News

Food Empire Intends To Acquire 35% Stake In Non-dairy Creamer Producer

BackMay 17, 2000

SINGAPORE - 17 May 2000 - Mainboard-listed Food Empire Holdings, announced today it intends to acquire a 35% stake, consisting RM1.75 million (approximately S$785,000), in Ernsts Food Ingredients Sdn Bhd (Ernsts) to produce non-dairy creamer.

The remaining 65% stake in this joint venture company will be held by Penang-based Oriental Concept Sdn Bhd whose group of companies are in the business of processing grains, such as cereal flakes and oats, as well as spray-dried products.

Ernsts is planning to build a brand-new production facility, costing RM8.62 million, on 151,714 square feet of land in Butterworth, West Malaysia. The facility, which has a total built-up area of 40,000 square feet, is expected to produce 3,900 metric tonnes of spray-dried, non-dairy creamer annually mainly for the Malaysian market when it is operational by February 2001. The Company plans to expand its distribution network regionally in the near future.

The total project, costing RM13.92 million, would be financed by having a paid up capital of RM5 million, shareholders' loan amounting to RM5.3 million, and bank borrowings for the remaining RM3.62 million. Ernsts hopes to generate an annual turnover of RM11.4 million and and RM14.82 million in 2001 and 2002 respectively.

Non-dairy creamer is an essential ingredient in the production of 3-in-1 instant coffee, cereals, and other products. This investment is, therefore, a natural extension of Food Empire's core food and beverage business.

Said Mr Tan Wang Cheow, Managing Director of Food Empire Holdings, "Investing in such a venture is in line with our strategy of vertically integrating businesses that are related to our core food and beverage activities."

In addition, the plant will eventually produce ice-cream powder, bakery fat powder, soup and sauce creamer, skim milk powder filled with vegetable fat, and foaming creamer (for instant cappuccino products).

Food Empire Holdings Limited, listed on the mainboard of the Singapore Exchange, is a leading food and beverage company that manufactures and markets more than 40 instant beverage products under the brands Klassno, Temasek Royal, MacCoffee, Express and Fesbrew. Its products are mainly distributed to more than 30 countries in emerging markets such as Russia, Eastern Europe, Central Asia and Indochina.

 

FACT SHEET

Total land area 151,714 square feet
Location Butterworth, West Malaysia
Built-up area 40,000 square feet
Cost RM 8.62 million
Features:

The factory is divided into the following sections:

  • Liquid Preparation
  • Powder Drying incorporating a state-of-the-art Multi-Stage spray dryer. This dryer can convert most food ingredients to powder form, including those that are not easily processes by conventional spray dryers.
  • Packaging
  • Quality Control Laboratory (for testing and product development)

To ensure hygiene is kept to international standards, the plant is equipped with a fully-automated Clean-In-Place (CIP) system. This system automatically cleans all the production equipment by circulating washing solution, thus saving up to 640 man-hours a month.

Production Process:
  • Various food components of the non-dairy creamer are mixed together and processed.
  • Creamer emulsion is sent through a spray dryer, where the liquid is removed.
  • End product has excellent solubility and dispersibility as required by its customers.