04
SUNMOON FOOD COMPANY LIMITED
ANNUAL REPORT 2015
EXECUTIVE CHAIRMAN’S
STATEMENT
Dear Shareholders,
I am pleased to present our annual report for FY2015.
LOOKING BACK
SunMoon Food Company Limited was embroiled in a lengthy
debt restructuring from 2008 and it was only in October
2015 that SunMoon, via numerous settlements, was able to
distance itself from its past and focus on the actual running
of the business.
Prior to the conclusion of the debt restructuring, the
management could only focus on the day-to-day business
operations, and had little bandwidth or cash-flow to focus
on growing the business. The Group also had its cash tied
up in garlic inventories as a raw material. The production
cycle to yield dehydrated garlic takes a year to complete,
limiting SunMoon’s cash-flow for long periods and its growth
potential.
In FY2015, we made a strategic decision to shift towards
an asset-light, consumer-centric and brand-focused
business model. We began channelling resources from
slow growth areas towards the new asset-light business
model. We made a collective decision to focus on the fresh
and streamlined our produce operations under the Fresh
Division. We believe that through reducing inventory and
increasing cash flow, we would be able to generate greater
value and create room for growth.
With the spotlight now firmly on the Fresh Division, we also
began introducing new consumer products to capitalise on
our strong existing brand equity, our sourcing ability and
tap on our growth potential in new and existing markets.
THE “NETWORK X GEOGRAPHY X PRODUCT” BUSINESS
MODEL
Network
– We aim to be a global specialist in fruit-related
and fresh products. With a global rise in consumer spending,
and an increasing shift towards digital spending, we believe
that an expansion of the current network of wholesale and
modern trade channels is necessary to sustain the growth
of our customer base. As part of our expansion efforts, we
have made decisive moves to increase our digital presence,
in addition to growing our network of third-party brick-and-
mortar stores operated by our customers.
Geography
– Via our geographical expansion, we aim
to bring quality products to new countries to reach out to
new consumers, and secure the mindshare of the new
sophisticated consumers. When they see the SunMoon
brand, they think of health, freshness and all-natural
goodness. From the sourcing perspective, we have also
secured products originating from countries in the Southern
Hemisphere with reverse meteorological seasons, bringing
their wholesome goodness to consumers around the world.
