F&N raises funds for food and beverage growth / Singapore

12/12/2006 - Singapore conglomerate Fraser and Neave has sold a 14.9 per cent stake in the group to raise funds for expansion of its food and beverage business.

The group raised approximately S$900 million (€443m) in a share sale to state-owned investor Temasek holdings, it announced on Friday.

F&N chief executive Dr Han Cheng Fong said Temasek's participation would "strengthen the growth potential of F&N's food and beverage business" .

"We have well-known brands in the Asia Pacific such as Tiger, F&N, 100Plus, Ice Mountain, Magnolia and Nutrisoy, all of which have great potential to grow beyond their existing markets," he said.

The group is also looking to acquire brands and businesses in the region to increase its presence in the food and beverage sector. In October it signed a RM310 million (€67.2m) deal with Nestlé for the rights to produce and sell the Swiss group's liquid milk products in south-east Asia.

That deal will more than double current annual turnover at F&N's dairy operations to more than RM1.5 billion, and give it significant economies of scale to reduce the impact of high raw material costs.

"We really want to see a more balanced portfolio. We see the opportunities in food and beverage and we hope to make more acquisitions in areas such as beer, milk and soft drinks," Dr Cheng Fong told a media briefing.

Temasek said in a statement that its acquisition of 205.5 million shares in F&N was its "most substantial" investment in the food and beverage sector in recent years.

F&N earned a net profit of S$432 million during 2005/06, up 15 per cent from a year ago with sales up 8.8 per cent to S$3.8 billion. Brewing and properties were largely responsible for the growth however as weak consumer demand hit soft drinks sales in Malaysia.

Source: ap-foodtechnology.com / By Dominique Patton