BUSINESS

F&N allocates up to RM800 mln capex for FY2023

09/11/2022 03:16 PM

KUALA LUMPUR, Nov 9 (Bernama) -- Food and beverage company Fraser and Neave Holdings Bhd (F&N) is allocating between RM700 million and RM800 million for capital expenditure (Capex) in the financial year ending Sept 30, 2023 (FY2023), mainly for its dairy farm project in Gemas, Negeri Sembilan.

Group finance director Tiong Yean Yau said the allocation was a substantial increase of three to four times compared with the FY2022 Capex of just RM190 million.

“As for now, we have used over RM200 million...and with the current exchange rate that is going up, those (Capex allocation of RM800 million) are our current estimates,” he told reporters after a briefing on the company’s 2022 financial results here today.

He said the major focus for FY2023 would be Cocoaland Holdings Bhd and the dairy project.

Chief executive officer Lim Yew Hoe said the group is on track with its long-term strategies to raise cost efficiency and build up its fourth business pillar, Halal Packaged Food. 

“This investment will not only add a range of established Malaysian confectionery and snack brands to the group’s portfolio but will also serve as a platform to expand into more Halal food segments and to meet the rising demand for packaged food products. 

“With the completion of Ladang Permai Damai acquisition, the group is also on track to resume its plans on the upstream fresh milk business for downstream production and distribution of fresh milk,” he said.

He said this would enable the group to own a vertical integration business and operations based on locally grown crops for feed to F&N’s dairy farm, which in turn would lower the value chain cost per litre. 

“The move will also help us be less dependent on imported milk and will help to promote the local agricultural industry,” he said.

He said despite continuing macro uncertainties, the group has an encouraging momentum of recovery in economic activity and tourism in Malaysia and Thailand. 

“Therefore, F&N will continue to drive sales for the coming festive seasons, and focused on accelerating innovation and driving operational efficiency, commercial excellence as well as fiscal discipline across value chain,” he said.

He said the group would also remain focused on exports, which served as a natural hedge to cushion the foreign exchange impact. 

“We will continue to act proactively to navigate the volatile environment and take deliberate steps to enhance our resiliency through the forward purchase of key commodities and hedging strategy,” he added.

In the financial year ended Sept 30, 2022 (FY2022), F&N recorded a 8.2 per cent growth in revenue to RM4.47 billion from RM4.13 billion recorded in FY2022. 

During the year under review, the group strengthened its Halal packaged food pillar with the acquisition of Cocoaland, which was completed on Nov 4, 2022, and became F&N’s wholly-owned subsidiary. 

-- BERNAMA


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