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Straits Times
04-05-2025
- Business
- Straits Times
With the future of food in flux, these Singapore-listed agribusinesses have room to expand
News analysis With the future of food in flux, these Singapore-listed agribusinesses have room to expand SINGAPORE – The world needs to ramp up food production to feed its growing population, with some estimates putting the amount needed at 70 per cent more by 2050. At the same time, food wastage is alarmingly high owing to inadequate infrastructure, a lack of standardised global market data, and unmet demand for food-trade finance that is affecting many small and medium-sized enterprises. Supply chain inefficiencies also contribute to about 14 per cent of global food loss. These concerns, relayed by Oceanus Group's Mr Peter Koh, have resulted in the integration of technology and sustainability fast becoming a core part of the agribusiness industry, in which Singapore-listed companies play a role. Some are even involved in the entire value chain, from production to retail. A prime example is Singapore-founded Wilmar International, which is Asia's leading agribusiness group. Its operations span from growing crops to processing, branding and distributing a wide range of food and industrial products internationally. Similarly, Golden Agri-Resources encompasses an efficient end-to-end supply chain, from responsible production to global delivery. Asia's pivotal role The global agribusiness market is expected to grow steadily over the next decade or so, according to the Organisation for Economic Cooperation and Development and the United Nations' Food and Agriculture Organisation. The organisations' outlook report for 2024-2033 further notes that emerging economies, particularly in Asia, are expected to play a pivotal role in shaping the global agricultural landscape. Singapore, for instance, has set a 30 by 30 goal, aiming to produce 30 per cent of its nutritional needs by 2030. The initiative was launched in 2019 by the Singapore Food Agency. Under its National Agrofood Policy 2021-2030, Malaysia is also implementing policies that focus on modernising its agriculture through smart practices, research and innovation, among other things. Efforts are being made along the entire value chain. Upstream agribusinesses, which refer to plantations, pastures and resources, are zooming in on enhancing productivity and building capacity. Agribusiness giant Olam International, which is majority-owned by Singapore's investment company Temasek, has recently been tapping technology to produce higher-yielding seeds for replanting. The Singapore-headquartered company, which operates in over 60 countries, said on April 14 that it will invest US$500 million ( S$650 million) in its food ingredients business and divest all remaining businesses and assets over time. It recently sold its stake in a port and logistics operator. Palm oil company Bumitama Agri, which is based in Indonesia and listed in Singapore, has also used water management systems effectively to retain water during droughts and drain excess water during heavy rainfall. In China, Zixin Group Holdings has used biotechnology to come up with different sweet potato varieties and cultivate seedlings. The Singapore Catalist-listed company has leased over 526ha of farmland to produce around 20,000 tonnes of fresh sweet potatoes annually, which are sold in China. Indofood Agri Resources (IndoAgri), on the other hand, is expanding its Tanjung Priok refinery capacity in Indonesia by 450,000 tonnes a year in the second half of 2025, thereby increasing total crude palm oil refining capacity from 1.7 million tonnes to 2.2 million tonnes annually. The Singapore-headquartered company's main business is in Indonesia, where it sells popular brands of cooking oil and margarine products, among other things. The mainboard-listed company's latest annual report out in April showed that its full-year net profit after tax in 2024 more than doubled compared with the year before. Going forward, IndoAgri will expand sales volumes through competitive pricing and enhanced distribution to meet Indonesia's growing population and incomes. Similarly, instant coffee giant Food Empire Holdings is building its first manufacturing facility in Kazakhstan. Situated on a 10ha plot, it is slated to be completed by end-2025 and will produce instant beverage products, with up to half of the products made at the facility to be exported to Central Asia and the Caucasus. Meanwhile, companies involved in downstream activities – such as marketing and distribution – are striving to increase market share through innovative technology and by driving demand for their products. Supermarket operator Sheng Siong Group has opened new outlets in Singapore and China while awaiting tender results for more stores. Duty Free International, which runs the largest duty-free retailer in Malaysia, has continued to implement rigorous cost-control measures and optimise resource allocation, such as by locating the Zon premium travel retail brand at all leading entry and exit points across Peninsular Malaysia. Confectioner Delfi, which is based and listed in Singapore, has developed initiatives to mitigate higher costs, such as of cocoa beans. It has also invested in