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1.INTRODUCTION OF F&N HOLDING BERHAD
F&N is amongst the regions and Malaysias oldest companies and its brand enjoys the rare
distinction of being a market leader and household name in many categories. The F&N loved
brand in Malaysia, today, F&N has spread its wings to more than 20 countries worldwide and
established itself as a regional player.
From purveyors of carbonated soft drinks, the F&N Group is one of Malaysias diversified blue
chip companies with leadership of the nations beverages and dairy products. The Group has
grown from strength to strength with an annual turnover in access of RM4 billion from its core
business in the manufacture, sale and marketing of soft drinks, dairies, non-carbonated beverages
as F&N as property.
With a unique blend of quality and innovative products that have stood the test of time, the F&N
brand has resonated with Malaysians for over 128 years. The company has come a long way
since 1883 when John Fraser and David Chalmers Neave formed The Singapore Straits Aerated
Water Company. Years later, F&N was consolidated and the companys love affair with the food
and beverage industry began.
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F&N corporate milestones include, among others, the pioneering and launching of the F&N
sweetened condensed filled milk in 1973, launching of a complete range of icecream products
in 1974, the launch of 100 Plus isotonic drinks in 1984 , and the acquisition of Nestls canned
milk business in Thailand and Malaysia in 2007.
Not one to rest on their laurels, F&N continues to soar to greater heights and remains committed
to upholding the highest standards of corporate governance through integrity, transparency and
accountability. F&N also remains responsible to their employees, business partners, stakeholders
and the community; the company implements various initiatives to ensure responsible practices
are carried out in all areas of the F&N business.
In Malaysia, F&N operates under the banner of Fraser & Neave Holdings Bhd (F&NHB), which
is the Malaysian arm of Fraser And Neave, Limited. The company is listed on Bursa Malaysia
and employs over 3,000 employees in operations across Malaysia, Brunei and Thailand. Its
vision is to become the leading total Food and Beverage Company in Malaysia and the region.
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2. VISION, MISSION AND OBJECTIVE OF F&N
Vision of Fraser and Neave Holding Berhad is "To become the leading total beverage company
in Malaysia and the region"
Mission of Fraser and Neave Holding Berhad is "To be a world-class multinational enterprise
providing superior returns to F&N shareholders, excellent value for F&N customers and a
rewarding career for F&N employees"
2.1 Aims
2.1.1 To reduce the mortality in children under the age of five from simple causes such as
dehydration from diarrhoea
2.1.2 To improve mothers health and their knowledge of health issues2.1.3 To reduce the prevalence of HIV/AIDS, Malaria and other diseases
2.2 Current Objectives
We work to a set of SMART (measurable) objectives. Our objectives are reviewed regularly. Our
current objectives are available on request.
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3. F&N STRATEGIC APPROACH
F&N's role as the parent company and entrepreneurial shareholder of F&N businesses will
remain unchanged: F&N will play a proactive and pivotal role, on the respective boards and
board committees, in charting the strategic directions of the individual businesses, identifying
and creating new opportunities of growth for F&N subsidiaries, and leveraging F&N
foundations, strengths and networks to steer the Group to even greater heights.
The strategy for growth for the three businesses is clear. Given Singapore's small domestic
market, growth for the Group can only be achieved by extracting operating efficiencies,
expanding into new markets and venturing into new businesses - measures that have been
actively pursued by F&N. Continuing to drive shareholder value, the Group targets the
following:
Re-deployment of assets to higher-yielding activities to focus on asset-light, fee-based
businesses;
Effective capital management to improve returns to shareholders; Expand and grow core businesses through intra-market growth, expansion to new
markets and new synergistic ventures; and
Balance existing business portfolio by increasing contribution from Food & Beverageand Publishing & Printing businesses.
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4. F&N STRATEGIC DIRECTION
4.1 Strengthen and Grow the Core
Maximize synergies and grow organically to secure market leadership positions.
4.2 Build and Expand the Core
Seek inorganic growth through strategic mergers, acquisitions and alliances that leverage on the
Group core competencies.
4.3 Develop and Expand into New Markets
expand geographically to tap new F&N of growth and to achieve better market diversification.
4.4 Build and Leverage on Brand Equity
Invest in a strong portfolio of internationally- recognized brands, supported by product
innovations and quality improvements.
4.5 Improve Earnings Yield and Performances
Manage capital allocation to maximize returns and maintain a policy of improved payouts for
shareholders.
