F&N to pour $70m into business growth in Malaysia

An artist's impression of F&N's new state-of-the-art cold-filling PET bottle facility. It will be built on an existing site within F&N's current Shah Alam plant.
An artist's impression of F&N's new state-of-the-art cold-filling PET bottle facility. It will be built on an existing site within F&N's current Shah Alam plant.PHOTO: F&N

Singapore beverage firm Fraser & Neave (F&N) is investing more than $70 million in Malaysia to expand capacity for business growth, the company said yesterday .

It will do so through F&N Holdings (F&NHB), its 55.5 per cent held Malaysia-based subsidiary.

The projects are part of F&NHB's $102 million capital spending committed over two years in Malaysia to extend product offerings and packaging formats, and to stay competitive in one of its core markets.

The moves include a state-of-the-art aseptic cold-filling polyethylene terephthalate (PET) bottle line, a four-storey integrated warehouse and an ultra-high temperature processing (UHT) line.

Some $61 million will go towards the PET bottle line and a new four-storey facility to house it.

The other $10 million will go to development of the UHT line which will be at F&N's existing soft drinks plant in Kuching, Sarawak.

The PET bottle line will "reduce PET resin packaging material by 40 per cent" according to the firm, thereby reducing its carbon footprint and packaging costs.

The facility will be built on a 0.9 ha site within F&N's existing soft drinks plant in Shah Alam, Selangor.

The company operates five plants in Malaysia and the two new lines will "power F&N's expansion into new offerings and packaging formats to fulfil market demand".

"This capacity expansion will allow the group to fulfil anticipated growth and demand for healthier drinks in the medium to long term," said Mr Lee Meng Tat, F&N chief executive for non-alcoholic beverages. F&N's healthier range includes its ready-to-drink tea and soya products.

The projects will boost F&NHB's total asset value in Malaysia to RM 1.9 billion (S$640 million).

Mr Lee said that the investments emphasise the importance of Malaysia as one of F&N's core markets and reflect the firm's confidence in its brands' growth potential, as well as the long-term economic growth of the country.

Once complete, the PET bottle and UHT lines will boost production capacity by 6.5 million and 3.4 million cases per year respectively.

A version of this article appeared in the print edition of The Straits Times on May 06, 2016, with the headline 'F&N to pour $70m into business growth in Malaysia'. Print Edition | Subscribe