KUALA LUMPUR (March 3): PPB Group Bhd said the government’s plan for prices of chicken and eggs to be floated after June is a better policy to encourage the supply of chicken and eggs on the market.
Jeremy Goon, who is chief executive officer of FFM Bhd, an 80%-owned subsidiary of PPB, said the price ceiling policy that Malaysia practised has distorted the market.
“If you are a farmer today, you look at the price ceiling, you are not motivated or incentivised to produce more because the production cost is higher than the price ceiling, you will be waiting for subsidies.
“Putting a price float would encourage supply, it would encourage farmers to produce more,” Goon said at an analyst and media briefing on PPB’s 2022 financial results on Friday (March 3) at Shangri-La Hotel Kuala Lumpur.
Livestock farming and animal feed milling are parts of FFM’s businesses.
Earlier on Aug 5, 2022, the Malaysia Competition Commission (MyCC) said it provisionally found FFM and four other millers to have infringed the Competition Act 2010.
The proposed decision is premised on the allegation that they had entered into anti-competitive agreements or concerted practices in increasing the price quantum of poultry feed that contained soybean and maize as its main ingredient, between early 2020 and mid-2022.
Last December, MyCC said it gave FFM the fourth and final extension to submit its representation in response to the alleged price-fixing of poultry feed case by Jan 31.
Goon on Friday confirmed with the media that FFM had submitted the representation and there were no updates from the authorities as of yet.
In terms of labour, Goon said the company is getting another 88 migrant workers to push the number of its foreign labour to about 630.
During the briefing, PPB’s managing director Lim Soon Huat said the group hopes the supply of labourers continues to improve going into 2023 as it is still a challenge, particularly in the group’s food production facility.
Despite a slight concern about grain commodity prices remaining volatile given the uncertain weather conditions in major grain-growing countries and the ongoing Russian-Ukraine war, Goon said FFM has no plans to increase prices for its bakery products in 2023.
To add to that, Lim said he does not foresee a recession happening in Malaysia, and FFM’s delivery of necessities would not be affected while the group saw improvement in consumer spending and sentiment.
At the time of writing, PPB's share price was trading lower by 10 sen to RM17.5, bringing it a market capitalisation of RM24.92 billion.