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5. F&N HERITAGE
The F&N Group has been present in the region since 1883. Few other companies in the region
can boast a mercantile heritage over two centuries during which it has earned an unflagging
reputation with all stakeholders for stringent business ethics, high standards of corporate
governance and product integrity. Nor can many of the regions companies boast a similarly
enduring branding heritage (both corporate and product) throughout such a long jF&Nney.
Today, the F&N Group consists of mostly wholly-owned core businesses in Malaysia in soft
drinks, dairies and properties. In terms of business split, the soft drinks division has historically
contributed about 50 per cent of Group revenue/profit whilst the other 50 per cent is shared
between the dairies and glass divisions. However for the 08/09 financial year, operating profit of
the dairies division surged 59 per cent over the previous year, elevating it as a key contributor on
par with the soft drinks division. Property development emerged only in the 2004-2005 financial
year as a new contributor to the Groups bottom line.
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6. F&N PRODUCT AND BUSINESS BRAND
Over the years, the brands in F&Ns stable have continued to grow from strength to strength.
F&N divisions have worked aggressively to deliver on the respective brand promises through
bringing F&N customers consistent and memorable brand experiences. F&Ns underlying
commitment to innovation, quality and excellence undoubtedly enabled the brands in F&N stable
to F&N rather the challenges of the marketplace as F&N as forge ahead in their respective
market segments. Please navigate to one of the brand categories such as soft drink, dairy
products and property.
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7. F&N SOFTT DRINK
Some 128 years ago, the F&N brand first made its appearance in the form of an aerated water
product. Today, the beverage brands under the umbrella of the F&N Group have become the
preferred thirst quenchers for countless generations of Malaysians. F&N multiple brands are
leaders in most of their respective segments and offer consumers the countrys most
comprehensive range of soft drinks, catering to every occasion. F&N stable of brands have come
to epitomize the virtues of quality, fair pricing, universal availability, and, above all, the
celebration of life.
F&N Beverages Marketing Sdn Bhd is Malaysias largest soft drinks manufacturer and
distributor. The company operates of F&N manufacturing plants nationwide, including its state-
of-the-art facility at its headquarters in Shah Alam, Selangor. FNBM distributes F&N products
comprising 100PLUS, F&N Fun Flavors, F&N Originals, SEASONS and Fruit Tree. It also
bottles and supplies Coca - Cola products in Malaysia.
Currently, the company together with its manufacturing arm, F&N Beverages Manufacturing
Sdn Bhd, has a total workforce of about 1,400 employees in 23 offices throughout the country
The company commenced operations in 1936 when F&N Ltd secured the franchise of Coca-Cola
in Singapore and Malaysia. F&N Coca-Cola (M) Sdn Bhd (F&NCC) was born as a result of this
and subsequently in January 2010, following the announcement that the licensee agreements
would end in September 2011, the company was renamed F&NBM. Today, it is Malaysias
largest soft drinks manufacturer and distributor.
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In Malaysia, FNBMs soft drinks portfolio is dominated by 100PLUS, F&N Fun F lavors,
SEASONS and Fruit Tree. 100PLUS is a notable local success story, commanding over 90
percent share of the isotonic drinks market, while also the No. 1 ready-to-drink (RTD) brand in
Malaysia. Its F&N branded soft drinks is the leading player in the fruit flavored carbonated soft
drinks segment in Malaysia. Meanwhile, under the divisions non-carbonated portfolio,
SEASONS is currently the number two player in the Asian drinks category while Fruit Tree
continues to experience growth within the juice segment.
The division continues to perform F&N during the festive periods with its products being a
mainstay for all observances and occasions. It continues to pursue world-class excellence in
distribution to make its products more readily available, with greater emphasis on market
execution and increased efforts in training, including in expanding, imploring and building
capability of the sales force across the board.
Over the years, FNBM has implemented several strategic measures that emphasize its strong
brand presence as F&N as invest heavily in advertising and promotions, product availability and
operational efficiency. F&N also understand that consumers are always on the lookout for high
quality products and excellent services. In line with F&Ns food and beverage corporate identity,
FNBM promises to offer healthy enjoyment in exciting ways. As such, the company is F&N
poised to surge ahead in its drive to respond to market trends, meet changing consumer needs
and exceed consumer expectations by providing quality products based on the best
manufacturing practices to repay consumers support and confidence in the brand throughout the
years.
