It is back on the acquisition trail this time, it is aiming for businesses in the region. It is eyeing poultry farms in Indonesia and Vietnam, and plantation land and palm oil mills in Indonesia, among others.
It has seen its poultry and livestock division grow by more than 100% in the past four years. Between 2003 and 2007, it purchased a 75% stake in a plantation project with its Indonesian partners which enabled the company to diversify into oil palm.
QL typically allocates around RM150 million annually for capital expenditure.
While the livestock and marine divisions are expected to remain the main earnings drivers for the group, its aggressive expansion into the plantation sector could be by a decline in palm oil prices.
It also operates a fleet of more than 17 trawlers. It is Malaysia’s largest producer of surmi. It also produces fish meal mixture for livestock feed and fish feed, and distributes frozen fish.
Its revenue and profits are generated from two major segments. Its integrated livestock farming and marine products manufacturing division.
Some of the risks in QL’s growth strategy include increases in raw material prices, significant changes in the CPO prices trend, foreign exchange volatility risks due to its increasing overseas contribution and aggressive growth that may strain its balance sheet.
Its net gearing stands at 0.2 times. Its net interest cover stands at 7.0 times The bulk of its borrowings are short term of about 57% of its total borrowings.
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