Malaysia Food and Drink Report Q4 2011

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Malaysia Food and Drink Report Q4 2011 Published on August 2011

Report Summary While Malaysian export growth is expected to be relatively subdued in the near term, we remain optimistic that domestic demand will remain resilient on the back of a robust labour market and moderating inflationary pressures. Over the longer term, Malaysia will continue to provide exciting opportunities for consumer goods companies and retailers. Our Asia team expects Malaysia to clock in a long-term average growth rate of 4.0% between 2011 and 2020, which should fuel rising incomes and employment growth. With more money to spend on basic essentials and a greater discretionary appetite, opportunities across the food, drink and retail universe will only get more exciting. Headline Industry Data - 2011 Per Capita Food Consumption = +3.8%; CAGR forecast to 2015 = +2.1% - 2011 Soft Drinks Sales = +12.4%; CAGR forecast to 2015 = +6.5% - 2011 Alcoholic Drinks Sales = +2.3%; CAGR forecast to 2015 = +2.6% - 2011 Mass Grocery Retail Sales = +10.2%; CAGR forecast to 2015 = +9.5% Key Industry Trends Malaysia's Mass Grocery Retail Potential Remains A Strong Attraction: Japanese retailer Aeon will invest JPY200bn (US$2.49bn) by 2013 to expand its business footprint in Asia, including in China, Malaysia and Vietnam. Aeon plans to introduce a convenience store chain called Ministop in Ho Chi Minh City in Vietnam, and plans to set up a shopping mall by 2013. Given that a strong pickup in private consumption is unlikely to materialise in Japan over the short-to-medium term and will continue to weigh on our outlook for Japanese retail, Japanese retailers including Aeon have been aggressively hunting for opportunities in overseas markets to secure their future growth. Malaysia, with a considerable lack of maturity in its mass grocery retail sector, therefore represents an attractive proposition for Aeon. Asahi's Desire For Permanis Unlikely To Be Quelled: Malaysia-based conglomerate CI Holdings has reportedly rejected Japanese brewer Asahi's bid for its subsidiary Permanis, which is primarily involved in the manufacture and distribution of beverages. Reports earlier had suggested that Asahi had launched a US$200mn offer for Permanis, which was rejected on the grounds that it undervalued the company. Given Asahi's massive investment war chest of around US$5bn for 2011 and the urgency of geographical diversification for the brewer, we will not be surprised if Asahi were to return with a better offer. Permanis could be a good addition to the company's portfolio.

Table of Content BMI Industry View SWOT Analysis

...... 5 .... 6

Malaysia Food Industry SWOT

..... 6

Malaysia Drinks Industry SWOT

.. 7

Malaysia Mass Grocery Retail Industry SWOT Business Environment

.8

..... 9

BMI's Core Global Industry Views

.... 9

Table: BMI's Core Views For The Food & Drink Industry

Malaysia Food and Drink Report Q4 2011 (From Issuu)

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.... 17

Table: Asia Pacific Food & Drink Risk/Reward Ratings ' Q4 2011 Malaysia Food & Drink Risk/Reward Rating Macroeconomic Outlook

.... 21

22

.... 23

Table: Malaysia ' Economic Activity

26

Industry Forecast Scenario

.... 27

Consumer Outlook

...... 27

Food

30

Food Consumption

. 30

Table: Food Consumption Indicators ' Historical Data & Forecasts Confectionery

. 31

.. 31

Table: Value/Volume Sales Of Confectionery Sub-Sector ' Historical Data & Forecasts Trade

..... 32

Drink

...... 34

Hot Drinks

...... 34

Table: Beverage Sub-Sector Value Sales ' Historical Data & Forecasts Alcoholic Drinks

... 34

.... 35

Table: Beverage Sub-Sector Value Sales ' Historical Data & Forecasts Soft Drinks

... 36

...... 37

Table: Beverage Sub-Sector Value Sales ' Historical Data & Forecasts Mass Grocery Retail

... 38

... 38

Table: Mass Grocery Retail Sales ' Sales Value By Format ' Historical Data & Forecasts Table: Grocery Retail Sales By Format ' Historical Data & Forecasts (%) Food

. 40

..... 40

...... 41

Key Industry Trends And Developments

. 41

Attracting The Sights Of Foreign Players

. 41

Private Equity Players Taking A Stronger Interest In Malaysia Building Upon Superiority In Halal Food Market Overview

. 43

Food Production

.... 43

Confectionery

... 42

. 43

.. 44

Halal

. 44

Agriculture

...... 45

Dairy Drink

...... 32

. 45 ..... 47

Key Industry Trends And Developments

. 47

Malaysia An Important Part Of Multinationals' Arsenal Mixed Production Outlook

...... 47

... 48

A Continued Strong Showing In The Drinks Sector Market Overview

49

. 50

Soft Drinks

...... 50

Hot Drinks

...... 50

Alcoholic Drinks

.... 51

Mass Grocery Retail

. 52

Key Industry Trends And Developments

. 52

Malaysia's MGR Potential Remains A Strong Attraction Carrefour's Malaysian And Singapore Sales Come To A Halt Dairy Farm Can Look Forward To Continued Strong Growth

Malaysia Food and Drink Report Q4 2011 (From Issuu)

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. 53

Leading Retailers

... 55

Table: Structure Of Malaysia's Mass Grocery Retail Market By Estimated Number Of Outlets

... 56

Table: Structure Of Malaysia's Mass Grocery Retail Market ' Value Sales By Format (US$bn)

. 56

Table: Structure Of Malaysia's Mass Grocery Retail Market ' Value Sales By Format (MYRbn)

56

Table: Average Sales Per Outlet By Format ' 2010 Competitive Landscape

...... 56

.. 57

Consumer Share Price Analysis

57

Table: Kuala Lumpur Consumer Index Composition Key Players

..... 57

... 61

Table: Key Players In Malaysian Food & Drink Sector

61

Table: Key Players In Malaysia's Mass Grocery Retail Sector Company Analysis Food

... 63 63

Dutch Lady

..... 63

Yeo Hiap Seng (Malaysia) Drink Permanis F & N Berhad

... 65

...... 67 .. 67 . 69

Mass Grocery Retail Dairy Farm

... 71 ..... 71

Tesco Malaysia Carrefour

...... 73 . 76

AEON Malaysia BMI Methodology

..... 78 ..... 79

Food & Drink Business Environment Ratings Table: Returns Table: Risks Weighting

.... 81 ...... 82 .. 82

BMI Food & Drink Industry Glossary

.. 83

. 83

Mass Grocery Retail

..... 83

BMI Food & Drink Forecasting And Sources How We Generate Our Industry Forecasts Sources

...... 79

80

Table: Weightings Food & Drink

.... 62

... 85 ...... 85

.... 86

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