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With dedication, commitment and good teamwork, the company is confident it will continue to
grow and its brands will continue to prosper. FNBM invites consumers to join them for the ride.
Some of F&N brand product that is under F&N production is fun flavors, 100 plus, seasons, coca
cola and fruit tree.
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8. F&N DAIRY PRODUCT
Almost every Malaysian has had a taste of F&N while growing up. Be it the F&N sweetened
condensed milk, evaporated milk, paste upraised milk, UHT milk, juice or ice cream. Recently,
F&N added in yogurt and yogurt drinks. And as Malaysia grew, so did the company now known
as F&N Dairies (Malaysia) Sdn Bhd.
F&N's dairy business grew out of a joint venture with Beatrice Foods of Chicago, USA in 1959
with the construction of Southeast Asias first F&N sweetened condensed milk plant in Petaling
Jaya, Malaysia. The Carnation Company, also from the US, joined the partnership in 1965 to
form Premier Milk as the manufacturing arm. This partnership proved enterprising as within that
year, the highly successful Evaporated Milk was launched.
Not a company to rest on their laurels, the Group constantly seeks product innovation and
invention, which resulted in more products added to its admirable business portfolio. In a
strategic move in the market arena, the Group embarked on its first step toward a successful
journey of F&N into the ice cream business.
In 1989, the Group acquired the interests of Beatrice Foods and restructured its dairy operations
under F&N Dairies (Malaysia) Sdn Bhd. It was expanded further with the acquisition of
Magnolia in 1995. In 1998, the Group commenced its paste upraised business.
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In 2008, F&N Dairies launched a LIVE, its new lifestyle F&B brand consisting of yoghurt, snack
bars and cereal. A large part of the companys successful run is due to its continued emphasis on
a culture of "Execution with a Difference" that focused on a seamless link of three core elements
- people, strategy and processes.
F&Ns dairies division has a vision of being Malaysias leading dairy and food marketer with
world-class products, standards and capabilities forming part and parcel of its offerings. The
many brands under the umbrella of F&N Dairies - F&N sweetened Condensed Milk, the
Magnolia, Daisy and Farmhouse brands of paste upraised milk, the Fruit Tree Fresh and Sunkist
paste upraised juices, as F&N as Magnolia ice creamare the embodiment of this vision as F&N
as the F&N Groups values of innovation, family values and integrity.
In 2011, F&N Dairies (Malaysia) dispose of its entire ice cream business to F&N Creameries
(M) Sdn Bhd, an indirect wholly-owned subsidiary of Fraser and Neave, Limited (F &NL) as
part of the overall consolidation process undertaken by F&NL for its ice cream business.
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9. A BRIEF OVERVIEW OF F&N PROPERTIES SDN BHD
The property divisions F&N-branded development projects continued to generate strong market
demand and garner wide recognition for their innovative concepts. Projects like Fraser Business
Park with its novel ICT-centric theme and complementary infrastructure are a fitting expression
of the divisions capacity to formulate winning marketing strategies.
FN Properties is a business unit of Fraser & Neave Holdings Berhad, formed to unlock the value
of land acquired and held by the company for many years. F&N first foray, the former F&N
factory land at Jalan Foss, has been developed into a vibrant commercial spot today called the
Fraser Business Park.
F&N development follows the general direction of Fraser & Neaves underlying philosophy of a
socially responsible corporate citizen. F&N key value lies within the emphasis of continuously
creating innovative designs and applications towards F&N development, giving its occupants a
taste of the modern and the future alike.
As F&N continuously strive to bring innovative development to the forefront, F&N experienced
a moment of proud achievement with the ASEAN Outstanding Engineering Award presented to
us by the ASEAN Federation of Engineering Organization (AFEO) for Zone at Fraser Business
Park Phase 2. This development was acknowledgement of its innovative concept, its extensive
use of e-centric facilities and its potential for transforming the entire neighborhoods into a
vibrant ICT business hub.
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The RM350 million Phase 2 project known as BXB, is an integrated commercial development
positioned as the regions first purpose-built ICT-hub which features ICT retail business lots,
budget e-hotel and service apartments. It is scheduled for completion by the first quarter of
2010. A lease agreement was signed with HELP University College to establish its city campus,
which is expected to house a student population of 5,000 that will support the businesses of the
ICT and other retailers at the park.
