F&N reviewing plan for PJ land

KUALA LUMPUR: Fraser & Neave Holdings Bhd (F&N), which is allocating over RM300 million in capital expenditure (capex) for financial years ending Sept 30, 2016 and 2017, is reviewing the redevelopment plan of its land in Section 13, Petaling Jaya.
Its CEO Lim Yew Hoe said the review of the total development scheme is to maximise the value of the land and to suit the current property market condition.
Meanwhile on its capex plans, he said F&N will invest RM45 million in a new polyethylene terephthalate (PET) manufacturing line at its Shah Alam facility to meet the growing demand for ready-to-drink beverages.
The new line is set to be operational by June 2016 and will boost the group’s PET output by 40% or an estimated 108 million bottles a year. The PET manufacturing line is for F&N’s bottled drinks such as F&N Fruitade.
“For the PET product, in Malaysia, our business has got peak periods. The peak months will be like now, Chinese New Year and the next big peak is Hari Raya. What we are doing now is investing in a new PET line to allow us to deal with the Hari Raya period a lot better,” Lim told reporters at its AGM yesterday.
He said its current capacity is not enough to meet the additional demand during Hari Raya.
The new filling and packaging line for evaporated milk at its Rojana plant in Thailand, which was announced last year is also part of the RM300 million capex. The new line costs 300 million Baht and will commence operation in March 2016.
Lim said the remaining capex will be allocated for other projects that are currently in the approval process. He said these are all internal projects to expand its business in Malaysia and Thailand.
“It will be more than RM300 million. Last year, we also signed up the Kota Kinabalu Industrial Park (KKIP) land. If you put all in perspective, it will be far greater than RM300 million,” he added.
CFO Soon Wing Chong said the sale and purchase agreement for the KKIP land was signed early last year and F&N has already paid the substantial amount of the progress payment.
“The targeted vacant possession, if all goes well, with the infrastructure, will probably be in the second half of this calendar year. Thereafter, we will look into the optimisation of the land vis-à-vis the market demand and the supply situation.
“As mentioned earlier, that area that we have is actually designated as a halal hub so the product that we have along with our neighbours will all be halal certified,” he said.
As for exports, F&N is at the initial stages of proposing the entry of 100PLUS into Oman.
“In the Middle East, we have recently got ourselves into a position of getting firm orders to get into Oman with 100PLUS. We are in the process of looking at repackaging to make our products suitable for the Middle East market. That’s an early start. It is a sign of potential, it is not realised yet,” he said.
In November last year, Lim said that it aims to increase its export contribution to 10% of its revenue within five years and was looking to identify products suited for the African and the Middle Eastern markets. Its export business today contributes 4-5% to total revenue.
Moving forward, he said it aims to top the RM4 billion record revenue achieved in FY15. He said F&N’s business is resilient due to its products diversity and geographical operations.
At the AGM yesterday, shareholders approved the payment of a final single tier dividend of 35.5 sen per share amounting to RM130.1 million to be paid on Feb 4, 2016.