capacity expansion projects to enhance production capabilities. To drive demand, many agribusiness companies have boosted promotional efforts to sustain or grow market share. Consumer goods specialist Hosen Group experienced a rise in selling and distribution expenses to $3.5 million in fiscal year (FY) 2024 from $3 million in FY2023. This increase was primarily driven by higher spending on promotion and logistics to support increased sales volumes. The home-grown company – which imports and distributes fast-moving consumer goods, as well as develops, processes, trades and distributes chocolate products – also reported an increase in external revenue from house brands by $6.3 million to $62.3 million over the same period, driven by higher sales demand and volume in overseas markets. Another company, Food Innovators Holdings, expanded from leasing restaurants to becoming a one-stop provider for traditional Japanese and Japanese-inspired European cuisine restaurants. Through new collaborations with Japanese restaurant operators, the company is also extending its food retail business reach, and introducing new Japanese cuisine in Malaysia and Singapore. Challenges ahead and the role of technology In addition to food security issues, the agribusiness industry is grappling with significant challenges such as slower economic growth, rising costs, currency fluctuations and geopolitical tensions. To mitigate these risks, businesses can adopt strategic initiatives – such as, for example, diversifying integrated business chains, taking equity stakes in joint ventures or enhancing their assets and processes. Wilmar, for instance, reported a 23.3 per cent drop in FY2024 earnings in March, attributing the decline to ongoing challenges faced by its sugar and palm-refining units in China, exacerbated by weak sugar prices that impacted its milling and merchandise activities. Despite these difficulties, the group has achieved improved results in the first quarter of FY2025, bolstered by strong contributions from its associates and joint ventures. Meanwhile, IndoAgri intends to continue to invest in its existing crude palm oil mills and in improving infrastructure for plantation management. These enhancements can also improve sustainability measures. In 2024 , Delfi demonstrated that sustainability and profitability can coexist to drive long-term value. The confectionery manufacturer installed solar panels at its Indonesian factory and introduced Rainforest Alliance-certified Van Houten chocolate products to support a sustainable cocoa industry and improve farmer livelihoods. It also implemented rainwater harvesting systems, advanced the use of renewable and recyclable materials and collaborated with suppliers on sustainable solutions. On the upstream side, Golden Agri-Resources now has integrated operations focused on technology-driven production and distribution. For example, its Smart Research Institute in Indonesia develops science-based solutions for agronomic practices. Similarly, Bumitama Agri has introduced technology such as drones and mobile apps into its operations to boost its efforts at maximising yield and extraction rates, while keeping operating costs in check. Another example is Oceanus, which has been developing a payment system, Oceanus Digital Network, which provides cross-border payments and trade-centric financial services. Singapore may not first come to mind when one thinks about agribusinesses, but it certainly has some significant players listed and operating here that contribute to the value chain of the industry. And while the business environment is changing, the steps taken by some of the companies may have put them on a strong footing to deal with the challenges ahead. The writer is the market strategist at the Singapore Exchange. Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Insider
30-04-2025
- Business
- Business Insider
Analysts Conflicted on These Consumer Goods Names: Wilmar International (OtherWLMIF) and Treasury Wine Estates Limited (OtherTSRYF)
Analysts have been eager to weigh in on the Consumer Goods sector with new ratings on Wilmar International (WLMIF – Research Report) and Treasury Wine Estates Limited (TSRYF – Research Report). Protect Your Portfolio Against Market Uncertainty Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter. Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox. Wilmar International (WLMIF) DBS analyst William Simadiputra maintained a Buy rating on Wilmar International today and set a price target of S$3.80. The company's shares closed last Monday at $2.30. According to Simadiputra is ranked #2799 out of 9437 analysts. Currently, the analyst consensus on Wilmar International is a Moderate Buy with an average price target of $2.67. Treasury Wine Estates Limited (TSRYF) Citi analyst Sam Teeger maintained a Hold rating on Treasury Wine Estates Limited today and set a price target of A$10.50. The company's shares closed last Monday at $4.90. According to Teeger is a 4-star analyst with an average return of 2.8% and a 43.2% success rate. Teeger covers the NA sector, focusing on stocks such as Domino's Pizza Enterprises Limited, G.U.D. Holdings, and ARB Corporation. Currently, the analyst consensus on Treasury Wine Estates Limited is a Strong Buy with an average price target of $8.39.
