KAWAN FOOD SHOULD RIDE OUT COVID-INDUCED CLOSURE

Demand for frozen food is likely to remain strong in Malaysia, with coronavirus restrictions leading consumers to fill their freezers, according to analysts.

The comments were made in response to concerns over the effects of a recent one-week closure of the one of the country’s leading frozen food manufacturers, Kawan Food, ordered by Malaysia’s Ministry of Health after staff tested positive for Covid-19.

Comments from Public Investment Bank Research indicated that the temporary shutdown “was unlikely to have a material impact” on the earnings of the group, which describes itself as Malaysia’s leading frozen food manufacturer.

“We gather that demand for frozen food is still robust, especially in Malaysia, thanks to tightening of the movement control order restrictions, which encourages consumers to stock up on frozen food,” the bank said in a statement released to media.

“In addition, we expect exports to rise in tandem with Kawan Food’s strategy in penetrating new export markets. We understand that the group is seeking to grow its presence in North America, South America and Europe.”

The group’s large inventory, its ability to transfer production to a base in China and the likelihood of increasing production after the shutdown would help it to ride out the closure, which was ordered to run from June 14 to 21.

Kawan Food can trace its history back to the 1960s, when, as a family-run firm, it began making traditional Asian food products before going on to introduce freezing to extend its range of potential markets. The first export market was Australia and Kawan Food now sells in 38 countries, has 660 staff and two factories.

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