Fraser & Neave allocates RM450m capex for 2020

06 Nov 2019 / 13:19 H.

KUALA LUMPUR: Food and beverages company, Fraser & Neave Holdings Bhd is allocating RM450 million for capital expenditure (capex) in 2020, said chief executive officer Lim Yew Hoe.

The allocation was a substantial increase compared with just RM30 million in capex for 2019.

“We will use it for land acquisition (in Chuping) worth RM156 million, integrated warehouse in Shah Alam (RM180 million), investment in Thailand and others,“ he told reporters after a briefing on the company’s 2019 financial results here today.

In the financial year ended Sept 30, 2019, F&N recorded a 5.3 per cent growth in revenue to RM4.08 billion from RM3.87 billion recorded in 2018.

The group also achieved its highest-ever profit before tax of RM533 million, a 25.7 per cent hike from RM424.1 million in 2018.

Going forward, Lim said the overall domestic F&B market would remain challenging amidst the continuous competitive pressures in the canned milk and the ready-to-drink beverage segments.

He expects, new product launches with strong innovations, such as the juice drink and teapot tube, would drive next year’s growth with a contribution of one third.

As for Thailand’s market, he foresees operation in the neighbouring country to remain positive given the strong brand equity and product portfolio, supported by the group’s pipeline of innovative products.

“We believe the strong foundation that we have laid in the past and the investment in brand spending and new product launches in the fourth quarter of 2019 will continue to drive our growth in F&B Thailand,“ he said.

On export, Lim said the group is targeting to secure export revenue of RM800 million next year, an increase of between 17-18 per cent compared with 2019.

About RM100 million of the export revenue is expected to come from the Middle East and North Africa region, following the establishment of its office in Dubai, the United Arab Emirates which is likely be completed in the first quarter of next year, he said.

On its mega-dairy farm project in Chuping, Lim hoped to get the regulatory approval in the next six month for its 4,454-ha leasehold land acquisition in the northern state.

The project to be implemented in two phases with a total investment of RM850 million would be financed by a mixture of internal fund, bank facilities and commercial papers.

The farm, designed to produce a total of 200 million litres of fresh milk annually would transform Malaysia into an exporter of fresh milk. - Bernama

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