SilverBird

Bakery products manufacturer is adopting a global strategy for its food business as it capitalizes on its strategic collaboration with its major shareholder Koperasi Permodalan Felda Malayasia Bhd.

Its MD Datuk Jackson Tan says the company could grow its portfolio to include other basic food products in various countries.

A transformation will certainly be a boost for its major shareholders – LTH, the single largest shareholder with a 23.34% stake and Koperasi Permodalan Felda with 13.36% stake.

Koperasi Permodalan Felda owns 51% of Felda Holdings Bhd, with the remaining 49% held by Felda Global Ventures Sdn Bhd. Felda Holdings has control over some 800000ha of plantation land – a large chunk of which it manages for settlers – on which crops such as oil palm, cocoa and sugar cane are cultivated. Felda Holdings and LTH had also set up a joint venture which owns plantation tracts in Indonesia .

In the downstream, sector, Felda Holdings which owns 71 palm oil mills, manufactures cocoa based products, including cocoa powder and butter. Meanwhile Felda Global Ventures, which is due for listing on Bursa Malaysia in 2012 has multi-crop plantations across the Americas , Asia, Australia and the Middle East .

Silver Bird’s wholly owned subsidiary had in June 2011 signed a shareholders’ agreement with several parties to establish a food manufacturing entity … KPFQ.

Under the agreement, Koperasi Permodalan Felda will be the single largest shareholder with a 60% stake in KPFQ while Silver Bird and Consortium Fresh Food Bhd will own 30% and 10% respectively.

This means Silver Bird will be able to generate a new income stream in the form of logistics fees when it distributes KPFQ’s food products.

Global expansion is seen as a key objective of the KPFQ JV. Its collaboration with Koperasi Permodalan Felda will enable Silver Bird to grow its product portfolio for the domestic and export markets.

In Malaysia , Silver Bird is expanding its bread production capacity and distribution channels. It is also planning more product launches to grow its share in the domestic premium bread markets to 30% with the next two years.

Apart from High 5 brand of sandwich bread, the company manufactures cakes, cereals, snacks and drinks.

Its financials have improved, with net profit rising 35% to rm4.93 million in FY2011 ended Oct 31.

Malaysia accounts for 97% of Silver Bird’s revenue, with the balance from its Singapore operations.

Silver Bird had cash of rm38.4 million versus debts of rm151.46 million as at Oct 31, 2011, translating into a net debt of rm113.06 million or net gearing of 0.5 times. Net assets per share stood at rm0.52.