Focusing on export growth

KUALA LUMPUR: Beverage maker Fraser & Neave Holdings Bhd (F&N) is planning to increase its own brand exports this year, as it focuses on growing its export business.

“Export comes in two forms. We can export our own brand, and we also use our plant to produce products for other brands. Today, other brands’ (export) is still slightly bigger than our own brand,” its CEO Lim Yew Hoe told reporters after its AGM here yesterday.

“This year we will further intensify our focus on export, especially on exporting our own brand, (such as) Teapot. Teapot has entered Indonesia, and we have seen a good response,” he added.

Lim said the group’s Malaysian export business grew by 31% last year.

To date, Lim said about half of the group’s profit contribution came from overseas, adding that 40% of its revenue is contributed by its operation in Thailand.

To boost sales, Lim said the group plans to roll out a new marketing strategy to ensure greater product access to its total brands portfolio and widen its market penetration.

“This year, we are focusing on realigning our distribution network. We hope to be able to further capture the route-to-market synergies within Malaysia.

“Now a unified team 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,” he said.

Lim said the new marketing approach is expected to increase F&N’s market presence and potentially boost sales up to RM300 million in the coming years. The group is also re-evaluating its business model, optimising the number of stock keeping units in each of its product categories, while exploring just-in-time production to eliminate unnecessary costs.

Asked on the group’s prospect for its financial performance this year, Lim said it will be determined by the sugar price development for the next two quarters.

“Sugar prices development will determine the profitability of F&B player like us.”

For the financial year ended Sept 30, 2016, F&N’s net profit grew 37.6% to RM385.37 million, from RM280 million previously.