Malayan Flour Mills Bhd
(MFM) has posted a strong first quarter ended March 31, 2026 (1Q26) with earnings up 28.4% year-on-year to RM42.5mil, driven by higher sales and margins at its flour milling, grain trading business and integrated poultry segments.
The outlook for the quarters ahead, however, could depend on the layered impact that the Iran war will have on economies in the region and the global commodity market.
MFM buys three of the most traded agricultural commodities in the world – corn, soybeans and wheat – for its core flour milling, grain trading, animal feed and integrated poultry businesses.
Analysts are already warning that the Iran war will lead to lower yields and higher prices in the near future due to supply chain disruptions.
This is a concern that MFM acknowledges as it needs to secure supplies for its operations in Malaysia, Vietnam and Indonesia.
The 1Q26 results suggest the impact so far on its business has been muted as prices of wheat, soybean meal and corn have held steady due to ample global stock levels built from the previous crop season, but MFM fears a prolonged conflict might change that balance.
“Our business performance is closely tied to how long the conflict continues. If it continues for an extended period, it could eventually lead to broader energy and economic disruptions that affect the global financial system overall.
“At the moment, prices are still relatively stable because global stock levels for commodities such as wheat, corn, and soybeans remain high, which helps cushion against sudden price increases.
“However, fertiliser availability remains a concern and is expected to impact the coming season, particularly in April and May during the wheat and soybean planting period. Some regions, including the United States, are already reducing wheat and corn acreage.
“From our perspective, if weather conditions worsen or geopolitical tensions continue for a prolonged period, the current price stability could begin to shift,” MFM executive deputy chairman cum managing director Teh Wee Chye tells StarBiz 7.
Volatility in prices of agri commodities can have a major impact on the company’s margins. If operational margins go in its favour, MFM will have a strong financial year and vice versa.
Having experienced crises, from the 2008 financial crisis to the Covid-19 pandemic and the Ukraine-Russia war escalation, Teh is clear on what MFM needs to focus on now.
“We have to stay disciplined on operations, procurement and partnerships to respond better across the commodity cycle.
“We use our own jetty (in Manjung, Perak) to run combo shipments of wheat, corn and soybean meal. This helps us move raw materials faster, optimise silo use and shorten the cash conversion cycle.
“We are expanding silo capacity so we can hold two to three months of inventory, which gives us a better buffer against supply disruptions and price swings. We also use forward purchases in the futures market and buy goods in transit to manage pricing risk more actively,” he says.
Teh adds that MFM’s joint venture (JV) with Toyota Tsusho Corp is a plus, as it gives MFM access to global market intelligence and sourcing networks, including facilities in northern Brazil.
That strengthens MFM’s procurement capabilities and helps secure competitively priced raw materials when markets are disrupted, he says.
The group sources wheat from the United States, Canada, Australia, Ukraine and Russia, while corn and soybean meal are brought in from Brazil, Argentina and the United States, mainly for the feed business.
The group has flour mills in Malaysia, Indonesia and Vietnam, while corn and soybean meal are mainly for its integrated broiler production business that is confined to Malaysia.
Teh said MFM’s 30%-owned Indonesian flour milling business looks set to remain under pressure due to the weaker rupiah and cost pressures, despite its improved performance in 1Q26.
Growth in the near term could come from its broiler operations in Lumut, Perak.
MFM’s integrated poultry operations is looking at technology as an enabler to improved quality of products to clientele requirements.
Its JV with Tyson Foods operates state-of-the-art primary processing plants built to US Department of Agriculture and British Retail Consortium standards.
“We are also implementing precision farming through climate-controlled houses that can accommodate 52,000 chickens per house, together with WiFi-linked data analysis to help predict harvesting curves and ensure the birds meet the specific genetic and weight standards required by quick service restaurants (such as KFC and McDonald’s),” Teh says.
For MFM’s 60th anniversary, the company taps growth opportunities downstream with the launch of a line of ready-to-eat microwaveable meals, marking its entry into the growing convenience food market.
This is part of the company’s plan to add value and further process its protein products, while capitalising on the high per capita consumption of poultry in Malaysia.
Although there may be headwinds to consider, MFM has several expansion plans currently under discussion or in progress across its Asean footprint.
Teh says the group will spend RM100mil to expand its flour milling operations in Malaysia and Vietnam over two years.
Some RM80mil of the money will be spent on raising the milling capacity in Vietnam from 2,000 tonnes to 2,500 tonnes per day, as the operations there are currently running at full capacity.
In Malaysia, it is investing in additional silo storage and expanding its food processing capabilities.
This is all in preparation of wanting to grow MFM’s capacity to be able to handle three to four million tonnes of wheat, corn and soybean meal annually by 2030, from about 1.5 million tonnes as at the end of last year.
Financially, MFM remains focused on balancing growth with shareholder returns.
The company has maintained the dividend payout at 30% of its earnings.
Teh says the company can financially manage its obligations. He is the largest shareholder in MFM with a deemed interest of 23.1%.
