Lim is seen explaining about the company’s projects at F&N’s headquarters yesterday. — Bernama photo.
KUALA LUMPUR: Fraser & Neave Holdings Bhd (F&N) will invest RM210 million in a new warehouse facility in Shah Alam and an ultra-high temperature processing (UHT) line in Kuching to meet capacity expansion and business growth projections.
Chief Executive Officer Lim Yew Hoe said the RM180 million integrated four-level warehouse facility to be built on a 0.89-hectare site within the existing Shah Alam plant, would offer a four-fold increase in storage capacity.
It will, he added, house an aseptic cold-filing Polyethylene Terephthalate (PET) line to facilitate the group’s extension into new offerings and packaging formats.
“The project will commence in the third quarter and is expected to be completed within the next 24 months,” he told a press conference after announcing the group’s half-year financial results yesterday. In operating its own warehouse, F&N Holdings would save RM10 million annually, leverage on cost efficiencies while the new aseptic cold-filing PET line would reduce PET resin packaging material by 40 per cent, resulting in more savings and smaller carbon footprint.
On the UHT line in Kuching, aimed to meet growing demand in Sabah and Sarawak, Lim said the company would invest RM30 million for the project and it was expected to be operational in October this year.
He said the projects were part of over RM300 million in capital expenditure budgeted for two years in line with its commitment to achieve lowest cost to market and be the best-in-class player in cost efficiency and productivity.
When asked on F&N Holdings’ next move to fill the revenue gap after the termination of the exclusive marketing, distribution and sale of Red Bull energy drink, Lim said the group would now bank on its new energy drink brand, Ranger.
“Currently, Ranger is still in the early stage of development and we are aware that there is a very long runway for this product…but we are taking this as a long-term project,” he said.
As for the food and beverage revenue segment, he said it grew marginally by 0.9 per cent to RM1.27 billion from RM1.26 billion in the corresponding period mainly due to the absence of contribution from Red Bull.
On outlook, Lim said consumer sentiment remained cautious as the after-effects of the one-year old Goods and Services Tax implementation appeared to be prolonged.
However, he said the F&N brand was at an advantage considering the diversity of its products, as well as, its affordable price. — Bernama