From left: Farm Price Holdings Bhd independent non-executive director Yap Koon Roy, Farm Price independent non-executive director Doreen Tea Sor Hua, Farm Price executive director Shirley Liew Tsuey Er, Farm Price managing director Dr. Lawrence Tiong Lee Chian, Farm Price independent non-executive chairman Pauzi Yaman, Bursa Malaysia Bhd market operations director Tay Yu Hui, Farm Price independent non-executive director Lim Poh Seong, Alliance Islamic Bank Bhd chief executive officer Rizal IL-Ehzan Fadil Azim, Alliance Islamic Bank senior vice president, head of corporate finance Tee Kok Wah.
KUALA LUMPUR: Farm Price Holdings Bhd made a strong debut on the ACE Market, opening at 48 sen per share or 100% over its initial public offering price of 24 sen.
The share price of the first wholesale vegetable distributor on Bursa Malaysia closed at 41 sen with an intra-day high of 49 sen.
It was also the most active stock with 147.5 million shares changing hands.
Farm Price managing director Lawrence Tiong Lee Chian shared that the group will focus on expanding its market reach to Singapore as there is growing demand for its products in the nation.
“We want to set up a base for marketing and sales as our revenue has been growing there,” he said during a press conference after the company’s listing ceremony yesterday.
He revealed that Singapore’s market contribution to the group’s business accounted for 25% of the total revenue for the first quarter of its financial year ending Dec 31 2024 (1Q24).
“In 2Q24 to date, Singapore’s market contribution amounted to 28%, which is an increase from the previous quarter,” he added.
Moving forward, Tiong holds an optimistic outlook, expecting double-digit growth in revenue and profit after tax for FY24 due to robust demand for fresh vegetables.
Commenting on the possible removal of fuel subsidies this year, Tiong said it would not heavily affect its business as its three, five and 10-tonne lorries do not contribute significantly to high fuel consumption.
Additionally, Tiong said the group’s business would not be greatly disrupted by weather conditions, lack of labour and rising vegetable prices, citing the essential nature of the industry and the extensive network of suppliers it has.
“Post Covid-19, the supply of vegetables, vegetable prices and cost of shipping have normalised,” Tiong shared.
Some 80% of the group’s supply of vegetables is from overseas suppliers in Vietnam, China, Indonesia and Thailand, and 20% from local suppliers, he added.
“If one of the farming areas is affected by floods, we will leverage our extensive network of suppliers to mitigate the shortage of goods,” Tiong said.
He highlighted that the group is not affected by possible trade restrictions as it is not highly dependent on any one supplier.
“Despite India and Pakistan banning the exports of red onions, we are still able to source it from China and continue supplying our wholesale distribution business,” he said.
The group plans to expand its centralised distribution centre in Senai, Johor, with an additional built-up area of approximately 84,790 sq ft and increasing its cold-room capacity from 29,669 pallets to roughly 40,000 pallets annually upon completion.
It is also expanding its value-added processing areas to capitalise on the growing demand for its pre-packaged and fresh-cut vegetables, which boasts higher margins.
With the additional space, Farm Price will be investing in new machinery and equipment in anticipation of an increase in orders and to reduce the use of labour, as well as to expand its transportation fleet.
