Guan Chong earnings soar on strong cocoa demand

PETALING JAYA: GUAN CHONG BHD the world’s fourth-largest cocoa grinder, says strong demand for the chocolate ingredient worldwide and rising product prices have boosted its earnings and revenue.

Net profit in the second quarter ended June 30 surged 42% to RM61mil from RM43mil a year ago.

Revenue soared 53% to RM753mil compared with RM491.6mil previously.

The jump was supported by a 32.6% increase in the sales volume, coupled with higher average selling prices of cocoa ingredients.

“We are benefitting from encouraging growth in global demand for cocoa ingredients, especially in Asia due to rising consumer affluence and appreciation of chocolate and related products, ” managing director and CEO Brandon Tay Hoe Lian said in a statement.

Meanwhile, crop yield and production continues to be supported by favourable weather conditions, thus benefitting the industry as a whole.

“We look forward to delivering a continued strong performance for the second-half of 2019,” Tay said.

Global chocolate demand is predicted to have a compounded annual growth rate of 4.2% over the next 10 years, according to a report by Prudour Research, with Asia being the key growth market.

The demand in Asia saw cocoa-grinding activities rising 16.3% in the second quarter of 2019, according to the Cocoa Association of Asia.

“With our recently expanded capacity in early 2019, we are well poised to capture more sales from the global food and beverage industry, ” Tay said.

Guan Chong currently has a combined grinding capacity of 250, 000 tonnes per annum, with 130, 000 tonnes from its two factories in Pasir Gudang, Johor, and another 120, 000 tonnes from its plant in Batam, Indonesia.

The group also has a cocoa cake and butter grinding facility in Delaware in the US.

Source: The Star