'We will also be mindful of the cost of living, especially when it comes to staple food like bread. It is important that they are as affordable as possible,' says FFM Bhd chief executive officer Jeremy Goon. (Photo by Shahrill Basri/The Edge)

KUALA LUMPUR (March 5): PPB Group Bhd, which owns flour miller FFM Bhd, said there was an increase in local flour consumption following the boycott of Western consumer brands amid the war in Gaza, as more people visited local eateries.

“The boycott has affected many Western brands, such as McDonald's, Starbucks and KFC, even though many franchise holders are locals. However, many local eateries have become beneficiaries of the boycott, because people are going to local eateries to eat more roti canai, [resulting in] local coffee shops experiencing more businesses,” said FFM chief executive officer Jeremy Goon.

“We have certainly seen an increase in flour consumption because of that,” Goon told the media and analysts at the group's earnings briefing on Tuesday.

Meanwhile, Goon said PPB had no plans to increase the prices of its consumer products, despite higher operating cost, in order to remain competitive in the market.

For the financial year ended Dec 31, 2023 (FY2023), PPB’s consumer product segment saw its profit fall by 23.5% to RM26 million from RM34 million for the previous year, due to higher trade promotion and operating costs.

“There will be no price adjustments. Over the last couple of years, there were very minimal price adjustments even when the price of wheat went much higher. We are going to make sure that if there are any price increases, it will also be minimal, because the competition is going to be intense,” he said.

“We will also be mindful of the cost of living, especially when it comes to staple food like bread. It is important that they are as affordable as possible,” he added.

Looking ahead, Goon said the group will focus on cost efficiency, as well as new consumer product launches, as it anticipates the consumer market to be challenging with consumers becoming more cautious about their spending.

On the grains and agribusiness segment, Goon noted that the group had divested its flour mill in Indonesia to allow better allocation of resources, as the Indonesian market had become increasingly competitive over the years.

PPB's grains and agribusiness segment saw its profit more than double to RM230 million from RM74 million a year ago, due to an improved performance of the flour, feed and livestock divisions.

Overall, the group's full-year net profit stood at RM1.39 billion, falling by 36.5% year-on-year from RM2.2 billion, while revenue dropped 7% to RM5.72 billion from RM6.15 billion, attributable to lower contributions from the divested Indonesian flour operations.

At Tuesday’s market close, PPB shares went up two sen or 0.13% to RM15.30, valuing the group at RM21.77 billion.