Boston, MA -- (SBWIRE) -- 05/28/2014 -- We hold an optimistic view on the Malaysian consumer through to 2018, with current conditions particularly buoyant. Our country risk team believes that real private consumption growth will come in at 7.0% in 2014 on the back of 4.4% real GDP growth. BMI holds the view that such strong consumer expenditure growth will be fuelled by cash handouts and increased welfare spending by the government. Despite mounting concerns about fuel price hikes, we believe declining global grain prices, subdued money supply growth and benign wage price pressure will keep Malaysia's consumer price inflation in check as we head further into 2014.
Headline Industry Data (local currency)
- 2014 total food consumption sales growth (local currency): +3.0%; compound annual growth rate (CAGR) 2013-2018: +3.1%.
- 2014 per capita food consumption sales growth (local currency): +1.4%; CAGR 2013-2018: +1.6%.
- 2014 total soft drinks value sales growth (local currency): +4.1%; CAGR 2013-2018: +3.8%.
- 2014 total MGR value sales growth (local currency): +10.6%; CAGR 2013-2018: +8.4%.
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Key Industry Trends
Hershey To Invest In Malaysian Production Facility: In a development indicative of Malaysia's potential as a manufacturing base for the region, US-based chocolate company The Hershey Company plans to open its first confectionery manufacturing plant in Johor, Malaysia. The MYR816mn (USD250mn) facility will incorporate innovations in automated confectionery manufacturing technology and high-speed wrapping equipment featuring proprietary, as well as specially engineered, wrapping technologies. The new plant is expected to address rising consumer demand for the company's products in Asia.
Mitsubishi Partners With Colcafe: In February 2014, Japan-based Mitsubishi entered into a partnership with South Africa-based Colcafe, a subsidary of Grupo Nutresa, to form a new coffee joint venture in Malaysia named Oriental Coffee Alliance. Both companies will own a 50% stake each in Oriental Coffee Alliance. The new joint venture is likely to provide a base to both partners for boosting the coffee business in Asia, to meet the rising consumer demand for instant coffee in the region. In the meantime, Mitsubishi aims to boost its supply chains in emerging markets for coffee and other consumer goods.
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