POPULAR BEVERAGES: Company banks on 100PLUS brand for foothold in global market
FRASER & Neave Holdings Bhd (F&N) is keeping the market guessing as to whether it will increase the prices of its popular beverages due to the recent increase in sugar prices.
The retail cost of sugar has increased by more than 15 per cent to RM2.84/kg after the government lowered its subsidy on the commodity.
But F&N Beverages Marketing Sdn Bhd managing director Khalid Alvi refused to comment on the matter when asked yesterday.
Khalid said F&N will not be affected by the reduced sugar subsidy.
"There is no great impact to us. We have been buying sugar at zero subsidy for the past few years. But we do face economic inflation pressure and are affected by rising fuel prices.
"Transporters are charging extra now," he said after the "100PLUS Win The Day" campaign launch, here, yesterday.
For the first six months of its current financial year ending September 30 2013, it posted a net profit of RM112 million on revenue of RM1.76 billion.
While revenue rose 19.1 per cent, its net profit fell 24.9 per cent due to the absence of tax incentives and contribution from the property division.
The concern over price increase comes at a time when F&N, a unit of Singapore-listed Fraser and Neave Ltd, is preparing to become a global player.
The company is banking on its popular 100PLUS brand for a foothold in the global market.
If F&N is successful with the 100PLUS project, the rewards could be very substantial and a boon to its shareholders.
F&N in Malaysia is valued at RM6.75 billion, with Permodalan Nasional Bhd and the Employees Provident Fund owning 18.94 per cent and 7.6 per cent, respectively, of its local operations.
Its core earner is beverages, which include soft drinks and milk.
It flagship products are isotonic drinks and other related soft drinks under the brand names Seasons, 100PLUS, F&N, Fruit Tree, Red Bull and Ice Moutain.
If the 100PLUS project is a success, it will be the second energy drink from Southeast Asia to rock the world market, following in Austrian entrepreneur Dietrich Mateschitz footsteps.
Mateschitz had turned a Thailand-based energy drink into Red Bull, and in the process helped build a fortune of more than US$5 billion (RM15.8 billion).
Today, Red Bull remains the world's most-consumed energy drink with 5.2 billion cans sold in 2012.
"We intend to become a global brand within the next five to 10 years," he said.
Khalid said F&N has conducted a study on the Asean market, covering Malaysia, Singapore, Indonesia and Vietnam, to identify market acceptance for its 100PLUS label.
"This is the first step towards expanding regionally," he said.