KLSE-listed Cocoaland Holdings Bhd, founded by the Liew brothers 40 years ago, has received a rather ‘sweet’ offer from Fraser & Neave Holdings Bhd (F&N) which could value the company at a whopping RM700 million (US$157.3 million).
In June, F&N, which currently owns 27.66% stake in Cocoaland, proposed to privatise the Rawang-based snack and candy maker, and acquire the remaining 72.34% stake in Cocoaland for RM488.15 million (US$110 million) cash.
The Liew family, the single largest shareholder of Cocoaland, with 40.65% stake, is supportive of the privatisation and committed to selling its lion’s share to F&N.
Prior to setting up Cocoaland, the Liew brothers were small-time vendors for Apollo Food Holdings Bhd, Oriental Food Industries Holdings Bhd and Mamee-Double Decker (M) Sdn Bhd. At one point, they sold deep-fried snacks and banana fritters by the roadside in the Klang Valley. Early success came in the mid-1980s when the Liew brothers identified a market opportunity for the manufacture of polytubed drinks, which enabled them to venture into the overseas market for the first time by exporting to the Middle East. But the real breakthrough came in the late 1980s, when the brothers purchased their own factory to produce ‘Koko Jelly’ a chocolate snack product that was so successful and profitable that it provided them with enough capital to expand.
Cocoland is now one of Malaysia’s largest manufacturers of sugar confectionery products such as fruit gummies, candies, chocolate, wafers and snacks. Its products are exported to Southeast Asia, the Middle East, East Asia, North America and Europe.
In recent years however, Cocoaland’s earnings have dwindled due to challenging business environment. Nevertheless, it has continued to expand and is still a market leader in the gummy and candy segment. Its winning product, LOT100 FruityGummy is the market leader in this space.
Cocoaland is also a contract manufacturer of health supplements for both local and foreign pharmaceutical companies. This business contributes 20% to its revenue and profit, and this could be one of the reasons F&N is keen on the takeover.
The Liew brothers are expecting the privatisation exercise to complete by the end of 2022.
