Farm Price’s ACE Market debut soars, doubling share value to fund expansion

FARM Price Holdings Bhd’s shares surged twofold on its ACE Market debut on Bursa Malaysia, following an IPO that generated RM24.5 million for the company’s expansion. 

Upon the commencement of trading on May 14, shares of the fresh vegetable, food and beverage wholesaler soared to 48 sen per share, marking a 100% increase from the IPO price of 24 sen per share. 

Its MD Dr Tiong Lee Chian said armed with fresh capital, the company stands poised for further expansion. 

The group plans to expand its Senai Centralised Distribution Centre with an additional built-up area of approximately 84,790 sq ft, notably increasing cold room capacity from 29,669 pallets to around 40,000 pallets annually upon completion. 

It is also expanding its value-added processing areas to capitalise on the growing demand for its pre-packaged and fresh-cut vegetables, which boast higher margins. 

With the additional space, Farm Price will be investing in new machinery and equipment to cater for the anticipated increase in customers’ orders, reduce the use of labour and expand its transportation fleet to cater for business expansion and growth. 

“To expand our footprint into the central region of Peninsular Malaysia, we are setting up additional regional distribution centres in Nilai, Negri Sembilan, and Cameron Highlands, Pahang. Furthermore, we are establishing a sales and marketing office in Singapore to tap into the rising demand for our fresh produce in the region. Notably, Singapore’s market contribution, already accounting for a quarter of our group’s total revenue in FYE23 and boasting higher profit margins, positions it as a strategic focus for future expansion. 

“Farm Price recognises the significant growth potential within the fresh vegetable industry, where our market share remains under 1% in both Malaysia and Singapore. 

To capitalise on the rising demand for fresh produce, we are committed to ensuring seamless service throughout our Senai Centralised Distribution Centre’s expansion,” Tiong concluded. 

To recap, Farm Price has raised a total of RM24.5 million from the IPO. Of this sum, RM6.4 million (26.14%) is directed towards the construction of additional operational and related facilities at the Senai Centralised Distribution Centre, while RM2 million (8.17%) is earmarked for the purchase of machinery, equipment and logistics fleet.

Additionally, RM1.6 million (6.54%) has been allocated for planned regional distribution and procurement centres. 

Meanwhile, RM10.58 million (43.22%) is dedicated to working capital, with the remaining RM3.9 million (15.93%) to cover listing expenses. 

Alliance Islamic Bank Bhd is the principal advisor, sponsor, sole underwriter and placement agent for the IPO exercise. — TMR 

This article first appeared in The Malaysian Reserve weekly print edition