Thursday March 1, 2012
Sozo counts on halal ops
KUALA LUMPUR: China-based Bursa Malaysia-listed foodstuff manufacturer Sozo Global Ltd, which plans to invest RM16mil to expand its halal food processing operations, expects the business to contribute 40% to group revenue next year.
Chief executive officer Shen Hengbao said the group was looking to sign a memorandum of understanding with a Malaysian company to acquire a factory and an adjacent piece of land in Negri Sembilan.
“We're spending about RM8mil in the first phase involving the purchase of the factory, which is close to 5,000 sq m in land area and is already producing RM12mil worth of food products,” he said at a briefing.
Shen added that Sozo was looking to spend an additional RM8mil to build another factory at the adjacent land.
Financial controller Alex Khor said the initial RM8mil was for the acquisition of the factory, land and working capital while the remaining RM8mil would be utilised later to build the second factory.
“For the second factory, RM4mil to RM5mil is allocated for construction while RM3mil will be for working capital,” he said.
For the financial year ended Dec 31, 2011, Sozo posted a net profit of RM113mil, up from RM101.1mil in the same period a year ago. Its revenue rose to RM412.8mil against RM410.5mil previously.
The Shandong-based company has an extensive product range comprising frozen or vacuum-cooked gourmet meat, frozen vegetable, snacks, asparagus tea and canned food.
Most of its products are exported to Japan, South Korea and Europe.
Shen said the company was currently setting up its third production plant in China specifically for halal-certified products.
He said as the capacity boost at its plants would be completed towards the end of this year, contribution from this segment would not be significant until next year.
Khor said there was only three months contribution from the halal segment for this year but he still expected the company to grow steadily. However, he expects a “very marginal” contraction in profit margin due to the cost to be committed for the expansion of its plants.
Shen said Sozo hoped to penetrate the Middle East, Indonesia and other Asean markets.