Petra Foods has said it will exit its loss-making Singapore distribution business to focus on "key markets".
The company said Delfi Singapore, its wholly owned subsidiary, would sell its agencey brands portfolio and inventory to Auric Pacific Marketing, a subsidiary of Auric Pacific Group.
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"For many years Delfi Singapore’s distribution business has not been profitable. This is due to the relatively small scale which the business has been able to achieve – despite strenuous efforts to build the business to a point where it could yield positive returns for the group," Petra said in the announcement.
The company added that the sale of the distribution business will not impact Petra's aim of expanding its own chocolate brands in Singapore. This will be achieved through the appointment of Auric Pacific as a distributor, Petra said.
CEO John Chuang stressed that the move does not impact Petra's strategy, which focuses on establishing its own scalable distribution businesses in key markets. "The distribution business model remains a core part of our business strategy because with the scale we have in our key markets of Indonesia, Philippines and Malaysia, the complementary nature of our own brands together with the agency brands allows us to gain shelf space dominance. We are determined to pursue every opportunity to grow this vital part of our business in all of our key markets and growing our distribution businesses means expanding the reach and distribution of the products of all of our principals."
Chuang also stressed that Petra continues to eye growth in Singapore. "We will continue with the development of our Delfi brand of chocolate confectionery in Singapore through the appointment of Auric Pacific."
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