Malaysia“s Fraser & Neave Holdings Bhd (F&N), which is sitting on cash reserves of MYR 225.36 million, plans to invest MYR 24.50 million in a glass manufacturing plant in Thailand as it seeks to expa…
Malaysia“s Fraser & Neave Holdings Bhd (F&N), which is sitting on cash reserves of MYR 225.36 million, plans to invest MYR 24.50 million in a glass manufacturing plant in Thailand as it seeks to expand its regional business. F&N chief financial officer Tony Lee said on 6 May 2005 that the MYR 24.50 million was for a 70% stake in the plant, which would be about 84km from Bangkok. “We are awaiting approval from the Thai government,” he said at a media briefing on the firm“s 1H results ended 31 March 2005. He added that part of the funds to finance the plant would come from the firm“s “war chest”. F&N reported earnings of MYR 66.11 million for the 1H 2005, up 10.6% from MYR 59.75 million in the previous year period. Revenue was MYR 972.68 million, also up 10.6% from MYR 879.66 million a year earlier. Lee said F&N expected its 60%-owned China glass manufacturing plant, which registered MYR 7 million losses in the financial year ended 30 September 2004, to turn around by late 2006. F&N“s stake is USD 16.80 million (MYR 63.84 million). The plant, which is 80km from Chengdu, started working at full capacity of 120,000 tonnes annually earlier in 2005, he said. The joint-venture plant posted losses earlier as it was operating at only 60% capacity because of a lack of contracts. Lee said F&N was looking at overseas operations to raise its earnings from glass operations as the firm already has 90% of the Malaysian market. Glass packaging operations accounted for MYR 144.70 million of the total revenue of MYR 972.68 million in the 1H ended 31 March 2005, up 4.6% from MYR 138.20 million in the previous corresponding period. Lee also expected full contributions from the glass making plants in Johor Baru and Vietnam after furnace rebuilds. The plants were shut down for three to four months in 2004. In terms of operating profit, glass packaging accounted for MYR 10.50 million for the 1H, up 17.7% from the MYR 8.90 million a year ago. The other major contributors to F&N“s revenue of MYR 972.70 million in the 1H 2005 were soft drinks (MYR 551.26 million), dairy products (MYR 270.16 million), property (MYR 6.40 million) and others (MYR 180,000). Lee added that F&N expected to benefit from the positive economic outlook, with gross domestic product forecast to grow between 5% and 6% in 2005, and positive consumer sentiment.