F&N’s transformation to expand market penetration this year
KUCHING: Fraser & Neave Holdings Bhd (F&N) is transforming its decades-old route-to-market strategy in Malaysia which will see the group roll out a unified nationwide system to deepen and widen market penetration this year.
The exercise, piloted in the northern region of Peninsular Malaysia late last year, employed a combined route-to-market approach to ensure even greater product access to its total portfolio and optimised operational efficiencies.
F&N’s chief executive officer (CEO) Lim Yew Hoe in a statement yesterday said, “Now a unified team, (we) will extend the full complement of our soft drinks and dairies portfolios to all F&N outlets resulting in more business for our distributors, more products for our customers and even better efficiencies for us.
“This is expected to increase our market presence and potentially boost sales up to RM300 million in the coming years,” Lim said at the group’s 55th Annual General Meeting held in Kuala Lumpur yesterday.
Apart from that, he added F&N is re-evaluating its business model across all aspects of its value chain from the extensiveness of its portfolio, product and packaging innovation to warehousing and logistics.
Lim believed the exercise would place the group on a firmer footing for sustainable growth and extend its offerings beyond traditional markets. Lim said F&N will sharpen its focus on optimising the number of SKUs in each of its product categories while exploring just- in- time production to eliminate unnecessary inventory, warehousing and logistics costs.
He revealed that product packaging and innovation strategies will be introduced to cater for the specific needs of its diverse customer base from individual consumers, hotels, restaurants and cafes (HORECA) and industrial customers in the food, beverage and confectionery sectors.
“We will move away from the one-size-fits-all concept to customise our packaging and also our product offerings,” he added.
He shared that those initiatives were part of the group’s major transformation programme, which began in October 2015.
“As our transformation journey continues, our focus for the year will be to capture value from the exercise. We will intensify efforts to improve our cost and revenue efficiencies to further enhance the group’s sustainability and create added shareholder value.
“Similarly, we are putting more focus in growing our export business to be a key business pillars in financial year (FY17) ending September and the years to come,”Lim added.
Within just one year of renewed focus on export, Lim noted the group’s Malaysian export business grew by 31 per cent. He opined that growing the group’s export business, which represented the third pillar for F&N, was a natural progression after successfully expanding its business in Thailand.
He observed that F&N’s business currently not only contributed significantly to the group’s revenue and operating profit, but its strong market presence is evident throughout Thailand with street teas and coffees being synonymous with its canned milk brands.
For the financial year 2016 ended September 2016, he noted F&N continued its growth trajectory, expanding revenue by 1.5 per cent to RM4.17 billion from RM4.11 billion recorded in the last financial year. He added the group’s profit before tax rose by 32.7 per cent from RM333.8 million to RM442.9 million year-on-year.
Meanwhile, shareholders at the company’s AGM approved the payment of a final single tier dividend of 30.5 sen per share to be paid on February 6, 2017.