Business Times
30-04-2025
- Business
- Business Times
Stocks to watch: Wilmar, ST Engineering, Sheng Siong, Starhill Global Reit, FEHT, CDLHT, First Reit, IReit Global
[SINGAPORE] The following companies saw new developments that may affect trading of their securities on Wednesday (Apr 30). Wilmar International : The agribusiness group reported a 13.5 per cent increase in earnings for Q1 2025 to US$343.9 million from US$302.9 million in Q1 2024 on Tuesday. Revenue for Q1 2025 grew 3.3 per cent to US$16.2 billion from US$15.7 billion in the previous corresponding period. The growth in earnings was driven by better performance in the food products, plantation and sugar milling segments. Shares of Wilmar closed down 3.8 per cent or S$0.12 to S$3.02 on Tuesday, before the news. ST Engineering : A wholly owned subsidiary of ST Engineering priced US$750 million in five-year notes with a 4.25 per cent fixed-rate coupon. The notes are expected to be issued on May 8, and will mature on May 8, 2030, ST Engineering said on Tuesday. Net proceeds of the issue will be used by the subsidiary, ST Engineering RHQ, to refinance existing borrowings, said ST Engineering. Shares of the group fell 0.4 per cent or S$0.03 to close at S$7.32 on Tuesday, ahead of the announcement. Sheng Siong : The supermarket operator recorded a 6.1 per cent increase in net profit to S$38.5 million for the first quarter ended Mar 31, from S$36.3 million the year before. Revenue grew 7.1 per cent to S$403 million, from S$376.2 million in the previous corresponding period. This was due to contributions from eight new stores opening in the quarter and FY2024, as well as higher festive sales during Hari Raya in March, said the company on Tuesday. Gross profit consequently rose to S$122 million in Q1, a 10.2 per cent increase from the S$110.7 million posted the year prior. Shares of Sheng Siong closed at S$1.74 on Tuesday, down 0.6 per cent or S$0.01, before the news. Starhill Global Real Estate Investment Trust (Reit) : The manager of the trust posted net property income (NPI) of S$37.9 million for Q3 FY2025 ended Mar 31, up 0.5 per cent from S$37.7 million in the previous corresponding period. The slight increase was mainly driven by appreciation of the ringgit against the Singapore dollar and lower operating expenses, said the manager on Tuesday. This was largely offset by the higher rental provision for China property, loss of contribution from the divestment of some Wisma Atria office units and depreciation of the Australian dollar against the Singapore dollar. Revenue for Q3 FY2025 remained flat at S$47.6 million. Units of Starhill Global closed flat at S$0.495 on Tuesday. Far East Hospitality Trust (FEHT) : Managers of the trust said on Wednesday that its net property income fell 8.3 per cent year on year to S$23 million for the first quarter ended March, from S$25.1 million in Q1 FY2024. Revenue for Q1 FY2025 decreased 6.8 per cent to S$25.2 million from S$27.1 million in the same period a year before, mainly due to lower master lease revenue from hotels and serviced residences, arising from the absence of major events compared to the same period the prior year. Stapled securities of FEHT ended Tuesday up 0.9 per cent or S$0.005 at S$0.555. CDL Hospitality Trusts (CDLHT) : The stapled group's NPI fell 14.2 per cent to S$30 million for the first quarter of its fiscal year ended March, from S$34.9 million in the year-ago period. Revenue stood at S$63.4 million, down 2.8 per cent from S$65.3 million previously, based on a business update on Wednesday. Units of CDLHT closed Tuesday 1.3 per cent or S$0.01 higher at S$0.795. First Reit : The distribution per unit of the trust fell 3.3 per cent to S$0.0058 for the first quarter ended Mar 31, compared with S$0.006 in the corresponding year-ago period. Rental and other income fell 2.8 per cent to S$25.4 million, while net property and other income slipped 2.8 per cent to S$24.6 million. The manager attributed the Q1 decline to the depreciation of the rupiah and yen against the Singapore dollar, in an update on Tuesday. This was partially offset by higher rental income from properties in Indonesia and Singapore, it said. Units of First Reit closed flat at S$0.255 on Tuesday, before the announcement. IReit Global : The Europe-focused Reit reported 88.7 per cent occupancy rate at end-Q1 2025, up from 88.5 per cent at end-Q4 2024, in a business update on Tuesday. The committed occupancy was marginally higher due to new leases committed within the Spanish portfolio. The weighted average lease expiry stood at 5.7 years at end-Q1 2025, supported by new leases and no expiring leases during the quarter. Aggregate leverage held steady at 37.7 per cent as at Mar 31. This was due to the voluntary partial loan repayment of five million euros (S$7.5 million) in relation to the Spanish portfolio, offset by lower cash balance from the distribution payment and loan repayment. Units of IReit closed flat at S$0.23 on Tuesday.
