KUALA LUMPUR (June 21): Agricore CS Holdings Bhd (KL:AGRICOR), a food ingredient supplier, wants to diversify its customer base to tap into international markets with a keen focus on China, the Middle East, and neighbouring countries like Vietnam.
Overseas markets, including Singapore, Indonesia, China, Australia, and Hong Kong, contributed only 1.6% (RM2.13 million) of Agricore’s total revenue for the financial year ended Dec 31, 2023 (FY2023). The majority of sales still originated from its Malaysian customers.
“Starting from this year, we are participating in some of the international exhibitions as an exhibitor. We are eyeing China, the Middle East, as well as some neighbouring countries like Vietnam to explore overseas markets,” marketing manager Daniel Tan told the media following the company's listing ceremony here.
According to Agricore, it does not foresee any disruption to the supply chain for distribution and production of its plant-based agricultural food ingredients, including starch products, beans, pulses, and grains.
“We now have an extensive network of 80 suppliers from 13 countries, providing wide product offerings of 69 stock-keeping units to our customers,” Agricore chairman Fu Yew Sun said. As of 2023, Agricore had six suppliers that had maintained business ties with the company for over five years, and three major suppliers had been partners for more than a decade.
Agricore also markets those products under its house brands, such as Pokok Agricore, as well as third-party brands. Additionally, it produces and sells food additives and fried shallots under the brand names of Bapas and Cap Pokok.
Additionally, managing director Oon Boon Khong highlighted that there is “a lot of big room for Agricore to grow” in the southern and central regions of Peninsular Malaysia through the setting up of a new storage warehouse facility in Klang, Selangor.
“The central region warehouse is very strategic. When we set up the warehouse there, immediately we can deliver to customers. And of course, there are some savings in terms of transportation as well, saving at least RM700,000.
Agricore has earmarked 74% of its initial public offering proceeds (RM18.9 million) for the purchase of inventory and expansion of its sourcing and distribution business, of which RM13.7 million will be utilised for its Bukit Minyak premises, with the remaining RM5.2 million going to a new regional storage facility in Klang.
Additionally, it plans to use 10% of the proceeds or RM2.7 million to set up a new storage facility, also in Klang, with a built-up area of 30,000 sq ft. The remainder of the proceeds will be used for staff recruitment and listing expenses.
For the first quarter ended March 31, 2024 (1QFY2024), Agricore reported a net profit of RM1.5 million, on the back of revenue of RM36.86 million.
The company said it recognised profit before tax of RM2 million and profit after tax of RM1.5 million for the quarter under review, after deducting administrative and other expenses of RM1.8 million, and selling and distribution expenses of RM1.3 million.
At Friday's noon market break, Agricore was up 77% or 38.5 sen at 88.5 sen, with 75 million shares traded, giving the company a market value of RM179.5 million.