Business

Wednesday November 11, 2009

F&N plans 50 new products in two years


It aims to expand dairy products, soft drinks market share

KUALA LUMPUR: Fraser & Neave Holdings Bhd (F&N) plans to launch 50 new products in the next two to three years in efforts to expand its share of the dairy products and soft drinks markets and strengthen its brands, said chief executive officer Tan Ang Meng.

“This is also in line with our preparation for the expiry of (our agreement with) Coca-Cola in September 2011. The launch of the new products is now possible as before this, there were some restriction on us based on the agreement with Coca-Cola,” he said yesterday after a media briefing on F&N’s fiscal 2009 results.

Tan said the launch of the 50 products would be done after January and would be spread over two to three years to avoid introducing too many products in a short period of time.

Tan Ang Meng ... ‘This is also in line with our preparation for the expiry of (our agreement with) Coca -Cola.’

“We need to adjust this according to the market demand as we don’t want the market to be too saturated apart from confusing the consumers with too many products,” he said.

Commenting on the company’s 2009 results, Tan said the group’s overall performance was commendable against the backdrop of an economic recession.

F&N posted a 76% jump in net profit to RM61.1mil in the fourth quarter ended Sept 30 compared with RM34.7mil in the previous corresponding period.

Revenue dropped 1.3% to RM908.3mil from RM921.1mil previously.

For the full year, revenue improved to RM3.74bil versus RM3.67bil while net profit rose 34.5% to RM224.4mil.

The company attributed its improved results partly to lower tax rates as it benefited from reinvestment allowance and other temporary differences.

“The increase in operating profit (full year) was also due to the strong performance of the soft drinks and dairies divisions which maintained their momentum and together chalked up an impressive 31% growth. Our soft drinks sales grew by 10.5% boosted by a stronger volume demand,” Tan said.

In the dairies division, margins improved as it successfully defended selling prices in the premium market segment and shifted its product mix to take advantage of new opportunities arising from lower input cost, he added.

On F&N’s business outlook, Tan said the company was not pessimistic despite the challenges of the economic slowdown, but acknowledged that it would not be smooth sailing.

Asked on the possibility of a withdrawal in fuel and sugar subsidies, Tan said any such move would eventually result in the additional costs being passed to consumers.


F&N : [Stock Watch] [News]


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