Munching its way from Batu Pahat to being taken over by Universal Robiana Corporation (URC) for a cool RM1.925 billion.
How did Munchy's grew from its humble beginning to a respected international player?
🧵
How did Munchy's grew from its humble beginning to a respected international player?
🧵
1. Munchy's was started by two brothers SK Tan and LK Tan who wanted to step out of their father's shadows. Their late father was the founder of Hwa Tai.
Why the name Munchy? It was derived from mandarin term 'Mai Qi'. 'Mai' meant flour or wheat & 'Qi' refers to magical quality.
Why the name Munchy? It was derived from mandarin term 'Mai Qi'. 'Mai' meant flour or wheat & 'Qi' refers to magical quality.
2. With an initial investment of RM80,000 (RM170k in today's terms!), they bought a second-hand wafer stick machine to produce wafers, wafer sticks and biscuits.
From an OEM biscuit manufacturer to a household name, the Munchy’s brand was born in 1993.
From an OEM biscuit manufacturer to a household name, the Munchy’s brand was born in 1993.
3. The brothers were ambitious! In 1996, they built a bigger plant in Muar - 120k sq ft factory and bought the best equipment in the industry.
They borrowed RM40 mil from banks to fund their ambitions. Their revenue back then was only RM14 mil but bankers believed in them.
They borrowed RM40 mil from banks to fund their ambitions. Their revenue back then was only RM14 mil but bankers believed in them.
4. Shortly after, three products were launched - MUNCHINI, MUZIC & LEXUS. The latter 2 which are still in production until today!
In 1996, Munchy's 120k sq ft factory was considered the most advanced fully automatic wafer plant in South East Asia.
In 1996, Munchy's 120k sq ft factory was considered the most advanced fully automatic wafer plant in South East Asia.
5. The biscuits were a hit with locals! The brothers wanted to share the joys of Munchy's with the rest of the world.
So they brought in another Sibling, CK, who graduated from US to join Munchy's.
Munchworld Marketing was established in 1997 as Munchy's worldwide distributor.
So they brought in another Sibling, CK, who graduated from US to join Munchy's.
Munchworld Marketing was established in 1997 as Munchy's worldwide distributor.
6. Remember what was happening during 1997? The Asian Financial Crisis. Imagine having RM40 mil debt at a time of crisis.
Thanks to its pivot to international markets, Munchy's survived AFC and its revenue jumped from RM20mil in 1998 to RM50mil in 1999.
Thanks to its pivot to international markets, Munchy's survived AFC and its revenue jumped from RM20mil in 1998 to RM50mil in 1999.
7. To further grow and run the business, CK knew Munchy's had to tap technology.
In 1997, CK invested RM500k in Munchy's IT systems. He believes technology improves efficiency.
In 1999, the brothers brought in consultants to teach them how to run the business professionally.
In 1997, CK invested RM500k in Munchy's IT systems. He believes technology improves efficiency.
In 1999, the brothers brought in consultants to teach them how to run the business professionally.
8. While Munchy's dominated the local market in the early 2000's, churning 20k cartons of products a month - the brand had a very Chinaman vibe.
CK wanted to move away from it & hired consultants to give the branch a refresh.
That's how the "Bite Me" tagline was born!
CK wanted to move away from it & hired consultants to give the branch a refresh.
That's how the "Bite Me" tagline was born!
9. By the end of the decade (2010), Munchy's were making as much as RM300 mil of revenue per year.
The siblings' dream of sharing Munchy's joy to the world did come true as Munchy's products can be found in more than 50 countries today!
The siblings' dream of sharing Munchy's joy to the world did come true as Munchy's products can be found in more than 50 countries today!
10. While everything was in place for Munchy's - good branding, product line up, people& processes - its bottom line was decreasing.
Then CK passed the role of CEO to an outsider, Rodney Wong, in July 2014.
Prior to the role, Rodney was a GM in Petronas Lubricant.
Then CK passed the role of CEO to an outsider, Rodney Wong, in July 2014.
Prior to the role, Rodney was a GM in Petronas Lubricant.
11. Rodney realised the company was too focused on growing supply and neglected the bottom line. So he made the company embarked on a profitable growth strategy.
It boiled down to two crucial items:
- Trim costs w/o impacting quality
- Invest in people
It boiled down to two crucial items:
- Trim costs w/o impacting quality
- Invest in people
12. The strategy paid off and Munchy's won many more accolades such as The Brand Laureate World Halal Best Brands Awards (2018), Superbrands Status (2015), Putra Brand Awards (2015, 2017, 2018, 2019), The Asian Export Award (2019) and many more.
13. In 2018, Munchy Food Industries Sdn Bhd ("MFI") was acquired by CVC Capital Partners Asia Fund IV ("CVC Asia IV") for an undisclosed amount.
According to Bloomberg, the figure was close RM1.1 billion for 100% stake in MFI and its Malaysian subsidiary, Munchworld Marketing.
According to Bloomberg, the figure was close RM1.1 billion for 100% stake in MFI and its Malaysian subsidiary, Munchworld Marketing.
14. Just last week, Philippine F&B player Universal Robina Corporation (URC) acquired MFI & Munchworld Marketing from CVC Asia IV for RM1.925 bil!
That's a cool 74.5% return for the PE firm.
An amazing growth story of a local brand!
That's a cool 74.5% return for the PE firm.
An amazing growth story of a local brand!
Sources:
dealstreetasia.com/stories/univer…
theedgemarkets.com/article/entrep…
theceomagazine.com/executive-inte…
theedgemarkets.com/article/smes-m…’s-big-bites
https://t.co/tTzwKwyFuJ
munchys.com/about-us/our-h…
optionstheedge.com/topic/people/m…’s-ceo-rodney-wong-grows-biscuit-manufacturing-business-investing-its-people
dealstreetasia.com/stories/univer…
theedgemarkets.com/article/entrep…
theceomagazine.com/executive-inte…
theedgemarkets.com/article/smes-m…’s-big-bites
https://t.co/tTzwKwyFuJ
munchys.com/about-us/our-h…
optionstheedge.com/topic/people/m…’s-ceo-rodney-wong-grows-biscuit-manufacturing-business-investing-its-people
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