KUALA LUMPUR: After being the subject of two failed takeover bids last year, snacks and candy maker Cocoaland Holdings Bhd said it will not consider anymore takeover offers — at least for now — and will concentrate instead on expanding its business.

“We are not considering anymore offers now as we don’t think we can get a good price under the current prevailing market condition,” said its executive director (ED) Lau Kee Von in a recent interview with The Edge Financial Daily.

“It would be a waste of time for us to spend our time discussing another takeover offer, which may turn out to be nothing eventually,” Lau said.

Hence, he said it would be better for him and his eight siblings to focus on their business and expand the company’s market share. He also gave assurance that there is no need to worry about the company’s succession plan.

“My youngest brother is only 40 years old and each of us has several children that we can groom to take over the business,” Lau said, although he admitted that none of the second generation had expressed their interest in taking over the business so far.

Cocoaland is controlled by Leverage Success Sdn Bhd, which has a 38% stake. The shareholders of Leverage Success are Lau and his brothers Liew Fook Meng, Liew Yoon Kee, Lau Pak Lam, Lew Foo Chay @ Lau Foo Chay and Lau Kwai Choon.

The second-largest shareholder of Cocoaland is Fraser & Neave Holdings Bhd, with a 27.19% stake.

Since 2014, Cocoaland’s management has been on the lookout for buyers to take over the company, citing the lack of successors to take over the business.

News reports in April 2015 said it was in talks with Swedish private equity group EQT Partners to dispose of a controlling stake in the company, though no firm offers were disclosed.

On the heels of that, the company received a takeover offer amounting to RM377.52 million or RM2.20 per share from Navis Asia Fund VII, LP. But the board decided to reject the offer in May that year.

A month later, it got a takeover offer from Hong Kong-listed First Pacific Co Ltd to acquire its entire business for RM2.70 per share or RM463.32 million, cash. But First Pacific, which is controlled by Indonesian tycoon Anthony Salim, withdrew its offer a month later, saying Cocoaland’s product range did not meet its overall regional food expansion plans.

Meanwhile, Lau shared Cocoaland will introduce a new series of “healthy” gummy candies — including collagen gummy, vitamic C gummy, multivitamin gummy and a calcium gummy — in the domestic market by the first quarter of 2017.

This, he said, is to tap the middle to higher-end market segments, where the company has no presence currently, and to capture more market share as consumers become more health-conscious.

More interestingly, Lau said the company plans to sell the new gummy candies solely on a new e-commerce platform to be established, eschewing the usual supermarket channel.

“The costs of production for the new products are relatively higher compared with normal gummy products. To keep the price affordable, we think it would be good to sell them via the online platform,” he explained.

The platform is in the making, he said, and should be ready early next year. However, he declined to share the capital outlay required for the new product range and e-commerce platform, or any expected sales figure.

For the first half ended June 30, 2016 (1HFY16), its net profit gained 20% year-on-year to RM18.67 million from RM15.56 million due to lower freight and forwarding charges and foreign exchange gain, while revenue stayed largely flat at RM129.89 million compared with RM129.41 million previously.

Aside from expanding its local market, Lau said the company will intensify its advertising and promotion campaign in China to capture more market share.

“We have now established our presence in almost every province in China,” he said. The company hopes to see between 10% and 20% sales growth in the country each year.

Besides China, which is its biggest overseas market, Cocoaland is also exporting its products to the Middle East, Indonesia, the US and Europe.

In a report dated Aug 29, 2016, Wilson & York Global Advisers Sdn Bhd maintained its “buy” call on Cocoaland, with a higher target price of RM2.78 from RM2.60 previously, after projecting that the company’s sales growth and capacity utilisation may accelerate faster than expected.

The research outfit also noted that the gummy and jelly maker is shifting to its own brand products, which have been beneficial for margins, citing the 12.7% jump in local sales value in 1HFY16.

Though it expects annual sales growth to be muted (0% to 3%) for the next few quarters as growth outlook in Asia and elsewhere softens, it said any short-term weakness in Cocoaland’s share price may be a good chance to buy.

Cocoaland shares closed down one sen or 0.51% at RM1.95 last Friday, valuing it at RM446.16 million.