Bernas Strategy Case Study

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What actions if any, are your company taking to pursue continues improvements in how it performs certain value chain activities?

CONTROL AND EVALUATION

Ratings Financial Ratios Bernas local paddy market share rose to 33.3% in 2011 from 32.2% in 2010. Bernas also seeks to minimize losses of rice stocks from 3.6% in 2010 to only 1.8% in 2011. The turnover of processed rice also been increased from 56.5 % in 2010 to 57.4% in 2011. Total sales of rice increased by 3.1% to 1.41 million tonnes from 1.37 million tonnes recorded in 2010. however, local rice sales declined by 9.5% to 537.771 tonnes in 2011, from 593.944 tonnes in the previous year. For the first three quarters of 2011 the cumulative total net operating revenues increased with 10.94% Bernas, of RM2,313,831 to RM2,566,923. Operating revenue rose to RM227.889 from RM186.636 which means a change of 22.10%. Results period increased 1.26% reaching RM147,430 at the end of RM145.593 period last year. Return on equity (Net income / Total equity) increased to 14.24% from 13.53%, the Return On Asset (Net income / Total assets) increased to 5.50% from 4.74% and the Net Profit Margin (Net Income / Net Sales ) increased to 6.29% from 5.74% compared with the same period last year. Debt to Equity Ratio (Total Liabilities / Equity) was 185.53% compared to 151.96% of last year. Finally, the Current Ratio (Current Assets / Current Liabilities) increased from 1.90 to 2.26 over the previous year.

CONTINGENCY PLANNING

- Joined other agencies in the development of various projects related to benefit Bernas who can ensure continuity of Bernas in markets such as Project EPP 11 involving rice land area of ​​5,100 hectares in Batang Lupar, Sri Aman, Sarawak, started a pilot project on the land area of ​​70 hectares with joint central government, state government agencies and local farmers.

- Add rice stockpile to stockpile 200,000 tonnes of stockpile metrikdan of 292,000 tonnes, to address the concerns of food shortages if disaster struck Southeast Asia.

- Bernas also signed a Memorandum of Understanding with Vietnam in October last year for the supply of up to 800,000 tonnes of rice when it is necessary to ensure there are no disruptions occur during the year.

- Binding supply contract as the preferred buyer in Thailand and Vietnam. Through this contract, rice traded consignment or the longest period for the purchase of three months forward

- Upgrading Laboratory Bernas-UPM from laboratory to laboratory analysis of food technology research and development (R & D) fully. By raising these upgrades, Bernas has research and development capabilities continuously without relying on a third party

CONCLUSION

Bernas is a company that has a strong brand in Malaysia as well as from the support of the government of Malaysia success Bernas is also due to efficient management and effectively applied by the Group Tradewind who are shareholders by 72% where the Group is headed by Tan Sri Syed Mokhtar Al Bukhari is a leading entrepreneur in Malaysia.