Straits Times
30-04-2025
- Business
- Straits Times
Singapore's Wilmar posts higher first-quarter profit, flags tariff uncertainty
Wilmar's oleochemicals plant located in the Port of Rotterdam produces ingredients that are used in products such as shampoo. PHOTO: ST FILE Bengaluru - Singapore-listed agribusiness giant Wilmar International reported a 4 per cent rise in first-quarter profit on April 29, and flagged increased market volatility from US tariffs for the rest of 2025. Wilmar said its core net profit for the three months ended March 31 was US$343 million (S$449 million), up from US$328.4 million in the year-ago period. The company, one of the world's largest food producers, posted a higher core net profit on better performance from both its food products and plantation and sugar milling segments. 'The outlook for the rest of the year is expected to remain uncertain with increased volatility arising from the introduction of tariffs by the United States,' Wilmar said in a statement. Singapore faces a 10 per cent levy from the US despite a bilateral free trade agreement, compared to much steeper tariffs imposed on its neighbours, and has warned of uncertainty in its trade-reliant economy and the possibility of recession and job losses. Wilmar's first-quarter profit was also boosted by higher earnings from its investments in China, India and South-east Asia, it said. While operating conditions in the tropical oil business remained challenging, crushing margins improved during the quarter, Wilmar added. Weaker contributions from the feed and industrial products segment offset some of the higher profit, the company added. The company's shares fell 3.8 per cent to $3.02 on April 29, before its earnings announcement. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
29-04-2025
- Business
- Straits Times
Singapore stocks end lower amid mixed regional markets
The benchmark Straits Times Index ended 0.2 per cent or 6.6 points lower at 3,805.18. ST PHOTO: BRIAN TEO SINGAPORE - Stocks on the local bourse closed slightly lower on April 29 amid a mixed showing among regional markets. The benchmark Straits Times Index (STI) ended 0.2 per cent or 6.6 points lower at 3,805.18. Across the broader market, gainers outnumbered losers 259 to 214 after 968.57 million securities worth $1.33 billion changed hands. The top gainer on the STI was Sembcorp Industries . The counter rose 2.6 per cent or $0.17 to $6.62. The biggest decliner was Wilmar International, which slid 3.8 per cent or $0.12 to $3.02. The trio of local banks ended mixed. DBS Bank was down 0.5 per cent or $0.22 at $42.08 and UOB fell 0.2 per cent or $0.06 to finish at $34.36 while OCBC Bank rose 1 per cent or $0.15 to $15.98. Elsewhere in the region, key indexes ended mostly higher. Australia's S&P/ASX 200 index rose 0.9 per cent, the Kospi was up 0.7 per cent and Hong Kong's Hang Seng Index increased 0.2 per cent. However, the FTSE Bursa Malaysia KLCI lost 0.4 per cent. The mixed performance comes amid heightened market scrutiny of US-China tariff tensions. Blame and threats embedded in US Treasury Secretary Scott Bessent's recent remarks stymie a path to conciliatory US-China tariff talks, said Mr Vishnu Varathan, head of macro research at Mizuho Securities. He called Bessent's proposition that it is 'up to China to de-escalate because they sell five times more to us than we sell to them' as 'glaringly counter-productive, ascribing blame on Beijing'. 'Whereas Beijing may quite rightly assess that rushing to acquiesce the aggressor (on tariffs) inadvertently, but damningly, concedes the upper hand to Washington – a strategic error that Beijing will avoid,' added Mr Varathan. He also said that the European Central Bank (ECB) may be quicker than the Federal Reserve to acknowledge the income shocks arising from tariffs. As a result, the ECB could adopt a more dovish stance sooner – potentially between mid-2025 and Q3 2025 – thereby 'creating a temporary window of Fed-ECB divergence'. THE BUSINESS TIMES Join ST's Telegram channel and get the latest breaking news delivered to you.