To realize the vision of turning BXB into the region's leading IT hub, a MOU was signed with
Telekom Malaysia Bhd on August 19, 2009 for the provision of communication infrastructure
and facilities. This will enable tenants and residents of the business park to have access to state-
of-the-art ICT facilities including telephony, data and broadband connection with the latest fiber-
to-the-office (FTTO) broadband connectivity infrastructure.
More can be expected from future property launches as the unit continues to break new ground
with regard to innovative design and product development that emphasize features t hat are
distinctive to the F&N brand name. Some of F&N property is Fraser Business Park and HELP
City Campus @ Zone E.
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10. BUSINESS FUTURE EXPORT
At F&N, growth and expansion is a key element of F&N business. F&N has an excellent
reputation in Malaysia for high quality canned milk i.e. F&N sweetened condensed milk and
evaporated milk, with a manufacturing history stretching over 45 years. These are very versatile
products, which are largely used as beverage mixers in coffee, tea or chocolate drinks, in
addition to food preparations, confectionaries, desserts, salad dressings and popular drinks like
halo halo in the Philippines, or ice kacang in Malaysia.
F&Ns export initiatives started in the early 80s when the company penetrated the Hong Kong
market, catering to the popular nai char (milk tea) drinkers. Today F&Ns canned milk has
expanded to more than 20 countries around the world, which includes Thailand, Myanmar, Hong
Kong, Taiwan, Singapore, Philippines, Indonesia, the Middle East and Africa.
The growth of the F&N business both at home and the export markets has been built on a strong
reputation of F&N unwavering commitment to quality. F&N offer F&N customers a guarantee
that when you pick up an F&N product in any part of the world, you are assured of the consistent
superior quality, goodness and taste that F&N has long been associated with. In addition, the
Halal certification offers strong reassurance to F&N Muslim customers in the growing Halal
markets in the Middle East and Africa.
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F&N recognizes that the manufacturing of food and beverage requires the most stringent quality
assurance and for that reason, F&N take necessary measures to ensure continuous improvements
to quality, processes and safety. F&N have a team of experienced food technologists and
professional managers and F&N use only the freshest and best ingredients. F&N unwavering
commitment to internationally recognized standards and methods in manufacturing have been
acknowledged as reflected by the numerous awards and certifications that F&N have obtained
over the years
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11. F&N CORPORATE RESPONSIBILITIES
11.1 Environmental Stewardship
At F&N, F&N believe that F&N commitment to integrity in everything F&N do will be
manifested through a sound environmental push. From F&N early beginnings, F&N have
implemented and executed various environmental stewardship initiatives that go beyond
compliance requirements in order to minimize F&N environmental footprint throughout each
phase of F&N products life cycle.
11.2Waste Reduction
As part of F&N aim to reduce waste, F&N have launched numerous recycling campaigns in
schools to inculcate good environmental habits among young people and thus, create awareness
on the importance of recycling.
For the third year running, F&N Beverages and the Shah Alam City Council (MBSA) embarked
on a three-month recycling campaign to inculcate and revive the spirit of recycling in school
children whereby a total of 32 schools took part in this ye ars campaign and yielded
over 105,394 kg of recyclable materials.
Other ongoing environmental projects undertaken included its employee recycling program, a
backwash water recovery system and the operation of a sophisticated effluent treatment plant
which treated all wastewater from the factory before discharge into the common public drains.
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11.3 Energy Management
Cleaner operations at F&N soft drinks, dairies and glass container plants F&N are achieved after
completion of a program to incorporate environmental-friendly natural gas energy F&N into all
F&N manufacturing operations.
The setting up of F&N in-house PET bottle-blowing plant at the soft drinks manufacturing
facility in Shah Alam has helped lessen logistics, storage and handling cost and boosted overall
manufacturing efficiency and quality control. In the process, F&N also managed to do F&N bit
for the environment as the move helped do away with more than 4,800 lorry trips per year that
F&N are previously made by F&N PET supplier in Johor.
11.4 Water conversation
In 2005, F&N commissioned a RM2.8 million pilot plant to upgrade waste water treatment and
conservation at the soft drinks division in Kuching. The plant is Sarawaks first environmentally
friendly plant and also the first waste water treatment facility of its kind to be introduced within
the entire Coca-Cola eco-system in Southeast Asia. This backwash water recovery system which
recycles water used in the incoming water filtration process has provided savings of about
RM300, 000 per year for the Group.
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12. APPENDIX
Figure 1 : FRASER BUSINESS PARK
Figure 2 : HELP CITY CAMPUS @ ZON-E