SilverBird: When two elephants collide...

I don't think I need to highlight Silver Bird's position as it is common knowledge that they may not survive financially. See below, it is a company with negative book value and will find it tough with Gardenia and Massimo under the PPB group having a good fight in the mass market bakery business. It reminds me of the Malay proverb, "Gajah sama Gajah bertarung, Pelanduk mati di tengah-tengah." Well, this is a guide to show that if you are not big enough in the mass market business, with much stronger competitors smaller players may find it tough to compete. Sad story though.

Balance Sheet of Silver Bird as at 30 April 2012

Note that unlike what some people perceive, Gardenia is a Singapore based company with Bernas owning 30% of the Malaysian entity. Massimo on the other hand is owned by PPB, a unit controlled by the Kuok's family. I like the fight though, as we people benefit when prices of bread become cheaper and there are more choices to choose from. It is high time there is another big player such as PPB to enter this market as Gardenia has been dominant for a while. PPB will be a tougher competitor to Gardenia than Silver Bird as by moving into the bread business, it is only going downstream from its flour business. On top of that, PPB is much stronger financially and going into bread may prove to be the right move.

I like competition. For example, I today bought a "Wheat Germ" bread (whatever it is) by Gardenia at RM2.40 and it is 10 sen cheaper than Massimo's.