Philippines’ Top Noodle Maker Downsizes Loss-Making Alternative Meats Busines

Forbes

Monde Nissin—the largest Philippine maker of instant noodles by revenue controlled by Indonesia’s billionaire Kweefanus family—is scaling down Quorn’s operations to cut losses at its U.K.-based alternative meats unit.  Read the full story on Forbes: https://www.forbes.com/sites/iansayson/2024/11/25/philippines-top-noodle-maker-downsizes-loss-making-alternative-meats-business/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, Philippines' top noodle maker downsizes loss-making alternative-meats business.

00:08Mande Nissen, the largest Philippine maker of instant noodles by revenue

00:13and controlled by Indonesia's billionaire Kwifanis family,

00:16is scaling down Quorn's operations to cut losses at its UK-based alternative-meats unit.

00:23According to Jesse Teo, chief financial officer of Mande Nissen,

00:28Quorn's capacity exceeds what's needed to serve the UK and the US,

00:32where the company's expansion didn't go as planned, amid softer demand.

00:37He said that the downsizing could help Quorn return to black.

00:41Teo told Forbes Asia,

00:43The growth wasn't there, so we have to dial down.

00:46This restructuring is meant to make the business healthier.

00:48We overinvested in the business, not only in capacity.

00:53The group bought Quorn in 2015 for $831 million

00:57and spent almost $340 million to expand the business,

01:01bringing total investments to about $1.2 billion.

01:06Teo said that Mande Nissen will retrench hundreds of Quorn's workforce

01:10as it shuts plants and streamlines its supply chain.

01:14The £15 million or $19 million overhaul includes the appointment of a new CEO at Quorn,

01:21which in 2021 had 900 employees and exports to 15 countries,

01:25including the US, Singapore, and Australia.

01:29John Gautmaitan, chairman at Luna Securities in Manila, says,

01:35Mande, like many other meat alternative players, misjudged the market.

01:39The novelty of fake meat is gone, it's not gaining traction,

01:43and Mande is taking corrective action.

01:46Mande Nissen CEO Henry Soesanto, who helped transform the company from a biscuit maker

01:52into the Philippines' largest manufacturer of instant noodles under the Lucky Me brand,

01:57spearheaded the company's push into alternative meats

02:00amid hopes global trends toward sustainable and healthy eating would boost demand.

02:06Soesanto, a key shareholder of Mande Nissen,

02:09along with the company's chairman emeritus Artono Kouifanis, his brother-in-law,

02:14expanded Quorn by opening a £150 million manufacturing plant in the UK in 2018

02:21that doubled its capacity to 40,000 tonnes a year.

02:25Quorn then described the facility as the world's biggest meat alternative production plant.

02:31In 2021, Soesanto allotted $335 million from Mande's $1.1 billion IPO proceeds

02:39to grow Quorn's presence in the US, then the biggest alternative meats market,

02:43while ramping up capacity in the UK.

02:46But with rising sales and cost pressures at home and abroad, including the US,

02:51Teo said Mande halted construction of a fifth fermentation plant in the UK,

02:56even though the project is more than 50% completed.

02:59While Quorn's position now has improved to a third of UK's alternative meats market,

03:04Teo said it's using capacity equivalent only to two and a half of its four fermentation plants.

03:10Teo said, quote,

03:22As part of its far-reaching revamp, Quorn ended a marketing partnership

03:26with Hollywood actress Drew Barrymore that started in 2021

03:31and retrenched several executives who were hired to advance its US expansion, according to Teo.

03:37The restructuring, which includes reducing inventory and cutting delivery time,

03:42will generate £8 million in total savings in 2024 and in 2025,

03:47when Quorn is expected to be EBITDA positive.

03:50This according to Soesanto earlier this month,

03:52when Mande reported nine-month earnings that showed its alternative meats business

03:56reporting a core net loss of $11.1 million.

04:01Soesanto, Quifanis, and their family,

04:04which includes Mande Nissen president and co-founder Betty Ang,

04:07have a combined net worth of $2.2 billion,

04:11largely on the value of their controlling interest in the Manila-based conglomerate.

04:16This according to Forbes Asia's list of the Philippines' 50 richest that was published in August.

04:21Ang, who is married to a brother of Quifanis,

04:24co-founded Mande Nissen in 1979 with her late father-in-law, Ididjat Darmono.

04:30Soesanto is married to Darmono's daughter, Monica, the company's treasurer.

04:36For full coverage, check out Ian Saison's piece on Forbes.com.

04:42This is Kieran Meadows from Forbes.

04:44Thanks for tuning in.

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