Sunday 14 Jul 2024
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KUALA LUMPUR (Aug 30): PPB Group Bhd’s 80%-owned FFM Bhd said it has no present plans to increase the prices of its flour products, brands “Cap Sauh” and “Blue Key”, after it raised them about 15% in the first half of 2022 (1H22).

FFM group director and chief executive officer Jeremy Goon, however, said that its unit Italian Baker Sdn Bhd, which produces the "Massimo" brand of baked goods, is considering a price hike.

“Margin is still a squeeze [on flour products]. For now, we will not be raising prices, but we will see. There is no plan to raise flour prices at the time. We have raised [them] twice [when wheat prices rose], but not for the last two months. In 1H22, we raised about 15%,” Goon said during the PPB Group’s media and analyst briefing on its first half of 2022 (1H22) financial results on Tuesday (Aug 30).

He also indicated that the price of raw materials constitutes 80% to 90% of the total cost of flour.

When asked if “Massimo” will follow its rival “Gardenia” by Gardenia Bakeries (KL) Sdn Bhd, which is increasing the prices of its products from Sept 1 due to inflation of raw materials prices, Goon said the group is reviewing it.

“The last time we increased the price for ‘Massimo’ was on Jan 1, and there has been no price increase this year since. There has been a recent announcement that ‘Gardenia’ will increase prices come Sept 1. We will review (on ‘Massimo’ products) and announce sometime in the next few weeks if we decided to revise prices upwards.  

“The raw materials price has increased significantly for everything, including all the bakery ingredients,” he said.

Goon said the price hikes early this year across the "Massimo" products were about 8% to 10%, while ingredient prices had gone up between 15% and 40%.

In terms of outlook for its livestock farming, Goon said it remains uncertain as there is no "real change" upon the latest announcement that the government will maintain the ceiling price of RM9.40 per kg for standard chicken and the three sen subsidy for eggs.

On Monday (Aug 29), chairman of the Special Task Force on Jihad Against Inflation, Tan Sri Annuar Musa, said the Cabinet also agreed that certain farms rearing chickens could begin exporting after getting approval from the Agriculture and Food Industries Ministry in October.

"There is no change [on the announcement] except that some farms will be allowed to export, so [there] has been no real change, perhaps things will change later on this year. However, it doesn't help in regard to, if you're a farmer, in terms of your planning, this is not going to encourage too much production for poultry as long as this export ban concern is there."

He said the outlook for animal feed milling, another operation of FFM, also depends on how robust the poultry sector is.

At market close on Tuesday, PPB's share price gained 60 sen or 3.53% to RM17.60, bringing the group a market capitalisation of about RM25.04 billion.

Edited ByLam Jian Wyn
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