KUALA LUMPUR (March 22): Dairy producer Farm Fresh Bhd made a strong debut on the main market on Tuesday (March 22) amid active trade, soaring as much as 51 sen or 37.78% to RM1.86 as compared to its initial public offering (IPO) price of RM1.35.

At the opening bell, the counter opened 35 sen or 25.93% to RM1.70. It continued to rise and settled at RM1.82 at 10.55am, up 47 sen or 34.81%.

Farm Fresh ended its maiden trading day at RM1.72, still 27.4% higher than its IPO price.

At RM1.72, the counter was valued at RM3.2 billion.

The counter, which was the most actively traded stock on Tuesday, saw 330.41 million shares traded.

Farm Fresh, which is raising approximately RM1 billion from the IPO, is Malaysia’s largest IPO since June 2021.

At a virtual press briefing after the listing ceremony, the group’s managing director and chief executive officer Loi Tuan Ee said the company may look into price adjustment if the supply chain disruption caused by the Russia-Ukraine war, which has led to higher commodity prices, continues.

“The supply chain disruption has caused a strong headwind to us… If it is temporary and we think that we can take that, we will probably continue to maintain the price, but if it's not, then we will look at the opportunities to increase prices,” he said.

According to Loi, the company adjusted its milk price last September as the increase in commodity prices have been a huge burden to the company.

On the new minimum wage of RM1,500, he said that it will also have a cost impact on the company as it will increase its labour cost of about RM1 million per annum.

However, he opined that the increase is still manageable.

Meanwhile, Loi said Farm Fresh’s performance for the financial year ended March 31, 2023 (FY23) will be underpinned by new product launches and regional expansion.

According to him, the group plans to expand to Singapore, Hong Kong, Indonesia, and the Philippines in FY23.

“Once we have our Taiping plant up and running, we will be able to free up capacity at our Singapore and Larkin processing plants to cater further to the Singapore market,” he said.

He also added that the group plans to enter Hong Kong by the end of this year by setting up a company there.

“With all the regulatory requirements, we believe we can get within the next seven to eight months. By the end of the year, we hope to be able to export to Hong Kong,” he said.

He said Indonesia is another significant market to Farm Fresh, and it has started work to obtain halal certification about a year and a half ago.

On its expansion to the Philippines, Loi said the group will obtain approval soon to enter the market.

Farm Fresh, through the public issue portion of its IPO, raised a total of RM301 million of which RM140 million is intended for establishing a new manufacturing hub, a new dairy farm and an integrated facility in Malaysia, RM60 million has been earmarked for the expansion of its production facility in Australia, RM40 million for regional expansion outside Malaysia, RM40.8 million for working capital whilst RM20.2 million has been allocated for listing related expenses.