F&N eyes Asian growth and healthier products

Greater presence: The entrance of Siam Paragon shopping mall in Bangkok. The beverage giant is expanding its presence across the region, including Thailand and Malaysia where F&N earnings contributions are higher. — AFP

SINGAPORE: Beverage and publishing giant Fraser and Neave (F&N) plans to expand across South-East Asia, with its growing brewery business in Myanmar and its dairy distribution network in the region poised for further gains.

It also wants to continue innovating with healthier products to meet evolving consumer demands.

These plans come on the back of a satisfactory set of results for the financial year that ended Sept 30.

F&N reported a 6.7% rise in net profit to S$133.2mil, while revenue grew by 4.8% year-on-year, largely driven by the beverage segment, it said on Nov 9.

The board also recommended a final dividend of four cents a share, which will bring the total full-year dividend to 5.5%, up from five cents in 2022. This final dividend will be paid on Feb 16, 2024, pending approval.

Chief executive Hui Choon Kit told The Straits Times that “geographical diversification, product and service innovation and brand focus will be the pillars of F&N’s growth”.

“We will continue to drive our presence in markets in Asean, specifically Vietnam, Indonesia, Myanmar and Cambodia, and deploy funds (there),” he said, adding that the group still has much to do in the region to realise its full potential.

Part of its regional ambitions includes increasing F&N’s share in the growing beer consumption market in Myanmar, he said.

The firm recently completed a new brewhouse there and additional utility facilities. It is also in the process of getting another brewing licence in the northern part of the country.

“This strategic move not only reflects our confidence in the Myanmar beer market but also aligns with our commitment to expand our presence in key regions,” Hui said.

“Myanmar continues to show promising growth in the beverage sector, and this expansion positions us to tap emerging opportunities and meet the evolving demands of consumers in the region.”

The firm remains optimistic about the market despite the uncertain domestic political climate and unfavourable currency translations due to the Myanmar kyat weakening against the Singapore dollar.

An engine for the group’s growth is also its dairy business, which expanded earnings by 9% in the recent financial year.

“This was primarily driven by higher contributions from Thailand and Malaysia, propelled by price increases, even though offset by increased input costs and higher advertising and promotion expenses,” Hui said.

F&N will finish the first development phase of an integrated dairy farm in Negri Sembilan by the end of 2024.

Hui said it would strengthen the group as a leading dairy company in both Malaysia and Singapore.

“The new farm will address the insufficiency of local milk production and the long supply chains for fresh milk in Malaysia and Singapore,” he added.

It will eventually have a capacity for 20,000 milking cows and produce up to 200 million litres of fresh milk annually.

The group’s dairy business is also growing in other South-East Asian markets.

“We are optimistic about the potential of our dairy distribution business in Cambodia and Vietnam, especially Cambodia. We have established a strong presence in the canned milk segment and will be looking at growing our presence there in a more meaningful way,” he said.

But besides regional expansion, F&N is also looking to innovate its product range to provide healthier offerings to cater to an ever-changing consumer palate.

This includes launching its oatmilk product, Omilk, and 100Plus Zero, which is sugar-free and calorie-free.

Hui said: “In response to the growing health and wellness trend, we have strategically launched innovative products to align with consumer preferences. The introduction of our oatmilk product caters to the rising demand for dairy alternatives, reflecting the increasing shift towards plant-based options.

“We have also observed a noteworthy trend in Singapore, where consumers increasingly prioritise health-conscious choices.” — The Straits Times/ANN

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