F&N SEES RM300M REVENUE BOOST
Optimism on back of plan to expand production capacity at Pulau Indah manufacturing facility
FRASER & Neave Holdings Bhd (F&N) expects an additional revenue contribution of RM300 million on the back of its RM25 million capital expenditure (capex) in the current financial year.
Chief executive officer Lim Yew Hoe said the capex would be allocated for the F&N Dairies manufacturing plant in Pulau Indah, Selangor.
“The expansion will allow up to five million cases in additional annual capacity to accelerate exports from Malaysia and fuel do- mestic growth,” he said at a press conference after F&N’s annual general meeting (AGM) here yesterday.
Lim said the current capacity of the Pulau Indah plant was about 16 million canned milk products per annum.
“The five million additional capacity at Pulau Indah would translate to an additional RM300 million in revenue, once fully utilised,” he said.
The capex will also address much-needed capacity for exports and domestic markets.
“This is expected to accelerate F&N’s exports business towards achieving its sales target of RM500 million from Malaysia ahead of its 2020 deadline.
“The company will carry out similar capacity expansions in its plants in Rojana and Pakchong, Thailand,” he added.
F&N currently has five manufacturing plants in Malaysia and two in Thailand.
“Overall, we target to achieve RM800 million in total exports by 2020,” he said.
F&N exports to 55 countries including Angola, Bahrain, India, Iraq, Mexico and Yemen.
Lim said F&N would also introduce “healthier” products, which contain less sugar, for the Malaysian market this year.
“We expect to offer a healthy option of new variant products in a few months,” he said.
F&N also expects lower production costs this year, citing the moderating sugar price and the knock-on effects of the stronger ringgit as the primary causes.
“We further reduced the sugar index in our portfolio, which is 24 per cent lower compared with the financial year ended September 30, 2007.
“The impact of the stronger ringgit and Thai baht should be slightly favourable, even though it presents a challenge to exports,” said Lim.
During the AGM, F&N also appointed three new directors, including two women, to the board, advancing the group’s gender representation.
The newly appointed directors are Datuk Mohd Anwar Yahya, Faridah Abdul Kadir and Aida Md Daud.
F&N chairman Tengku Syed Badarudin Jamalullail welcomed the new appointments and said he looked forward to their contributions, especially the women directors, in offering new perspectives to the company’s initiatives, such as advancements in health, nutrition and product innovations.