| |
|
 |
| |
NEWS
ADABI'S GROWTH STRATEGY
Monday, September 24, 2007
The Star
LEADING bumiputra food manufacturer Adabi Consumer Industries Sdn Bhd
sees the country's growing population to be the main driving
factor boosting the industry's sales.
Managing director and founder Datuk Syed Manshor Syed Mahmood
said a bigger population would lead to higher food consumption.
The influence of western lifestyles and the
growing number of working women will also benefit the packaged
food industry in Malaysia.
“The demand for new and convenient packaged food products will rise
because consumers find themselves subject to time constraints in view of
their busy lifestyles,” he told StarBiz at Adabi's head office and
plant in Rawang, Selangor.
| |
Datuk Syed Manshor Syed
Mahmood wiith some of the chicken flavoured spices. |
|
Nevertheless, Syed Manshor said, the higher costs of raw
materials and the rising oil prices had shrunk Adabi's profit
margin.
The company's revenue grew from RM87.3mil in
2005 to RM97.1mil in 2006, of which 5% was derived from export
markets.
By introducing more products, it expects revenue to increase
further to RM102mil this years.
However, Adabi's pre-tax profit fell slightly
to RM4.5mil in 2006 from RM4.8mil in 2005 due to the higher
costs of packaging and raw materials.
“The demand for commodities has escalated. Combined with a lower supply
due to poor harvest, this has led to the high price,” Syed Manshor said.
He said the oil price hike had pushed up the
cost of packaging materials. Therefore, Adabi forecasts its
pre-tax profit to remain at RM4.5mil this year.
To improve sales and grow its business, the
company would maintain its strategy of launching new products
annually.
Adabi, set up in 1984 in Batu Caves, has used that strategy over the
years. “Introducing more products to the market would help to grow our
business rapidly,” Syed Manshor said.
| |
The factory worker
checking the Adabi Kicap products.. |
|
He said the company would spend about
RM500,000 on research and development (R&D) annually to come up
with new products that met consumers' demand.
| |
Adabi's warehouse at
Rawang Integrated Industrial Park, Selangor. |
|
“We still believe this is the only way
to move forward. R&D and new products have helped the company to
grow faster in the past years,” he said.
Syed Manshor said although consumer expenditure on food in Malaysia
grew strongly over the last two years, the food manufacturing
industry had reached maturity.
The packaged food sector registered a growth of only 3% to RM12.1bil
in 2005 from the previous year.
“We expect growth to remain between 3% and 4% annually over the next
five years,” Syed Manshor said.
Currently, Adabi has over 70 types of products in five major categories
– curry, soup, paste, flour and sauce.
Adabi recently launched chocolate and strawberry flavoured flour mix,
fish soup spices and assam jawa.
The company, whose major market segment comprises Malays, plans to introduce
more products that suit all Malaysians. Its products are also exported to Indonesia,
Singapore, Japan, Hong Kong, the Middle East and Britain.
Adabi's products are halal. The company has received the MS890:1984
certification from Sirim, and the SuperBrand status from the Malaysian Superbrands
Council and Reader's Digest.
According to Syed Manshor, Adabi is still the market leader for its sup bunjut
products, which have captured about 75% market share.
“Today, our major competitors are the big boys like Nestle, Unilever and
also Baba's, which is the leader in curry powder,” he said.
In terms of packaged food, Adabi has about 0.2% market share compared with Nestle's 14%.
Its curry products was the second most popular after Baba's with about 13% market share,
Syed Manshor said.
Due to stiff competition in the marketplace, Adabi aims to introduce products like Adabi
Tamarind Seedless Xtra as well as chicken and tom yam-flavoured stock cube within a year.
|
|
|
| |
|
