If you’ve ever slurped laksa (spicy noodle soup) at a Food Junction food court, munched a croissant or baguette at a Delifrance café or simply marvelled at the array of fabulous South East Asian dishes to sample at TV favourite, Chef Wan’s restaurant ‘1 Market’ you’ve been a customer of Auric Pacific Group Limited (APGL) (SGX: A23).
This Singapore-based investment holding company is primarily concerned with food – manufacturing, distributing and retailing food products across Singapore, Indonesia, Malaysia and China.
APGL is 49% owned by Indonesian tycoon Stephen Riady and forms part of the sprawling conglomerate the Lippo Group that was founded in 1950, by Stephen’s father Mochtar Riady.
Stephen Riady was born in Indonesia, but moved to Singapore for schooling when he was 10. He went on to study at the University of Southern California before returning to Indonesia to become Executive Director of his family’s company Lippo Limited and was appointed Director of Auric Pacific in 1997.
However, the story of one of Auric’s most famous brands begins way back in 1930s Singapore.
The Sunshine Bakery began as a small business operating from a shop house in Geylang, Singapore. Singapore Cold Storage (SCS) bought the company and Singapore’s first commercial bakery saw its fresh loaves delivered across the island, as well as neighbouring Malaysia.
Sunshine continued to attract loyal customers and in 1948, began fortifying its bread with vitamins. By 1950, the popular bakery was producing 14 different bread types, in addition to confectionery and flour products.
By 1992, the company had built a brand new production plant – the largest in Asia that could turn out a whopping 6,000 loaves per hour and in 2004, was awarded world-renowned Superbrands status.
When Auric took over Sunshine however, wastage was relatively high. For every 100 loaves distributed 23 were being sent back the next day. What’s more, for every 8-10 loaves delivered to some small “Mom and Pop” shops, three would be sent back.
Auric decided to stop delivering to the lowest performing stores and instead invited those shopkeepers to collect their own bread if they still wanted it, but with no returns – and reduced their wastage from 23% to just 15%.
Cookies from returned bread
However, Riady was still not satisfied that so much bread was being left for the birds and investigated ways that it could be used.
Sunshine now makes cookies from its unused bread – and with a nice profit margin plus nine-month shelf life Auric is laughing (although their feathered friends around Senoko are pretty disappointed).
Free hotdog buns
Sunshine was also giving a free packet of hotdog buns worth $1 with every $1.20 loaf of bread – as rival bakery Gardenia was offering the same deal.
Riady reasoned that consumers used to their bread are unlikely to switch and stopped the offer. Three month’s passed and Riady was relieved to see his gamble had paid off – sales had not changed (Gardenia followed suit shortly after).
Food courts and Restaurants
Auric Pacific also owns the popular Food Junction foodcourts, serving affordable local and international dishes in Singapore, Indonesia and Malaysia, as well as French bakery chain Delifrance, serving European styled dishes as well as the eponymous baguettes and croissants.
But did you know…
- Dr Stephen Riady was awarded the accolade “Strategic Investment Entrepreneur of the Year” in the Ernst & Young Entrepreneur of the Year Awards in Singapore, 2007.
- Stephen is also the Executive Chairman of Overseas Union Enterprise (OUE) (SGX: LJ3).
- Mochtar Riady and family currently occupy position #687 on Forbe’s list of the World’s Billionaires, with an eye-popping net worth of $2.5bn.
- Sunshine was the first bakery in Asia to be awarded the three PSB awards: ISO 9001 for quality, ISO 14001 for environmental friendliness, HACCP for food hygiene and safety.
- Stephen Riady made headline news in 2013, when he launched a $13.1b cash offer for the shares of the 130-year-old Singaporean beverage manufacturer Fraser & Neave (F&N (SGX: F99) – a company five times bigger than his own. He lost out to Chang Beer producer Thai Beverage (SGX: Y92) – but established himself as a high-stake player.
Today, Auric Pacific has a Property Investment segment, leasing residential and commercial property as well as one concerned with securities investment.
However, the company’s main priority is still food, distributing both food and non-food items as well as manufacturing well known brands including Buttercup and SCS butter throughout Singapore, Malaysia, Indonesia and China.
Auric Pacific also continues to run a wide variety of cafes and restaurants such as Alfafa, Eggs & Berries, MEDZS, Malone’s and Chef Wan’s 1 Market in Plaza Singapura as well as 10 Food Junction food courts. Auric also owns the Lippo Chiuchow restaurant in Hong Kong and Li Xuan in Shanghai.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Alison Hunt doesn’t own shares in any companies mentioned.