I attended company F’s AGM to gain insights into its business model and competitive strength. F is in the fast moving consumer goods sector with vertically integrated operational capabilities to manufacture its own food ingredients. This allows F to customize its products to suit the taste preferences of customers in different countries. In addition, F has better control over the quality of its end products through sourcing for premium raw materials and mastering the processing techniques for food ingredients. In fact, F did so well that its two plants for its main product are now fully utilized; 30% for its own use and 70% to sell customized food ingredients to third party brands.

The Chairman and CEO were able to clearly articulate F’s business strategies in the AGM. F is able to identify the ideal place to set up plants taking into account the key considerations such as the availability of highly skilled engineers and tax incentives. F also practices product diversification that allows it to cross-sell related products. I am heartened to know that a new plant will be ready by the end of this year for its second largest product in terms of revenue and there are plans to expand the production line for its third product.

Management took great efforts to explain its market positioning to the delight of shareholders. It sells its main product at the medium price level with premium quality. This enables F to maintain or increase its market share as more customers focus on value for money products in time of high inflation. F is still a small player in the food

ingredients market for its main product and there is ample opportunities for expansion. Third party brands who purchase F’s food ingredients are unlikely to switch to other suppliers as there are limited players that can produce

consistently high quality ingredients.

I was delighted that management stayed behind to interact with shareholders after the AGM. It is a clear demonstration that they value shareholder’s inputs and suggestions. A video showing F’s creative marketing strategies to diverse customer groups in various countries was also shown on screen which offer further insights on F’s branding capabilities. It is indeed a fruitful AGM experience for shareholders.