Kawan Food banking on China

By Zurinna Raja AdamPublished: 2010/04/13


Frozen food manufacturer Kawan Food Bhd (7216) is optimistic that China will make up as much as 70 per cent of its sales over the next two years.

In 2006, Kawan Food bought a 4-hectare land in Nantong for US$5 million (RM15.9 million) to build a factory.

The plant in Nantong, which is in Jiangsu Province, will produce paratha and chapati among others, of which more than half of the output will be marketed in China.

With additional production capacity, chief executive officer Jon Fang said the company is also looking to venture into other emerging markets.

Kawan Food is well-known for its parathas and chapatis, capturing 60 per cent of its sales each year. It produced more than 200 million parathas in 2009.
Last year, it reported a net profit of RM13.5 million on revenue of RM88 million.

"Sales increased by 17 per cent last year despite the economic slowdown. This is because our food was inexpensive which went well with the credit crunch," Fang said in a recent interview.

The company hopes to sustain its performance this year as it plans to venture into new markets, put more effort in building its brands and continuously introduce new innovative products.

The export-focused group sells 70 per cent of its products to the UK, France, Germany, Sweden, the Middle East, Japan, Hong Kong, New Zealand and Australia. The US is the group's biggest market, making up about 35 per cent of its export sales.

Locally, the group has just started operation on its second facility on a 1.6ha land in Shah Alam. The RM22 million plant will double its existing production capacity to 50,000 pieces of paratha per hour.

Kawan Food offers more than 90 products, which include vegetarian selection, tandoori naan, soya protein-based product, samosa, mini buns, flower rolls and dumplings.