F&N Celebrates 140th Anniversary, Building for the Future

Fraser & Neave Holdings Bhd (“F&NHB” or “the Group”) held its 62nd Annual General Meeting today. In a presentation to shareholders on behalf of the board and management, F&NHB Chief Executive Officer Lim Yew Hoe highlighted the Group’s financial results and other positive developments in FY2023. Both Food & Beverages Malaysia (F&B Malaysia) and Food & Beverages Thailand (F&B Thailand) contributed substantially to stronger operating profit.

“Despite higher input costs and rising energy expenses, the Group recorded a 37.6% higher profit before tax attributable to a concerted focus on margin improvement, operational excellence, supply chain management and sustainability initiative, supported by higher revenue which increased by 11.9% to RM5 billion,” said Lim.

During the AGM, Suchit Riewcharoon, Managing Director of F&N Dairies Thailand, also provided insights into F&B Thailand’s performance and strategic initiatives on sustaining market leadership.

F&B Thailand recorded better performance year-on-year, aided by improved consumer sentiment and a pick-up in tourism. Amidst high commodity prices and a shortage of milk, F&B Thailand maintained market leadership in the sweetened condensed milk and evaporated milk categories in Thailand through focused route-to-market strategies and in-store execution, along with consistency in brand building and consumer engagement.

Shareholders were also positive about the Group’s direction, as Lim shared how major capital expenditure (capex) projects play key strategic roles in future-proofing the business and capturing new opportunities.

In F&B Malaysia, the Group is confident with its prospects moving forward, particularly its strategy to build up Halal Packaged Foods and Dairy as the next growth pillars in the midterm.

“Halal Packaged Food remains a core pillar of the business and is aligned with our commitment to cater to diverse consumer needs.” Lim added that plans are underway to integrate the Group’s two latest businesses, Cocoaland and Sri Nona, with F&N for better operational and commercial strategies. Cocoaland’s strength as a confectioner complements Sri Nona’s Halal food products. Further, brands from both businesses can leverage the Group’s well-established route-to-market both locally and internationally.

“Cocoaland’s factory in Rawang will be established as our food manufacturing hub in line with our plans to consolidate the manufacturing of our entire food business. The goal is to increase production capacity while reducing complexity,” Lim explained.

The groundbreaking of the Group’s dairy farm in Ladang Permai Damai on 15 June 2023 marked F&NHB’s progress towards meeting its Phase 1 completion by early 2025 when the first milking is expected to begin. Land clearing work began in October 2023 and is expected to take 13 months to complete. The integrated farm will feature a milk processing facility capable of producing 100 million litres of fresh milk yearly for local and international markets. This will reduce the Group’s reliance on imported milk, foster the growth of the local agricultural industry, and contribute to food security in Malaysia.

In Thailand, the new Wang Muang plant and regional distribution centres are already yielding positive results. Lim said, “Wang Muang liquid milk factory is crucial for increasing fresh milk production in line with growing demand and our Group’s commitment to nutrition through healthier choices in our portfolio. The introduction of TEAPOT Extra Evaporated Milk, packaged in a 1L UHT Prisma design with a cap, has proven to be a success, providing enhanced convenience and value to our customers.”

The Group will capitalise on the return of international tourists and out-of-home consumption post-pandemic. “As we continue to meet the needs of our customers and consumers, we also want to improve penetration drive into more rural retailers by leveraging on the digital wallet initiative proposed by the new Thai government, whereby all Thais aged 16 and above get 10,000 baht, planned in May,” Lim said.

Meanwhile, the Group will continue to strengthen its existing brands and innovate more products to cater to market demand in Malaysia, Thailand, and overseas markets.

“While commodity price fluctuations and inflationary pressures on consumer demand remain present, regardless of the market environment, we remain resolute in our long-term strategies focused on delivering cost efficiency and identifying new market opportunities,” he continued.

“Although the coming financial year is likely to remain volatile due to ongoing geopolitical issues, we are confident of navigating future uncertainties,” Lim said.

F&NHB Chairman Y.A.M. Tengku Syed Badarudin Jamalullail, reflecting on F&N’s 140-year legacy, said, “As we celebrate our heritage, we are also excited for the years ahead, embracing an era of growth and transformation. As we ramp up efforts to build up Halal Packaged Food and Dairy pillars, we will continue to focus on the core of our business to deliver Pure Enjoyment, Pure Goodness to our stakeholders.”

In 2023, the Group received the PwC Malaysia’s Building Trust Awards 2023 in the FBM Mid 70 Index category and won the gold award at The Edge Malaysia ESG Awards 2023 in the consumer products and services sector for the second consecutive year. F&NHB’s robust ESG platform also placed the Group in the Top 1% within the global FTSE Industry Classification Benchmark Supersector. “These recognitions reflect our commitment towards greater social and environmental well-being,” Y.A.M. Tengku Syed Badarudin added.

During the AGM, Y.A.M. Tengku Syed Badarudin also announced the passing of Dato’ Jorgen Bornhoft, F&N’s former Non-Independent, Non-Executive Director. Dato’ Bornhoft had served on the board of F&NHB for nine years and eight months before resigning in 2023.

Shareholders at the AGM approved a final single-tier dividend of 33.0 sen per share (2022: 33.0 sen per share) and an additional special dividend of 17.0 sen per share to commemorate the Group’s 140th anniversary. The total dividend for the year amounted to 77.0 sen per share (2022: 60.0 sen per share), bringing the total dividend payout for FY2023 to RM282.4 million (2022: RM220.1 million), which is 28.3% higher than FY2022.