Quick thinking by the crisis management team has ensured the continued safety of employees, a quick recovery turnaround and minimised disruption to customers
By TMR / Pic by MUHD AMIN NAHARUL
FRASER & Neave Holdings Bhd (F&N) estimates the flash flood that hit its Shah Alam, Selangor, plant recently to have damaged about RM40 million worth of finished goods, raw materials and packaging materials.
F&N 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 minimised 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 annual general meeting on Monday.
He added that market conditions during financial year 2022 (FY2022) continue to be tough due to the lingering Covid-19 pandemic and commodity prices that are expected to rise further.
Lim said the group would prioritise improving and managing costs, particularly its cost of goods sold.
This will include reviewing trade expenditure; strategic capital expenditure (capex) investment to extract efficiency; and smart procurement to obtain better value. Lim noted F&N will also leverage on 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 the acquisition of Sri Nona Industries Sdn Bhd, the new company has made its maiden positive contribution to FY2021.
F&N foresees the Sri Nona brand has much more potential to be realised, especially in meeting the rising demand for convenient and ready-to-eat food products.
Exports will remain a key focus for its Food & Beverage Malaysia and Food & Beverage Thailand business in FY2022.
Strong export growth contributed close to RM900 million or 21.7% of F&N’s revenue in FY2021, fuelled by significant progress in Indochina, Greater China, the Middle East and Africa.
F&N’s revenue grew by 3.6% yearon-year for FY2021 despite being in a full Covid-19 pandemic year.
Several capex projects will be operational in 2022, such as the new integrated warehouse building in Shah Alam, which features automatic storage and retrieval system, which Lim noted will reduce operating costs and shorten delivery lead times.
The 10 Mega Watt peak rooftop solar photovoltaic systems being installed at three plants in Malaysia (Shah Alam; Pulau Indah, Selangor; Bentong, Pahang) which will result in RM3 to RM4 million savings in energy costs, including the new fully-integrated regional distribution centre in Rojana, Thailand.
These facilities are part of the group’s goals to uplift its operational and cost efficiencies while reducing its carbon footprint.
F&N 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 mergers and acquisition opportunities and pursuing its ambitions in dairy farming, Lim added.