CEO: F&N to prioritise on improving cost of goods for short-term outlook

Fraser & Neave Holdings Bhd chief executive officer Lim Yew Hoe

KUALA LUMPUR: Fraser & Neave Holdings Bhd will prioritise on improving and managing costs particularly its cost of goods sold (COGS) for its short-term outlook, amid the tough 2022 due to the lingering COVID-19 pandemic and higher commodity prices, chief executive office Lim Yew Hoe said.

Despite this, Lim said it does not distract the beverage, dairy and food manufacturer from its strategic initiatives for a more sustainable future.

"Regardless of the short-term outlook, we remain confident on the long-term potential of our markets. The group has weathered many storms in our 139-year history and key to our longevity has been the ability to embrace short-term impact for long-term sustainability,” he said in a statement after the company’s 60th annual general meeting here today.

The short-term outlook includes reviewing trade expenditure, strategic capex investment to extract efficiency and smart procurement to obtain better value.

The group would also leverage its strong manufacturing capability, diversify its range of products and refine its product mix and pricing to maximise profitability.

For the longer term, the group remains steadfast in its strategic priorities and continues to build its fourth business pillar - Halal Packaged Food.

Meanwhile, exports would remain a key focus for food and beverage (F&B) Malaysia and F&B Thailand in financial year 2022.

For its financial year 2021, strong growth contributed close to RM900 million or 21.7 per cent of the group’s revenue, fuelled by significant progress in Indochina, China, the Middle East and Africa.

"Several capex projects will be operational in 2022, such as the new integrated warehouse building in Shah Alam, which features automatic storage and retrieval system.

"This will reduce operating costs and shorten delivery lead times, the 10MWp rooftop solar photovoltaic (PV) systems being installed at three plants in Malaysia (Shah Alam, Pulau Indah and Bentong) and help save between RM3 million and RM4 million in energy costs, and the new fully integrated regional distribution centre in Rojana, Thailand,” he said.

Lim also gave shareholders an update on the group’s Shah Alam plant, which was affected by the recent flash flood.

He said the group is currently working closely with insurers on property damage and consequential loss.

"The estimated impact is about RM40 million, with the biggest item being damaged finished goods, raw materials and packaging materials,” he said. - Bernama