OFI ... Oct10

A manufacturer and exporter of snack food and confectioneries, is looking at another year of record profit, driven by its higher value-added products and stable raw material prices.

In 2009 the Malacca-based company posted a record net profit of RM12.4 million on the back of RM125.7 million revenue, up nearly 16 per cent and 30 per cent from the previous year's net profit and sales respectively.

Jacker potato chips and Zess chocolate wafers are expected to contribute to the company's higher profit and revenue in the current financial year ending March 31 2011.

Oriental had in May 2010 announced a dividend policy of 35 per cent of its net profit. In the last financial year, the company came out with a record high dividend payout of RM5.7 million, or 9.5 sen per share. The company had given out dividends for the past nine years, even during the economic crisis.

Oriental had invested RM20 million in capital expenditure (capex), mostly on new machines to produce Zess chocolate wafer and potato-based products.

The company is targeting the markets of Thailand, Indonesia and Vietnam for Zess. In the current fiscal year, Oriental is spending between RM3 million and RM5 million of capex to buy small machinery.

For research and development, Oriental spends RM200,000 to RM300,000 a year. The budget can hit RM500,000 when the company rolls out a new product.

Bursa Malaysia-listed Oriental started its operations in 1978 from two shop lots in Malacca with snack production for the local market. It began exporting its snacks, potato chips, wafer and cakes in 1980s.