F&N renews Asean licences for Nestle liquid milk brands

PETALING JAYA: Fraser & Neave Holdings Bhd (F&NHB) and its dairy subsidiaries have renewed licences for Société Des Produits Nestlé S.A. and Nestec S.A. (Nestlé) liquid milk brands granted in 2007.
Consequently, F&N will continue to manufacture and distribute Carnation, Bear Brand, Bear Brand Gold, Ideal Milk and Milkmaid in Singapore, Thailand, Malaysia, Brunei and Laos, until 2037.
The licences, which were originally granted by Nestlé in 2007 under a RM310 million deal, saw the F&NHB Group acquiring Nestlé's canned liquid milk, UHT and chilled dairy and juice business, in addition to acquiring relevant Nestlé production facilities and equipment in Thailand, and the Tea Pot brand.
Under the new arrangements, F&NHB will continue to manufacture, promote, sell and distribute Carnation in Thailand, Laos and Cambodia; Carnation sweetened condensed milk and evaporated creamer, Ideal evaporated milk, Milkmaid sweetened condensed milk and sweetened beverage creamer for Malaysia, Brunei and Singapore.
F&NHB will also continue to manufacture and distribute Bear Brand Sterilised Milk and Bear Brand Gold for Thailand and Laos.
Meanwhile, Milo UHT and Bear Brand UHT for Thailand and the Indochina market returns to Nestlé in a strategic realignment that will enable Nestlé to strengthen their regional strategy in this category.
F&NHB CEO Lim Yew Hoe said the new licence agreements and renewal agreements as a tremendous boost to deepening and widening the Group's footprint in the Asean region.
According to Lim, F&NHB will invest a further Thai Baht 300 million in 2015 on an additional filling and packaging line to undertake manufacturing of the Carnation evaporated milk at its manufacturing plant in Rojana, to cater for growing market demand as its current capacity is nearing full utilisation.
Carnation is the number one condensed milk brand in the premium segment with two thirds of Thailand's total condensed milk market and a strong 20% growth in sales last year, even as the the condensed milk industry in Thailand as a whole, declined slightly.
Lim said there will be no significant impact on F&NHB's overall performance for the 2014/2015 financial year.
"The long-term arrangements will enable F&NHB to strengthen our focus on core categories. We have the broadest portfolio of canned milk brands in the region and are confident of leveraging our expertise in the marketplace to build momentum through various renovation and innovation initiatives," he added.