notes to the financial statements - Food Empire Holdings Limited

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EXECUTIVE CHAIRMAN’S MESSAGE FRONTIER IT HAS BEEN AN EXCITING AND REWARDING 12 MONTHS FOR EVERYONE AT FOOD EMPIRE. FINANCIAL YEAR 2012 SAW ANOTHER RECORD REVENUE TOGETHER WITH A HEALTHY BOOST IN OUR PROFITABILITY. • Food Empire products are exported to over 60 countries worldwide. • Over 200 different types of consumables are marketed under Food Empire brands. • Biggest market share of 3-in-1 coffee mix brand in Russia, Ukraine and Kazakhstan. • Over 57% of the Group’s revenue comes from Russia, where flagship brand MacCoffee is continuously ranked as the leading 3-in-1 coffee mix brand. • Growing at a rapid pace of 15% a year, China’s annual coffee consumption rate makes it the next big market to penetrate, besides India. MacCoffee GOLD Out of 6 highly reputable contenders for the freeze-dried coffee segment, MacCoffee qualified for the finals, coming in top 3 in ‘Control Purchase’, a Channel One Russia TV program, where a panel of viewers, buyers and experts determine which brands serve the finest products. 06
Food Empire Holdings Limited Annual Report 2012 The most significant event throughout the year was the appointment of Mr Sudeep Nair as the Group’s Chief Executive Officer. Mr Nair will take over the overall oversight of the Group’s day to day operations, while I, as Executive Chairman will continue to focus on the long term strategic objectives such as developing new markets, exploring opportunities for acquisitions as well as enhancing in-house production capabilities. Mr Sudeep Nair Mr Nair has been a vital part of our organisation and is the person responsible for our enormous success in Russia – our largest country market. Together, Mr Nair and I have 50 years of experience in the Group. Our passion for growing and protecting our business is as strong today as it was when we first started. The separation of the roles of Chief Executive Officer and Executive Chairman aligns with the new Code of Corporate Governance of the Singapore Exchange, and is also an important part of our business continuity planning. It allows us to groom the next generation of leaders, so as to provide our Group with a foundation of strong experienced talent across all its operations. We achieved strong sales and revenue performance in 2012 because we stayed focused on our key business strategies. First among our strategies, is our commitment to brand building. While we manufacture premium products, it is the intense loyalty our consumers have for our brands – the emotional bond that makes them put our products in their shopping baskets – that underpins the success of our business. Throughout our key markets, we continued our pattern of innovative and effective marketing activities, from trade shows to sponsorships as well as more traditional direct consumer advertising. Our strong brands give us a powerful position in the market place. They allow us to successfully defend our position against attempts by competitors to erode our market share. Klassno sampling activity in Hong Kong 2012 We took great strides during 2012 towards our goal of vertically integrating the upstream elements of our business. We are building a non-dairy creamer plant, a snack manufacturing facility as well as a packing plant in Malaysia. In addition, we are establishing a new instant coffee facility in the state of Andhra Pradesh in India due to come on stream in 2014. When completed, all these facilities will give us greater certainty and control over the supply and prices of our key ingredients. Food Empire took part in SIAL Paris 2012 RADIO GAME ON RUSSIAN RADIO In line with the APEC 2012 summit held in Vladivostok, Russia, the popular radio station, Lemma Radio, launched a live quiz in conjunction with this international event. Sponsoring the prizes, the contest raised brand awareness on MacCoffee. 07
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notes to the financial statements - Food Empire Holdings Limited

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