Year 11 | 21 November 2019 | firstname.lastname@example.org
The positive dynamics of rising tourist receipts, strong momentum in retail sales and healthy private consumption growth combine to provide reasonably strong growth opportunities for consumer-facing players. Beyond the near term, the importance of the Malaysian consumer to the economy will grow considerably, in line with rising wealth levels, implying greater optimism for consumer goods manufacturers and retailers. Indeed, US soft drinks giant The Coca-Cola Company (TCCC) has reiterated the company's proposed investment of US$300mn in Malaysia by 2015, while Malaysian supermarket Mydin announced plans to open seven new hypermarkets in 2011, providing testaments to the strong rewards on offer in Malaysia.
Headline Industry Data
- 2011 Per Capita Food Consumption = +1.4%; forecast to 2015 = +13.6%
- 2011 Soft Drinks Sales = +6.2%; forecast to 2015 = +33.1%
- 2011 Alcoholic Drinks Sales = +5.0%; forecast to 2015 = +30.5%
- 2011 Mass Grocery Retail Sales = +5.7%; forecast to 2015 = +34.5%
Key Industry Trends
Malaysians Guzzling Down More Beer - Malaysian brewer Guinness Anchor Berhad (GAB) has recorded a 47.5% and 11.4% year-on-year increase in net profit and revenue respectively in its second quarter ending in December 2010. While this strong growth can be attributed to the company's record spending on advertising and promotion, as well as brewing investments, it is also indicative of robust beer demand in the country. Similarly, trans-Asian brewer Asia Pacific Brewery also posted a 10% increase in volume sales from its Malaysian operations for the year ending December 2010, again highlighting the strong growth potential of the sector.
Carrefour's Malaysia and Singapore Sales Come to a Halt - French retailer Carrefour has withdrawn its 23 Malaysian stores and two Singaporean outlets from sale after a strategic review. Carrefour's failure to secure enticing bids in a second round of bidding for its Malaysian and Singaporean retail operations, which closed on November 5, could explain its decision to retain these operations. While Malaysia is undeniably an enticing retail prospect, the limited distribution opportunities in Singapore's MGR sector are likely to have quelled investors' acquisitional interest in Carrefour's combined network of Malaysian and Singaporean stores.
Key Risks To Outlook
Given the weaker-than-expected results in previous development plans, we caution that the final outcome of the Economic Transformation Programme (ETP) is likely to fall short of the target. To be sure, the five-year Eighth and Ninth Malaysia Plans both resulted in relatively lacklustre average real GDP growth of 4.8% and 4.3% (estimated) respectively, a far cry from their initial objectives of 7.5% and 6.0%. Our caution is also underpinned by the lack of skilled personnel in the country (caused by high levels of emigration), some unanswered questions over investment levels and political opposition to some of the proposals (such as the casino-building programme). Some of the projects announced in the ETP may still fail due to poor planning or a lack of funding, which would naturally place downward pressure on our economic and private consumption growth forecasts.
by S. C.
04 june 2011, World News > Asia