Press Release 2014

PRESS RELEASES

 
 
 
Red Eagle Cooking Oils Voted Recipient Of Readers Digest Trusted Brand Gold Award 2014

Red Eagle Cooking Oils Voted Recipient Of Readers Digest Trusted Brand Gold Award 2014

Red Eagle cooking oil is a leading cooking oil brand in Malaysia. Introduced into the market back in 1976, it is one of the core product lines of Yee Lee Corporation Bhd., a major manufacturing and marketing group in the country.

Red Eagle is a special blend of refined palm olein, groundnut oil and sesame oil formulated for better flavour and aroma. It is cholesterol-free and rich in Vitamin E. Every kilogram of Red Eagle cooking oil contains at least 750mg of natural Vitamin E and this has been certified by the Swiss Vitamin Institute, a foremost authority on vitamin testing.

Besides being naturally healthy, Red Eagle is also a heat-stable oil, thus making it the ideal choice for Asian-style cooking which involves a lot of stir-frying, frying and deep frying. Because of this, Red Eagle has become the preferred brand for high-heat cooking and a favourite among Chinese households.

As a leading brand, Red Eagle is also an innovator and was the first to introduce cooking oil in PET bottles back in 1994. The brand won the Product Innovation Excellence Award from the Ministry of Trade and Industry in 1995. Red Eagle has also won the Readers Digest Trusted Brand Award (Gold) numerous times since 2006.

Having established itself as one of the household names in Malaysia, Red Eagle has now gone on to introduce other product lines which carry the same natural and wholesome value. This includes bihun (rice noodles made from premium grade Thai rice) and sesame oil. Other sauces and condiments are also in different stages of development.

Yee Lee sows seeds for growth

Yee Lee sows seeds for growth

Move includes relocating aerosol can manufacturing to Vietnam by mid-2015

Kuala Lumpur: Ipoh-based Yee Lee Corp Bhd is sowing seeds in its business, from expanding its aerosol can business to increasing its acreage in palm oil plantations.

Yee Lee executive director Francis Chok Yin Fatt said the company is building a factory in the Vietnam Singapore Industry Park (VSIP) in Vietnam so that it can move its aerosol can operation there by the middle of next year from its current rented premises.

Chok said the new plant would have the same capacity as the current operation, but it will be equipped with more advanced machinery to improve its efficiency.

"We have room for additional capacity there. The land [on which the factory sits] is seven acres (2.8ha) and we are only using about three acres now,” he said.

"It’s a very big market [for aerosol cans in Vietnam], but [competition is stiff as well],” he said, adding that Yee Lee has been manufacturing and selling aerosol cans in Vietnam for more than eight years.

He said the company is also selling its aerosol cans to Australia and Bangladesh.

"We are trying to expand in Vietnam,” he said, adding that there is significant potential in Vietnam due to its large population.

Yee Lee manufactures and distributes a diverse range of consumer and industrial products, from cooking oil, margarine and instant noodles to PET bottles and corrugated paper cartons, besides aerosol cans. It is also in the palm oil business, and controls 32.9% of Spritzer Bhd, which produces bottled mineral water.

Chok said Yee Lee’s main strength lies in its strong distribution network that has been cultivated over decades.

"Our trading division has 15 branches in Malaysia servicing more than 20,000 customers,” he said, adding that because of this, foreign companies want to partner with Yee Lee.

Yee Lee’s customers in its distribution network include retailers such as sundry shops, supermarket and petrol kiosks. It also sells to hypermarkets such as Aeon, Jusco and Mydin.

The company was described as an "unheralded gem among consumer stocks” by Kenanga Research, due to its excellent 21-year track record of profitability.

"In addition, net profit has grown at five-year compound annual growth rate of 13% historically to RM31.6 million in financial year 2013 ended Dec 31 (FY13).

"Given its strong profitability track record, we believe that the market has severely undervalued Yee Lee,” said Kenanga Research analyst Alan Lim Seong Chun in a March 18 report that pinned a fair value of RM2.06 to Yee Lee.

The stock has since risen by almost 30% to RM1.90 on April 17 from RM1.35 on March 4. This gives it a market capitalisation of RM336.15 million.

"Barring any unforeseen circumstances, we expect results to be sustainable in FY14, as we have higher capacity and new warehouse, which will provide better service due to its [closer] proximity [to] our customers,” said Chok.

He said that Yee Lee’s results in FY13 were the result of balanced growth across all its divisions.

Yee Lee has allocated RM57 million for capital expenditure (capex) in FY14, with RM33 million budgeted for its manufacturing division, RM8 million for its trading division and RM16 million for its plantation division.

"We also want to expand our trading division. We see Johor as a growing market. With this in mind, we built a bigger warehouse with better facilities at the cost of RM8 million to provide better service to our customers and capture more market share,” he said.

Chok said besides selling its products, Yee Lee also acts as a distributor for a number of products by agency brands such as Campbell, Old Town White Coffee, Red Bull, Pagoda and Kimberly Clark.

He said Yee Lee, which has been in the plantation business for the past 30 years, has applied for a permit from the authorities to develop its remaining 4,000 acres of vacant land in Kota Kinabalu for oil palm plantation. The total land size for its plantations spans some 6,000 acres.

"We’re still waiting for government approval. Once we get it, we need at least one year to plant and another three to four years for [harvesting the crops]. Hence, returns will not come so soon,” he said, adding that over the longer term, Yee Lee will seek to expand its plantation further.

"Our palm oil mill in Bidor has budgeted RM5 million capex this year to acquire a new boiler and other supporting equipment. This will cater for at least another 10% of our fresh fruit bunches throughput production, which will translate into more crude palm oil for sale,” he said.

Chok said Yee Lee is also interested in exploring a new strategy of acquiring popular consumer brands going forward, although the returns will not be immediate.

"It will take time for us to build it up,” he said, adding that the company is confident of banking on its strong distribution channels to drive future growth.

Chok, who is the vice-chairman of the Federation of Malaysian Manufacturers, said the industry is affected by the electricity tariff hike and the imposition of the minimum wage.

"Despite the challenges, we expect to increase our revenue by 5% to 6% this year (FY13 revenue came in at RM658.3 million) barring unforeseen circumstances,” he said, adding that the company will continue to strive for greater cost savings and increase its palm oil extraction rates for increased productivity.

He said that Yee Lee currently does not have a dividend policy. However, dividends have been paid continually since its listing in 1993.

"Going forward, we expect to continue paying dividends in the current financial year,” said Chok.