MFM allocates RM300mil to improve grain, poultry operations

Malayan Flour Mills executive deputy chairman cum managing director Teh Wee Chye.

KUALA LUMPUR: Malayan Flour Mills Bhd (MFM) has earmarked RM300mil for capital expenditure (capex) for 2024 (FY24) to strengthen its growth.

In a statement, MFM announced that Dindings Tyson Sdn Bhd (DTSB), which oversees the group’s the poultry integration segment, plans to invest up to RM200mil in capex for FY24 to upgrade and expand breeder farms and further automate a poultry processing plant in Sitiawan, Perak.

Subject to business sentiment in the poultry market, particularly the quick-service restaurant (QSR) sector, the capex is meant to increase the processing plant’s capacity by over 20% from the current 280,000 birds per day to 340,000 birds per day.

MFM also plans to invest RM100mil to raise capacity at its flour milling operations in Malaysia and Vietnam.

The investment will include installing a new milling line with a 600-tonne per day capacity in Lumut, Perak and adding more flour silos and blending facilities at a plant in Vietnam .

MFM said the capex for both segments will be funded by internally generated funds and bank borrowings.

“We will continue to future-proof our two main businesses, with the objective to achieve economies of scale and have two growth engines firing at same time to take the group to the next level as a leading food-security player in the country,” executive deputy chairman and managing director Teh Wee Chye said.

In the first quarter ended March 31 (1Q24), MFM’s net profit rose 263% year-on-year (y-o-y) to RM37.9mil or earnings per share of 3.2 sen on improvements in its flour and grain trading segment, which saw better profit margins from lower raw-material costs during the quarter, as prices of wheat and grains eased.

Revenue for the period, however, was 9.08% lower y-o-y at RM751.6mil as global geopolitical events had a see-saw impact on both its flour and grain trading segment and poultry businesses.

“It is fortunate that our grain-trading segment has helped mitigate the doldrums faced by our poultry business. Meanwhile, we will leverage on the current stable supply of grain and wheat to continue strengthening our flour-milling profitability, at the same time fulfilling our social responsibility to meet the demand of consumers in the countries we operate in by investing in additional flour-milling facilities,” he said.