BILLION DOLLAR CLUB: FOOD AND BEVERAGES + FOOD AND DRUG RETAILING

Leading supermarket operator Sheng Siong Group is a regular winner at the Billion Dollar Club. This year, Sheng Siong took home the overall sector award for this industry category as well as two other wins with 34.06% and 13.5% CAGR for weighted ROE and returns to shareholders respectively. Wilmar International, by virtue of its win in PAT growth of 18.9% CAGR, helped prevent a clean sweep by Sheng Siong.

Sheng Siong was established in 1985 and listed in 2011. As of 2022, the company operates in more than 60 locations across Singapore. It carries a wide assortment of live, fresh and chilled produce, such as seafood, meat, fruits and vegetables. It also carries the whole gamut of general merchandise, including toiletries and essential household products. In line with market trends, Sheng Siong has also steadily expanded its range of house brand products. In the decade since the company embarked on this direction, Sheng Siong now carries over 1,500 products under 23 house brands.

While the company predominantly has a presence in Singapore, it has been steadily expanding overseas too. From its first outlet in Kunming in China back in 2017, and the second in 2019, Sheng Siong last year opened another two more outlets, also in Kunming.

Ever since the pandemic, Sheng Siong had enjoyed strong sales as consumers stock up on household staples, in case of supply disruption. FY2021 ended December 2021 was the second straight year the company’s revenue crossed the $1 billion mark.

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In the company’s FY2021 annual report, Sheng Siong executive chairman Lim Hock Eng observes that Singapore has gradually lifted its border restrictions, amid occasional temporary disruptions such as the closure of the Jurong Fishery Port, a key distribution centre for fresh fish. Sheng Siong says incidents like this have underscored the need to ensure a diversified source of supply to ensure a stable supply of goods.

“Over the years, Sheng Siong has placed great focus on diversifying our food supplies and saw minimal disruptions to our supplies. These efforts have also gone hand in hand in managing our input costs and ensuring that we continue to provide value to our customers,” says Lim.

Looking ahead, the company says its key strategy remains in growing its retail network in Singapore by opening new stores — especially in areas where it does not have a presence.

In 2021, Sheng Siong secured the leases of three stores. It is on the lookout for retail spaces in new and existing HDB housing estates to strengthen its presence in the local market for the current year. In line with the growing popularity of e-commerce, Sheng Siong has also updated its website to facilitate more sales via this channel, although it notes that “the majority” of its customers prefer to shop for fresh produce at its physical outlets.

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Lim, in his annual report, notes that higher inflationary pressures is a key worry for all. The company will try to ensure stability in the supply of essential products and also improve operating efficiency to improve margins.

Wilmar International, which won for growth in PAT, was a beneficiary of higher commodity prices. The company is known for its palm oil plantations but it also has an extensive consumer-facing business selling edible oil in China and India. In FY2021 ended December 2021, Wilmar reported record earnings of US$1.89 billion ($2.7 billion), up 23.2% over FY2020. Revenue in the same period came in at US$65.8 billion, up 30.2%. Wilmar notes that while raw materials have gone up, it was able to report the strong numbers because of good refining margins and sustained sales volumes.

CENTURION CLUB: FOOD & BEVERAGES 

Mewah International tops sector and earnings growth; JB Foods wins for ROE, Oceanus for best returns

Mewah has a long history as a family business now led by deputy chairperson and CEO Michelle Cheo / Photo: The Edge Singapore

Similar to Wilmar International, Mewah International is also an established player in the edible oil business. Controlled by the Cheo family, Mewah was named overall sector winner and lauded for its best growth in PAT in the Centurion Club category with a CAGR of 75.7% over three years. Mewah can trace its business back to the 1950s and was listed in 2010.

The company, now led by deputy chairperson and CEO Michelle Cheo, has built up a total refining capacity of more than 3.5 million tonnes a year. Besides refining facilities, Mewah runs various food manufacturing plants for bakery and confectionery, biodiesel and dairy products, spread out between Malaysia, Singapore and Indonesia.

In FY2021, Mewah reported a 7.4% drop in its earnings to US$80.2 million ($114.4 million) because of lower sales volume and margin. Nonetheless, revenue hit a high in more than a decade at US$4.35 billion. With a stronger base, Mewah believes it is now in a more favourable position to explore arising opportunities in greater value chain participation and further diversification of refining and manufacturing facilities geographically, says chairman and executive director Cheo Tong Choon.

Oceanus Group, under group CEO Peter Koh, has transformed drastically from a beleaguered abalone farmer, into a company with the bulk of its business from an extensive distribution business in fast-moving consumer goods. Oceanus, which won for return to shareholders with its 76.5% CAGR showing, has also made investments in food-producing ventures that can help improve food security. It has also built a multimedia production arm that has delivered projects for clients such as the National Day Parade.

JB Foods is another regular winner at the Billion Dollar Club. This year, it topped the industry with a weighted ROE of 12.17%. JB Foods is a leading cocoa ingredient company, with a total bean processing capacity of 180,000 metric tonnes a year from its facilities in Malaysia and Indonesia.