F&N assures no supply disruption amid flash flood impact in its Shah Alam plant

by TMR / pic by TMR FILE 

FRASER & Neave Holdings Bhd estimates flash flood impact to cost about RM40 mil in its Shah Alam Plant with the biggest item being damaged were finished goods, raw materials and packaging materials.

F&NHB CEO Lim Yew Hoe said the Group has in place a property all risk and business interruption insurance cover in respect of its operations affected by the flood. Therefore, the net impact is not expected to be significant.

“Quick thinking by the crisis management team has ensured the continued safety of employees, a quick recovery turnaround and minimise disruption to customers,

“As we have built up inventories to prepare for the upcoming festive, net impact on business has been mitigated to an extent,” he said in a statement following the group’s AGM today.

He added market conditions in FY2022 continues to be tough due to the lingering COVID-19 pandemic and commodity prices that are expected to rise further.

Lim said that the Group would prioritise improving and managing our costs, particularly our Cost of Goods Sold (COGS).

This will include reviewing trade expenditure, strategic capex investment to extract efficiency, and smart procurement to obtain better value.

The Group will also leverage its strong manufacturing capability, diversify its range of products, and refine its product mix and pricing to maximise profitability.

For the longer term, the Group remains steadfast in its strategic priorities and continues to build its fourth business pillar – Halal Packaged Food.

A year after acquisition, the Sri Nona Companies made its maiden positive contribution to FY2021.

The Group foresees that the Sri Nona brand has much more potential to be realised, especially in meeting the rising demand for convenience and ready-to-eat food products.

Exports will remain a key focus for Food & Beverage Malaysia and Food & Beverage Thailand in FY2022.

Strong export growth contributed close to RM900 million or 21.7% of the Group’s revenue in FY2021, fuelled by significant progress in Indochina, Greater China, the Middle East and Africa.

This boosted F&NHB’s positive revenue growth for FY2021, recording 3.6% year-on-year growth in a full pandemic year.

Several capex projects will be operational in 2022, such as the new integrated warehouse building in Shah Alam, which features Automatic Storage & Retrieval System (ASRS), which will reduce operating costs and shorten delivery lead times, the 10MWp rooftop Solar Photovoltaic (PV) systems being installed at 3 plants in Malaysia (Shah Alam, Pulau Indah, Bentong) which will result in RM3- 4 million savings in energy costs, and the new fully-integrated Regional Distribution Centre (RDC) in Rojana, Thailand.

These facilities are part of the Group’s goals to uplift its operational and cost efficiencies, and reduce its carbon footprint.

Meanwhile, the Group will continue to ‘reimagine’ its business through organic growth and business synergies to ensure a more sustainable future, including building new capabilities and revenue streams, looking at M&A opportunities, and pursuing its ambitions in dairy farming.