What's Happening?
Butterfield FB Bhd, a manufacturer of coffee and tea powders, has filed for a listing on the ACE Market to raise funds for expanding its production facility in Penang. The company aims to more than triple its production capacity at the Bukit Minyak premises
to nearly 12,600 metric tons annually and increase storage capacity by 17%. The expansion includes installing a manufacturing line dedicated to matcha powder blends, which will feature an automated packing process. Butterfield FB, a family-run business, primarily manufactures coffee and tea extract powder blends under its house brand 'Butterfield' and trades third-party food ingredients and instant beverage premixes in Malaysia and Thailand. The company reported a net profit of RM30.4 million on revenue of RM245.33 million for the year ending April 30, 2025.
Why It's Important?
The proposed listing and expansion reflect Butterfield FB's strategic response to the growing market demand for matcha, a popular tea variant. By increasing production capacity and dedicating resources to matcha powder blends, the company positions itself to capitalize on this trend, potentially boosting its market share and revenue. The expansion could also enhance the company's competitive edge in the Southeast Asian beverage market, where matcha's popularity is rising. The IPO proceeds will finance the purchase and installation of new systems, supporting Butterfield's operational growth and efficiency. This move may attract investors interested in the burgeoning matcha market and the company's growth prospects.
What's Next?
Butterfield FB plans to begin operations of its second manufacturing line by the end of 2025, with the third line dedicated to matcha powder blending starting in the first quarter of 2026. The IPO will offer up to a 27.8% stake in the company, with the price to be determined later. Founder Yeap Kim Siew and his son Yeap Chin Loon will sell part of their existing shares in the IPO. M&A Securities is acting as the adviser, sponsor, underwriter, and placement agent for the IPO. The success of the listing and subsequent expansion could lead to increased production capabilities and market presence for Butterfield FB.
Beyond the Headlines
The expansion into matcha production highlights the cultural shift towards healthier beverage options, with matcha being recognized for its health benefits. This move by Butterfield FB could influence other beverage manufacturers to explore similar expansions, potentially leading to increased competition and innovation in the industry. The company's focus on automated processes also underscores the trend towards technological advancements in manufacturing, aiming for efficiency and scalability.
