FRASER & Neave Holdings Bhd (F&N) expects sales of its soft drinks to grow by 5% at the most for the current financial year as compared with 8% previously. Chief financial officer Tony Lee told Busine…
FRASER & Neave Holdings Bhd (F&N) expects sales of its soft drinks to grow by 5% at the most for the current financial year as compared with 8% previously. Chief financial officer Tony Lee told Business Times that the company expects sales to slow down for the full financial year ending 30 September 2001 given the weak consumer sentiment as a result of the slowing economy. “There will be positive growth, but it will likely be much less than the 8%. It will probably be less than 5%,” he said in a telephone interview. Analysts estimated F&N“s sales to grow by between 1 and 4%. “It won“t be anything spectacular this year because of the slowing economy… I suppose it will just track population growth of about 3 to 4%,” said analyst Vicent Khoo of SG Securities. The soft drinks segment is F&N“s main earnings driver, having contributed some 47% to the group“s profit in the last financial year. The group has a 70% market share in the domestic carbonated soft drinks sector. It dominates the cola segment via Coca Cola (70%), the isotonic drink segment with 100Plus (over 90%) and the general carbonated soft drinks segment with its F&N Fun Flavour brands. “Last year, we saw a strong recovery. But this year, there are lots of signs that (indicate) things are slowing down,” said Lee, adding that he, however, does not anticipate a slowdown as bad as a few year ago. At its worse financial year in 1999, the company saw a year-on-year contraction of 12% in the sales volume. The following year, it saw a strong recovery and grew by 22%. Meanwhile, growth in the group“s other business segments – dairy products and glass packaging – is expected to be stagnant in the current year. As for F&N“s glass packaging business, Lee expects growth to be flat or slightly down in terms of volume as the company is producing less glass after shutting down one furnace in the Petaling Jaya plant. The group also has plants in Johor Baru and Ho Chi Minh City in Vietnam.