The Star Online: Business
The Star Online: Business |
- Universal McCann wins KFC, Pizza Hut accounts
- Nestle: Price-rise report not verified
- Floods may affect Mudajaya’s earnings
| Universal McCann wins KFC, Pizza Hut accounts Posted: 14 Oct 2011 08:19 PM PDT PETALING JAYA: Universal McCann (UM) has beaten three other media agencies to manage the media buying duties for fast-food brands KFC and Pizza Hut, effective Jan 1, 2012. The other agencies that had pitched for the accounts were Mindshare, Trapper MPG, Universal McCann and Zenith Media. It is understood that incumbent agency Carat Malaysia was not invited to the pitch. UM chief executive officer Prashant Kumar said he was looking forward to working with the two brands. "It's both a joy and a challenge to get an opportunity to work on such brands and help bring more meaning to what they already stand for. We are looking forward to it," he told StarBizweek. Prashant said UM was chosen as both brands "were looking for an agency that could create competitive advantage in media." "If you look at the last five years, Malaysian consumers have changed significantly and, as consumers change, communication must change too. The fast-food category is getting highly competitive and the clutter is mind-numbing," he said, adding that he was excited about winning the contracts. "KFC and Pizza Hut are icons of shared happiness in Malaysia," said Prashant. According to a report based on Nielsen figures, both accounts are worth US$40mil (RM128mil), making it one of the biggest pitches in the local market. Nielsen ranked KFC as the 10th biggest advertiser in the country last year based on official media rate cards. Full content generated by Get Full RSS. |
| Nestle: Price-rise report not verified Posted: 14 Oct 2011 08:19 PM PDT PETALING JAYA: News that Nestle (M) Bhd is considering a price hike for certain dairy products may have sent chills down local households but the company has clarified that the reported information is not verified. An English daily (not The Star), quoting sources, had reported that Nestle was planning to increase prices of selected dairy products between 10% and 30% as early as next month, citing the rise in the costs of raw materials, production and logistics due to the floods in Thailand. However, Nestle told StarBizWeek that the report was not verified and that "pricing decision for any product category is influenced by various factors (and) in the case of milk products, the global milk price is one of the main influencers in determining the prices." In its email response, it said that it would continue to evaluate closely the development of the global milk pricing and decide on the pricing policy accordingly. "The story which was published in (yesterday's) paper was not based on facts and we are not aware of 30% increase in any of our milk product price. Our priority is always to be competitive in the market place and, at the same time, to deliver quality products with good value to the consumers," it said. Despite the report, industry players did not jump on the opportunity to raise their prices. F&N Dairies (M) Sdn Bhd, for one, is not raising its product prices. When contacted, F&N Dairies general manager of corporate affairs Poh Eng Lip said the dairy products manufacturer had no plans to adjust its prices because there was no reason to. "(We) will not raise prices of our canned milk products. The flood situation in Thailand is a cause for concern. However, it will not impact the price of our condensed and evaporated milk products in Malaysia," he said. In fact, the local dairy arm of F&N is increasing its production by 20% which will be entirely dedicated to the Thai market. A source from another dairy powerhouse, Dutch Lady Milk Industries Bhd, also said that "consumers can be rest assured that Dutch Lady Malaysia will not be increasing prices for its products." The floods will not affect its manufacturing as well because all of Dutch Lady products are produced locally. Nestle, as a food and beverage heavyweight, has long been seen as a reference body for other food manufacturers and any price adjustments on its terrain would expectedly have a domino effect on the F&B market at large. That said, Nestle has always maintained that it tries to avoid passing cost increases to consumers through operational efficiencies and internal cost-saving measures. An analyst of blue chip consumer counters like Nestle and F&N said that there should be no reason for the food and beverage giant to raise its dairy-based product prices as most of the operations for such products were in Malaysia. However, he added that if the price adjustments came into effect, Nestle would maintain good profit margin as "time and again, it is proven that people continue to buy dairy products even though prices are raised." TA Securities Holdings Bhd consumer analyst Farhana Hamzah said that "following Nestle's track record, once its costs hit a certain percentage and it can no longer absorb the pressures, it would have to pass the price increases to consumers. Likewise, when its costs drop, it will adjust accordingly." Full content generated by Get Full RSS. |
| Floods may affect Mudajaya’s earnings Posted: 14 Oct 2011 08:18 PM PDT PETALING JAYA: Mudajaya Group Bhd's earnings could be impacted by the floods in India which have affected its independent power producer (IPP) project, analysts said. According to OSK Research, the floods have caused delays to Mudajaya's RM3.4bil IPP equipment procurement contract. "While heavy rainfall during the monsoon season is common, the rain this year has been unusually intense. "Earlier this year, Mudajaya announced that its IPP job had experienced delays because of protests by villagers at its project site but the issue was eventually resolved," it said in a report. Overall, the protests and flooding have caused Mudajaya's project to be delayed by an estimated eight to nine months, it pointed out. It added the contract delay involved mainly civil works, which were estimated at 10% to 15% of the contract value. The Chhattisgarh plant in India is a coal-based power plant with four 360 MW units of modular form equipment. "Further delays to the plant may affect the group's earnings for next year, but with the plant to be completed by 2013, the group will have a stable recurring income from the project as they also co-own it," said a local research house analyst. It was reported that the plant, when fully operational, might provide a minimum income of between RM60mil and RM70mil to the group. On the local front, an analyst said the group, with its expertise in power plant design and construction, has a good chance to participate in the 1,000 MW Tanjung Bin extension, which is expected to be worth RM675mil to RM900mil. OSK Research said there was still jobs flow for Mudajaya and it was targeting some contracts from the West Coast Expressway. Full content generated by Get Full RSS. |
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