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Halal food to become F&N’s new pillar of growth

Halal food to become F&N’s new pillar of growth

19 Jan 2021

Fraser & Neave Holdings Bhd (F&N) is set to establish halal food as the group’s new pillar of growth following the acquisition of three food & beverage (F&B) companies for up to RM60 million. 

The three companies are Sri Nona Food Industries Sdn Bhd, Sri Nona Industries Sdn Bhd and Lee Shun Hing Sauce Industries Sdn Bhd.

In a statement released to Bursa Malaysia today, F&N said the investments would enable the group to add an established Malaysian household food brand to its portfolio of renowned brands.

F&N shareholders supported the strategies presented at the group’s 59th annual general meeting (AGM) held virtually today, in the company’s bid to realise its ambition of becoming a leading total F&B company in the ASEAN region.

F&N chief executive officer Lim Yew Hoe said that it 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 research and development capabilities, we are confident that the new acquisitions will help us grow our halal food categories, introduce more innovative products and increase our profit margin in the long run,” said he during the AGM.

In view of the movement restrictions and changes in consumer buying behaviour, F&N has also scaled up its e-commerce operations in 2020.

Lim said the group has recently opened F&N Life’s fulfilment centre in Kuala Lumpur which provides more choices to consumers such as self-pickup option and express next-day deliveries for online shoppers. 

In its financial year ended Sept 30, 2020 (FY20), the group achieved a resilient performance sustained by a stronger performance in the first quarter and recovery in the fourth quarter and robust exports. 

Revenue stood at RM3.99 billion for FY20 while profit after tax was maintained at RM410.1 million, despite the COVID-19 pandemic and commodity price pressures.

Food & Beverages Thailand continued to contribute strongly despite circumstances due to COVID-19 and the ensuing emergency decree, delivering over 70 per cent of the group’s bottom line in FY20. 

The group believed its Thai business will continue to demonstrate resilience and agility in FY21 to support the group’s strategies moving forward.

Lim said the company has also positioned itself to sustain growth by investing in various initiatives to drive innovation and business sustainability.

F&N 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, three ongoing capital expenditure projects are expected to be completed in FY21.

These are the 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 in Rojana, Thailand, to be fitted with a RM40 million ASRS, and a RM20 million 200-bottle per minute drinking water line and warehouse at the Kota Kinabalu Park  in Sabah.

On F&N’s outlook for FY21, Lim said that it remained cautious of the local and global uncertainties due to COVID-19. 

“As we enter another challenging year, our knowledge, skills, expertise, capabilities, resources, and commitment will continue to steer us to achieve our goals in these unprecedented times,” he added.

At the AGM, shareholders approved a final single-tier dividend of 33.0 sen per share, bringing total dividend to 60.0 sen per share in FY20 (FY19: 60.0 sen per share) payable to shareholders on Feb 5, 2021.

The entitlement date of the dividend is Jan 21, 2021.

Source: Bernama