F&N Pursues Sustainable Growth In The Midst Of Pandemic


Kuala Lumpur, 19 January 2021 – Fraser & Neave Holdings Bhd (“F&NHB” or “the Group”) is set to establish Halal food as the Group’s new pillar of growth following the acquisition of three food & beverage (F&B) companies — Sri Nona Food Industries Sdn Bhd, Sri Nona Industries Sdn Bhd and Lee Shun Hing Sauce Industries Sdn Bhd — for up to RM60 million. The investment will enable F&NHB to add an established Malaysian household food brand to the Group’s portfolio of renowned brands.

Shareholders of F&NHB supported the strategies presented by F&NHB’s Board of Directors and Management for sustainable growth at the Group’s 59th Annual General Meeting (AGM) held virtually today, to realise its ambition of becoming a leading total F&B company in the ASEAN region.

F&NHB Chief Executive Officer, Lim Yew Hoe said that the Group is constantly exploring ways to ‘reimagine’ its business through organic growth and business synergies to ensure a more sustainable future.

“Our latest investment will serve as a platform to expand into more halal food segments and to meet the rising demand for convenience and ready-to-eat food products. With our robust R&D capabilities, we are confident that the new acquisitions will help us grow our halal food categories, complement our offerings, introduce more innovative products and increase our profit margin in the long run,” said Lim during the AGM.

Sri Nona is best known for its flagship product, the NONA Ketupat (rice cakes) range, which is the number one ketupat brand in Malaysia, and its range of oyster sauce, which is among the top three in its category.

In view of the movement restrictions and changes in consumer buying behaviour, F&NHB has sharpened its route-to-market and channel strategies to get closer to its consumers by meeting their needs and expectations.

Having scaled up its e-commerce operations in 2020 to tap into the exponential growth in this channel, F&NHB continues to explore different order fulfilment options to strengthen its competitive edge.

“We have recently opened F&N Life’s fulfilment centre in Kuala Lumpur, which provides more choices to consumers such as self-pickup options and express next day deliveries for our online shoppers. In the future, we aim to set up more F&N Life fulfilment centres throughout Malaysia to create a seamless consumer experience,” Lim added.

F&NHB concluded its financial year ended September 30, 2020 (“FY2020”) with a resilient performance sustained by stronger performance in the first quarter and recovery in the fourth quarter and robust exports. The Group recorded a revenue of RM3.99 billion for FY2020 while maintaining profit after tax at RM410.1 million despite the COVID-19 pandemic and commodity price pressures.

Food & Beverages Thailand (F&B Thailand) continued to contribute strongly despite unfavourable circumstances due to COVID-19 and the ensuing emergency decree, delivering over 70 per cent of the Group’s bottomline in FY2020. Although the situation in Thailand remains fluid, F&NHB believes that its Thai business will continue to demonstrate resilience and agility in FY2021 to support the Group’s strategies moving forward.

Lim said that managing COVID-19 had enhanced the Group’s state of preparedness to safeguard its business and people’s well-being in times of uncertainties.

“Since the earliest stages of COVID-19, we have been working closely with local authorities and business partners to respond to additional needs from the pandemic. We continue to focus on caring for the health and well-being of our people so that they will have peace of mind, ensuring business continuity to meet consumer needs, and supporting communities in the areas that we operate in with various kinds of assistance,” he said.

F&NHB has positioned itself to sustain its growth by investing in various initiatives to drive innovation and business sustainability. The Group has committed RM30 million to fund renewable energy programmes including the 10MWp solar roof project at its Shah Alam, Pulau Indah and Bentong plants.

Besides that, three ongoing capital expenditure (CAPEX) projects are expected to be completed in FY2021, namely a RM182 million integrated warehouse in Shah Alam which is equipped with an Automated Storage Retrieval System (ASRS), a 20,000-square metre Regional Distribution Centre (RDC) in Rojana to be fitted with a RM40 million ASRS, and a RM20 million 200 bpm drinking water line and warehouse at the Kota Kinabalu Park (KKIP) in Sabah.

Despite uncertainties, F&NHB’s investments for the future are testament to the Group’s commitment to growing its business responsibly for the future. “We are in the business for the long run and believe in our long-term market potential. Therefore, we are continuously identifying opportunities to advance business performance and profit regardless of the challenges ahead,”  Lim said.

Commenting on F&NHB’s outlook into FY2021, Lim said that F&NHB remains cautious of the local and global uncertainties due to COVID-19. “Maintaining business as usual as efficiently as  possible in a fluid operating environment while taking care of our people and the community, remains our top priority.”

“As we enter another challenging year, we have identified various opportunities to fuel growth and cost efficiency, driven by our three strategic priorities, namely Innovation, Cost Competitiveness and Excellence in Execution. We are confident that our knowledge, skills, expertise, capabilities, resources and commitment will continue to steer us to achieve our goals in these unprecedented times,” Lim added.

Shareholders at the AGM approved a final single-tier dividend of 33.0 sen per share (2019: 33.0 sen per share), amounting to 60.0 sen per share (2019: 60.0 sen per share) payable to shareholders on February 5, 2021. The entitlement date of the dividend is January 21, 2021.