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Other operating expenses were also
higher. These operating expenses
primarily comprised brand building
expenditures such as advertising,
promotions and sponsorships.
There were also one-off costs associated
with the establishment of a new
manufacturing facility in Ukraine, as well
as an increase in depreciation expenses
for property, plant and equipment due to
a larger asset base.
The Group continued to have a strong
cash position, with cash and cash
equivalents of US$46.6 million as at 31
December 2012, compared to US$35.1
million as at 31 December 2011.
Prepaid operating expenses and other
debtors increased noticeably from
US$2.2 million as at 31 December 2011
to US$6.7 million as at 31 December
2012. This was due to deposits made
for the purchase of land and machinery
arising from the Group’s investment in
several green-field projects.
Trade receivables fell by US$8.5 million
due to the Group’s increased effort to
secure timely payment from its debtors,
while inventories and trade payables
rose due to the acquisition of a Ukraine
subsidiary that resulted in an increase
in inventories carried. Other payables of
US$8.4 million was also primarily
due to the Group’s acquisition of its
Ukraine subsidiary.
The Group’s cashflow performance has
improved substantially due to the better
overall performance of our Group as
well as the diligence of our management
team. Net cash from operations was
US$27.0 million in 2012 compared to
US$5.9 million in 2011.
BRAND BUILDING
ACTIVITIES
Brand building is Food Empire’s biggest
strength. Food Empire’s brands are
household favourites in many countries
worldwide. Our flagship brand –
MacCoffee continues to dominate the
3-in-1 instant coffee segment in all our
key country markets while our other
brands such as Klassno, Petrovskaya
Sloboda and Kracks all hold good
market positions.
Throughout 2012, our Group engaged
in numerous brand building activities.
Among the highlights were:
PLMA “World of Private Label”
Food Empire participated in PLMA,
one of the world’s largest international
trade shows held in Amsterdam.
Food Empire used the trade show to
showcase our ability to offer private label
manufacturing for different product
categories, including instant coffee,
tea, beverages as well as a range of
potato crisps.
WORLD’S FIRST
ESPRESSO MACHINE
WAS CREATED BY
LOUIS BERNARD
RABAUT OF FRANCE.
JAPANESE-AMERICAN
CHEMIST, SATORI KATO,
CREATED A SOLUBLE
BLEND OF COFFEE -
INSTANT COFFEE
WAS BORN!
ITALIAN INVENTOR,
ACHILLE GAGGIA,
IMPROVED ON THE
ESPRESSO MACHINE,
MAKING THE FIRST
EVER ‘CAPPUCCINO’.
FOOD EMPIRE PRODUCES
OVER 3 BILLION SACHETS
OF INSTANT COFFEE
A YEAR!
Food Empire Holdings Limited Annual Report 2012
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