PPB on RM592mil expansion drive

By Star Online: Business
8th March 2013

Bulk of the money to go to grains trading, flour and feed milling segment

The group also intends t o invest in three new cinemas with a total of 28 new screens this year

KUALA LUMPUR: PPB Group Bhd has committed to spending up to RM592mil over the next two to three years to expand its businesses, which include grains trading, flour and feed milling, property investment and development, waste management and utilities, as well as film exhibition and distribution.

The bulk of the money, totalling some RM307mil, will be spent on its grains trading, flour and feed milling segment, with a large chunk going into flour mills in China as well as in other countries with high populations like Vietnam and Indonesia, said its managing director Lim Soon Huat.

The grains trading, flour and feed milling segment was the company's largest operating profit contributor as at last year, contributing some 62% to its total operating profit.

The group also intends to invest in three new cinemas with a total of 28 new screens this year, said Koh Mei Lee, the chief executive officer ofGolden Screen Cinemas Sdn Bhd (GSC), a wholly owned unit of PPB.

It currently has 27 cinemas with 228 screens. The film exhibition and distribution segment was the group's second-largest operating profit contributor at 20.13%.

Apart from this, some RM57mil will be spent on investments for its bakery division, which produces the Massimo brand of bread loaves and rolls, while the remaining will be used to expand its other businesses, Lim told a press and analyst briefing here.

He expressed confidence that the local economy would continue to grow.

“We are confident that the economy will continue to grow, we haven't seen any drop in consumer spending,” he noted.

He said the group's waste management and utilities segment had ongoing projects worth some RM80mil, while it had bidded for some RM600mil worth of local jobs in this area.

He also noted that the group would like to grow its property segment's operating profit contribution, which stands at 11% now.

In May, the segment will see the launch of shophouses in Sungai Petani, Kedah, Lim said, but did not reveal the gross development value of the project, as it was still at the planning stage.

PPB made a net profit of RM842.2mil for the financial year ended Dec 31, 2012 against a net profit of RM980.4mil a year earlier due to lower contribution from its associate company, Wilmar International Ltd, in the first two quarters of 2012 and losses incurred in the livestock farming segment.

Lim said the company was not looking at raising its stake in Wilmar, for now. “It is not a priority,” he said.

[Source]