PETALING JAYA: Guan Chong Bhd will invest RM50mil to expand the capacity of its German plant Schokinag Holding GmbH over the next two years.
In a statement yesterday, the group said the expansion will help it ride the recovery in Europe as borders reopen. The growing revenue contribution from Schokinag also necessitates the expansion.
Schokinag recorded a revenue surge of 21% to RM689.2mil in the nine months ended Sept 30, 2021, from RM570.0mil in the previous corresponding period.
Guan Chong noted that the growth experienced by Schokinag outpaced that of the entire group for the period under review.
“The better performance in Schokinag, even without new capacity put in, is not only a good indication of economic recovery in the European region but also a reflection of our German team in growing market share in industrial chocolate in Europe.
“Hence, we believe the decision to expand Schokinag’s capacity is necessary to support the team in their growth ambition, and we will continue to evaluate other expansion options where needed to capture the ongoing opportunities,” said managing director and chief executive officer Brandon Tay.
For the third quarter ended Sept 30, 2021, Guan Chong’s net profit declined 26.35% to RM34.46mil from RM46.78mil previously.
Nonetheless, revenue rose to RM998.10mil from RM841.59mil, backed by Schokinag’s contributions and an increase in sales volume of cocoa products.
Earnings per share was 3.32 sen compared with 4.61 sen in the third quarter of 2020. The group has declared a dividend of one sen per share, bringing year-to-date payout to two sen per share.
For the nine months ended Sept 30, 2021, Guan Chong posted lower net profit of RM104.74mil compared with RM175.92mil in the corresponding period last year. Revenue, meanwhile, rose to RM2.83bil from RM2.66bil.
“We are seeing signs of demand for cocoa products and ingredients recovering in tandem with economies reopening and higher vaccination rates worldwide.
“The commencement of our Ivory Coast factory in mid-2022 will also be timely to capture the growing demand trend,” said Tay.