandon Tay Hoe Lian said the company had projected lower revenue of RM335.1mil for the 2004 fiscal year owing to longer gestation period required to produce a wider range of cocoa powder and value-added products.
“We are confident of achieving higher revenue this year. We are planning to move up the value chain by producing more value-added products to secure a long-term customer base,” Tay told a media briefing in conjunction with Guan Chong’s proposed listing on Bursa Malaysia main board and the launch of the company's prospectus in Kuala Lumpur yesterday.
For the current year, the company expects pre-profit to increase to RM20.4mil, higher than the estimated RM16.47mil for 2004.
“In the past, we produced natural cocoa powder. With the expansion of our product range, we will be able to penetrate new markets including Eastern Europe and Russia,” Tay said, citing deodorised butter and cocoa powder produced through alkalised process as examples of value-added products.
He said the company planned to increase its cocoa powder production ratio to 25% of its overall cocoa-derived food production this year from 19% last year.
He attributed the expected increase to a wider range of consumer requests and higher margins following the rise in the price of cocoa powder.
“We expect to produce 12,000 tonnes of cocoa powder this year from 7,000 tonnes last year,” he said, adding that the company would export at least 5% of its cocoa powder to China.
Tay said the company, which had the largest market share of 35.4% in the cocoa-derived food ingredient industry, hoped to either maintain this share or raise it slightly.
From the flotation scheduled for next month, the company aims to raise RM38.5mil, of which RM20.8mil would be used to finance its expansion, RM13.7mil for working capital, and RM1mil for the acquisition of equipment for research and development. A further RM1.4mil will be used to repay bank borrowings and RM1.5mil for listing expenses.
Guan Chong’s listing will involve a public issue of 24 million new shares of 25 sen each. Of the total, 4.2 million are allocated for directors, employees and business associates and 12 million for public subscription. Some 7.8 million shares will be placed out.
The company is also making an offer for sale of 66 million shares of 25 sen apiece to bumiputra investors.
AmMerchant Bank Bhd is the adviser, managing underwriter and placement agent.
Did you find this article insightful?