Saturday November 13, 2010F&N's new CEO set to take firm to next stage of evolutionIt has been involved in several corporate exercises aimed at transforming the group into a major regional food and beverage player.In May, F&N sold its entire stake in Malaya Glass Products Sdn Bhd to Berli Jucker Public Co and ACI International Pty Ltd for US$221.7mil (about RM710.8mil) cash.Then the group acquired a 23.08% stake, or 39.6 million shares, in Cocoaland Holdings Bhd for RM54.6mil cash, or RM1.38 per share in August.In the same month, F&N appointed Datuk Ng Jui Sia as the company's new chief executive officer to replace Tan Ang Meng who was up for retirement.Ng is a veteran in the Fraser and Neave Ltd, which owns a 57.4% stake in F&N, having joined the group in 1995.He is also very familiar with the Malaysian operations as he was managing director of F&N Coca-Cola (M) Sdn Bhd from 1999 to 2006."Our next strategy is to think about building a food pillar. Hence, the investment in snack food company Cocoaland Holdings Bhd." Datuk Ng Jui Sia ... ‘In five years, F&N will become a different animal.' The aim is for F&N to become a successful regional food and beverage company.As part of its evolution process, F&N made the decision to sell the glass business to unlock value in the investment."This provides us with tremendous opportunity to optimise the capital and return money back to shareholders as well as look for investments with better yields.F&N is also looking to fill the segment gap which will result from the expiry of The Coca-Cola Co's bottling and distribution agreement on Sept 30, 2011."In future, the gap will be filled by our own brands or other brands that appreciate the excellent marketing and distribution channel that we can provide for an instant foray into the domestic market," Ng says.F&N has already started the ball rolling by developing and launching new products. Ng says the focus will be on the ready-to-drink tea, juice, energy and water categories.Moreover, in February, the group announced that it had clinched an exclusive deal to sell and distribute Red Bull energy drinks in Malaysia.Ng says Japan's leading food and beverage company Kirin Holdings, one of Fraser and Neave group's investors, can also make use of its marketing and distribution channel."Our strategy to fill the gap is to have more of our own brands. We are also open to distribute other brands," he adds.Another strategy is to go regional."We want to go regional for all our businesses – to Asean and even the Middle East as all our products are halal.Ng says the group is intensifying dairy exports out of Thailand into Indochina – Laos, Myanmar, Cambodia and Vietnam.The group acquired Nestle's canned milk business in Thailand in 2006 and has dairy manufacturing facilities in Rojana that commenced commercial production early this year.The Rojana plants has a capacity of some 10 million cartons of milk.F&N is also aggressively looking for sizeable snack food companies in the Asean region to acquire in order to build up its business in the food segment.On the homefront, the group's RM350mil plant in Pulau Indah is expected to be ready in mid-2011 to cater for domestic and overseas demand. The plant will boost capacity to 15 million cartons from the present 11 million cartons .This will result in the full relocation of its existing dairies production in Petaling Jaya's Section 13 to Pulau Indah.For the financial year ended Sept 30, 2010, the group's profit after tax (excluding the gain of divestment of the glass operations) rose 48.6% to RM307mil versus RM206.5mil in 2009.Revenue grew 11.2% to RM3.6bil compared with RM3.3bil.The divestment of the glass operations resulted in a gain of RM382mil.
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