Malaysia Food and Drink Report Q2 2009

Despite the global financial crisis, which has put pressure on companies to cut costs and has weakened consumer demand, Malaysia's food, drink and mass grocery retail (MGR) sectors have performed positively this past quarter, as can be seen in BMI's newly published Malaysia Food and Drink Reportfor Q209.

Malaysia's GDP growth forecast for 2009 has shrunk from an initial 3.1% to 1.4% and GDP growth for 2010 is expected to be just 3.2% (well down on recent levels), yet many companies remain optimistic.

Examples of such companies include: Fraser and Neave (F&N), which in January 2009 announced that for the financial year ending September 30 2008 revenue had increased 25% year-on-year (y-o-y) to US$992.0mn; Nestl Malaysia, which is anticipating y-o-y growth of 3% in FY08/09; and Dutch Lady Milk Industries, which is confident of achieving a better profit margin in 2009. Although remaining positive, these companies have conceded that caution is to be exercised over the coming year in light of the uncertainty surrounding global economic conditions.

In terms of expansion, most activity has occurred in the MGR sector, with retail majors Carrefour, AEON and Tesco all confirming intentions to proceed with expansion plans regardless of the impact the downturn in economic growth has had on consumer confidence. France's Carrefour wants to open at least five new stores in 2009 and both Japan's AEON and the UK's Tesco are to invest MYR250mn (US$69.3mn) on store openings. Although weaker consumer demand will in turn lead to lower retail spending, stores such as Carrefour and its peers are still likely to be the recipients of this spending, and this, coupled with the prediction that value sales through modern retail outlets are forecast to increase by 36.9% to US$5.49bn by 2013, may explain their commitment to expansion.

Activity in the past quarter seems to indicate that many are confident that the Malaysian economy can weather the storm and still pose an attractive opportunity for investors. BMI's latest industry forecasts certainly support this view. In addition to the above forecast for the MGR sector, we expect food consumption in local currency terms to increase by 22.7% to 2013, and soft drink sales to increase by 32.9% over the same period.

• Executive Summary
• Business Environment
• Food
• Malaysia Food Industry SWOT
• Drink
• Malaysia Drink Industry SWOT
• Mass Grocery Retail
• Malaysia Mass Grocery Retail Industry SWOT
• Asia Pacific Food & Drink Business Environment Ratings
• Malaysia Food & Drink Business Environment Rating
• Macroeconomic Outlook
• Food
• Industry Forecast Scenario
• Food Consumption
• Confectionery
• Trade
• Industry Developments
• Market Overview
• Agriculture
• Food Production
• Halal
• Dairy
• Drink
• Industry Forecast Scenario
• Hot Drinks
• Alcoholic Drinks
• Soft Drinks
• Industry Developments
• Market Overview
• Soft Drinks
• Alcoholic Drinks
• Mass Grocery Retail
• Industry Forecast Scenario
• Industry Developments
• Market Overview
• Competitive Landscape
• Key Players
• Food and Drink
• Mass Grocery Retail
• Company Analysis
• Food
• Nestl Malaysia
• Yeo Hiap Seng (Malaysia) Berhad (YHS)
• Drink
• Guinness Anchor Berhad
• Carlsberg Malaysia
• Mass Grocery Retail
• Carrefour
• AEON (M) Bhd
  • Appendix
• Food & Drink Business Environment Ratings
• Ratings Methodology
• Ratings Overview
• Ratings System
• Indicators
• Limits Of Potential Returns
• Risks To Realisation Of Potential Returns
• Weighting
• Weighting
• Country Snapshot: Malaysia Demographic Data
• Section 1: Population
• Section 2: Education And Healthcare
• Section 3: Labour Market And Spending Power
• BMI Food & Drink Industry Glossary
• Food & Drink
• Mass Grocery Retail
• BMI Food & Drink Forecasting & Sourcing
• How We Generate Our Industry Forecasts
• Sourcing
• List of Tables
  • Table: Regional Food & Drink Business Environment Ratings
  • Table: Malaysia - Economic Activity
  • Table: Food Consumption Indicators - Historical Data & Forecasts
  • Table: Value/Volume Sales of Confectionery Subsector (US$mn, unless otherwise stated) - Historical Data & Forecasts
  • Table: Malaysia Food & Drink Trade Indicators (US$mn) - Historical Data & Forecasts
  • Table: Malaysia Beverage Subsector Value and Volume Sales - Historical Data & Forecasts
  • Table: Malaysia Mass Grocery Retail Sales Value (US$bn) by Format - Historical Data & Forecasts
  • Table: Grocery Retail Sales by Format (%) - Historical Data & Forecasts
  • Table: Structure of Malaysia's Mass Grocery Retail Market by Estimated Number of Outlets
  • Table: Structure of Malaysia's Mass Grocery Retail Market - Value Sales by Format (US$bn)
  • Table: Average Sales per Outlet by Format (US$mn)
  • Table: Key Players in Malaysian Food & Drink Sector - 2007
  • Table: Key Players in Malaysia's Mass Grocery Retail Sector - 2007
  • Table: Demographic Indicators, 2005-2030
  • Table: Rural/Urban Breakdown, 2005-2030
  • Table: Education, 2000-2003
  • Table: Vital Statistics, 2005-2030
  • Table: Employment Indicators, 2001-2006
  • Table: Consumer Expenditure, 2000-2012 (US$)
  • Table: Average Annual Manufacturing Wages, 2000-2012