Butterworth Plant To Ease Shah Alam, Bentong Overload, Says F&N CEO

KUALA LUMPUR, April 29 (Bernama) -- Fraser & Neave Holdings Bhd (F&N) is set to commence operations at its refurbished Butterworth plant to ease production capacity constraints currently faced at its Shah Alam and Bentong facilities.

F&N chief executive officer Lim Yew Hoe said the Butterworth site, previously used for glass bottle manufacturing and later as a regional warehouse, has been renovated to house new production lines for carbonated soft drinks (CSD) and drinking water.

"The building structure was already in place, so we renovated the premises and installed new machinery, allowing us to save on land acquisition and construction costs," he said during the group’s financial briefing for the first half ended March 31, 2025 (1H FY2025).

bootstrap slideshow

Lim said the company is in the process of obtaining halal certification and other necessary approvals before operations can begin.

“The best part is that with a low startup cost and the ability to manufacture closer to the northern market, we can achieve significant savings on both setup and logistics costs, as transporting a carton of 1.5-litre CSD like 100PLUS from Shah Alam to the north is currently expensive.

“You might ask why we are doing this only now. The answer is that our existing factories are at full capacity. Shah Alam and Bentong are full, so it’s time to expand and shift part of the production north, allowing our central and southern operations to focus on their regions and boost sales,” he said.

bootstrap slideshow

Lim added that with the new plant, F&N is also planning to produce smaller SKUs (stock keeping units) for drinking water, around 200ml to 250ml, as demand for smaller pack sizes is increasing.

Touching on F&N’s AgriValley project in Gemas, Negeri Sembilan, Lim said the company plans to expand operations to 10,000 dairy cows in the first phase, before reaching a target of 20,000 cows in the second phase to achieve breakeven.

"The RM1.8 billion investment reflects our long-term strategy to reduce dependency on dairy imports and strengthen the local raw milk supply.

"Of the total capital expenditure of RM1.8 billion, approximately RM600 million has already been spent on the construction of facility infrastructure, while approximately RM100 million has been allocated for the acquisition of cows," he said. 

The F&N AgriValley project, announced in 2023, is focused on developing sustainable farming methods and food production technologies to improve local agriculture and food security.

Yesterday F&N reported a lower net profit for the second quarter ended March 31, 2025 (2Q FY2025) of RM140.34 million from RM165.41 million in the same quarter last year.

Revenue was also slightly lower by 1.4 per cent to RM1.33 billion versus RM1.35 billion previously, primarily due to slower festive sales experienced by its Malaysia’s food and beverage (F&B) segment, flooding in East Malaysia and lower sales from Indochina’s F&B segment, according to F&N. 

-- BERNAMA