The S1000 companies involved in F&B achieved a combined turnover growth of 27.85% from $14,784,544,000 to $18,902,604,000 during the ranking period, with those in the Manufacturing sector leading the surge at 30.24%, followed by the Wholesale sector at 26.60% and the Hotels/Food Establishments sector at 21.10%.

11 Public-listed companies made it to the S1000 ranking with remarkable results. The combined turnover of these 11 companies during the ranking period amounted to $6,375,199,000 or 34% of the combined turnover generated by all the S1000 companies involved in F&B.

 

S1000 Public-listed companies in F&B industry	Turnover ranked Net	profit ranked
ASIA PACIFIC BREWERIES LIMITED	146th	86th
WANT WANT HOLDINGS LTD	170th	74th
QAF LIMITED	209th	377th
PETRA FOODS LIMITED	242nd	289th
CEREBOS PACIFIC LIMITED	256th	165th
SINGAPORE FOOD INDUSTRIES LIMITED	299th	299th
AURIC PACIFIC GROUP LIMITED	617th	539th
SUPER COFFEEMIX MANUFACTURING LTD	687th	397th
FOOD EMPIRE HOLDINGS LIMITED	696th	428th
CHINA DAIRY GROUP LTD	743rd	584th
ABR HOLDINGS LIMITED	901st	607th

The commendable performances posted by F&B related companies were in no small part attributable to revenue contributions from the fast growing overseas markets which include China and the Eastern European region. Data obtained from IE Singapore showed that there are nearly 700 food manufacturing establishments in Singapore that are involved in various aspects of food production. Of these, more than half are catering mainly to the export markets. Total trade generated by the industry in 2005 was S$14.5 billion, of which nearly 40% was contributed by exports.

In China and Eastern Europe, continuous liberalization and economic growth have led to the rise of the middle-income group. The economic boom and increasing urbanization in China, for example, have resulted in greater spending power of the Chinese. This has resulted in the emergence of an increasing number of middle-income group earners who are now more able to afford higher-end products. Not only are they now more inclined to dining at posh restaurants, they also seek to acquire higher-end F&B products to fulfill their lifestyle expectations.

Asia Pacific Breweries (APB), ranked 29th position in DP Information Group’s list of Top 500 Public-listed companies (PLC 500), is one company that has been very successful in tapping on the opportunities available in the emerging and fastest growing regions. Such initiatives have resulted in increase in the proportion of its Profit before Interest, Taxation and Exceptional item (PBIT) (PBIT) generated from outside Singapore from 32% to 80% over a short span of 15 years in 2005. The Group reported a jump of 15% in attributed net profit before exceptional item during FY2006 to $131.6 million. 

APB had embarked on its regionalization program in the 1990’s and to-date has 28 breweries operating throughout Asia Pacific. In recent years, the Group further expanded its network in China, the world’s largest beer market with the strategic acquisition of stakes in two Chinese brewery groups, Kingway Brewery and Jiangsu Dafuhao Breweries, via Heineken-APB China, in 2004 and 2005 respectively. The Group acquired breweries in Sri Lanka in 2005, and in 2006 strengthened its position in Indochina with the acquisition of 2 breweries in Vietnam in 2006, and successfully secured licenses to build a second brewery in Hyderabad, India. By 2007/08, it expects to extend its regional network of breweries to 34 when all its breweries in emerging markets such as Laos, Mongolia, Sri Lanka and India will be completed and operational. 
In Europe, rapid economic growth coupled with the increasing liberalization of markets in Eastern Europe has propelled these countries into the limelight. The economic growth associated with Eastern Europe’s accession to the EU is likely to be a sustainable one. Current estimates suggest that the average nation there has as much as 30 years of above-trend growth ahead of it before it reaches the GDP per capita levels common in the west. That makes it an attractive market for investors.

The busier working lifestyle of these middle-income group and younger generation represents a higher demand for convenient products such as pre-packed foods/beverages products. An office executive would prefer to have a cup of coffee that could be served within minutes during a short break. The opportunities created by the trend are also encouraging. The ethnic packaged food market has witnessed enormous growth over the last five years. Data from IE Singapore showed that since 1999 consumer spending on ethnic packaged foods in Europe has been growing at a compound annual growth rate of 14%. By 2009, it is predicted that sales of packaged ethnic food will hit $7 billion Euros in Europe. 

Food Empire, an F&B exporter ranked 153 in DP Information Group’s list of PLC500 companies, is one company that had a successful foray in Eastern Europe. According to the recent release on its performance in 2006, the Group turned in a strong performance with revenue growth of 27.2% to $234.1 million. 

Sale of beverage products, especially the Group’s MacCoffee brand, increased by 27.8% to S$217.8 million contributing to 93.0% of the Group’s revenue whilst its non-beverage sales rose by 20.6% to $16.3 million. The Group’s venture into the Eastern European market had paid-off well. Revenue from the Russian market, the Group’s largest market, rose by 17.8% to S$130.7 million accounting for 55.8% of the Group’s revenue in financial year 2006. The other Eastern Europe and Central Asia markets (which include Ukraine, Kazakhstan and Uzbekistan) contributed to 38.1% of the Group’s revenue – an increase of 45.4% to S$89.1 million. MacCoffee, the Group’s main brand name is today the top household brand in Russia, Eastern Europe and central Asia.


Of late, the Singapore government has also made inroads to the Middle-East, increasing its ties with the leaders in the region. Visits by senior level leaders and talks of FTA represent government efforts in establishing connection and providing aids to local companies’ expansion. Additionally, the Halal food industry, comprising of the Middle East region and the other Islamic countries, represents a huge market. “The global industry for halal products and services is estimated to be worth up to US$2.1 trillion annually”, said Jamil Bidin, Malaysia’s Halal Development Corp. Chief Executive, at the World Halal Forum held in Kuala Lumpur during May 2006. In this market, Singapore’s F&B companies could also capitalize on their experience with the local Halal food market, so as to better compete in the Middle East and the global Halal market.

Singapore’s F&B companies are presented with lucrative opportunities in emerging markets inclusive of China, Eastern Europe, India and other regions. These markets form a strong engine that could spur the future growth and expansion of the Singapore’s F&B companies, and bring their contributions to the Singapore economy to a higher level. It is therefore important that Singapore’s F&B companies continue to evolve not only to cater to a local market that has become increasingly internationalized in its palette but also to cater to the fast changing and growing global market. 

Article Contributed By DP Information Group
www.dpgroup.sg