Sold under the firm's flagship MacCoffee brand, Food Empire's instant mixed coffee concoctions are popular in Central Asia, the Middle East, Ukraine and Russia where, according to a 2004 AC Nielsen report, it holds a bigger slice of the mixed coffee market than Nestle, the world's largest food company.
In Russia, the firm spends heavily on marketing and co-sponsored the Russian soccer team in the 2002 World Cup. "We already have a good penetration in former Soviet countries like Latvia, Estonia and Lithuania.
We will cautiously expand into new countries like Croatia and Slovenia," Food Empire's chairman Tan Wang Chew told Reuters in an interview.
He added that the firm is planning to expand its distribution into Western Europe as well. Besides instant beverages, Food Empire also sells canned drinks, potato crisps, candy and breath fresheners under 11 different brands.
The firm is already selling frozen finger food to supermarkets in Western Europe. Tan said the firm would still focus on its key markets Russia, Eastern Europe and Central Asia, which account for 90 percent of its revenue.
"We can't be shooting our bullets in every direction. So we will focus more on our key markets where there is still much potential for growth," said Tan.
The firm is also considering building a factory in Russia its first outside Southeast Asia.
Formerly known as Future Enterprises, the firm began as an exporter of electronics goods, such as computers and television sets, to Eastern Europe.
It switched to selling instant coffee in countries like Kazakhstan in 1992. "The company may have a big share of the market but it sells coffee in non coffee-drinking nations.
These countries are not exposed to coffee culture so the coffee-drinking market might not be a very big one," said a dealer at a local brokerage.
Tan said that although doing business in developing countries exposes the firm to uncertainties, those also present high barriers to entry for its competitors.
Food Empire announced to the Singapore Exchange in August that higher import costs into Russia, due to changes in customs regulations, are expected to adversely affect the company's performance in the second half of 2005.
The news sent the company's shares tumbling from S$0.35 to an intrude low of S$0.28. They have languished around S$0.30 and are down 18 percent in the year to date.
Tan declined to elaborate on the August statement but said he was confident Russia would remain the firm's main growth driver. "Russia's economy is doing well because of its oil and gas reserves.
A more affluent people will translate into better business for the company," he said. In 2004, the firm had revenue of S$160 million ($94 million), more than double the S$59 million worth of sales in 2000. Over the same period, net profit more than tripled to S$18 million.
"Since listing, we have had a consistent year-by-year top-line growth of 15 to 20 percent.
This will continue to be our target," Tan said. Food Empire has a market cap of $67 million and trades on a historical price/earnings ratio of 6.25. Swiss giant Nestle is worth $120 billion and trades at 19.67 times earnings.