Fraser and Neave’s Soft Drinks Facility Expansion, Shah Alam, Malaysia


Fraser & Naeve facility

Fraser & Neave Holdings (F&NHB), the Malaysian subsidiary of Singapore-based food and beverage company Fraser and Neave (F&N), announced plans to expand its soft drinks facility in Shah Alam, capital of Selangor, Malaysia, in May 2016.

F&N will invest approximately S$60m ($43.83m) in the plant for adding a new state-of-the-art aseptic cold-filling polyethylene terephthalate (PET) bottle line and a warehouse facility. The new facilities will enable the company to cater to the growing demand for ready-to-drink tea, soya and soft drink products in Malaysia.

Works on the expansion are scheduled to begin in July 2016, and the completion scheduled for 2017.

Purpose of the expansion

The investment is in line with F&NHB's S$102m ($74.51m) two-year capital expenditure plan in the Malaysian market, which is one of the company's key markets. To continue its position as one of the lowest cost producers in the industry, the company plans to expand its product offering and packaging formats through the investment.

Besides fuelling business growth in Malaysia, the new investment will increase the company's total asset value in the country to MYR1.9bn.

F&N's Shah Alam plant expansion details

The proposed facilities, including the integrated four-storey warehouse, will be built on a 9,000m² site within Shah Alam's existing soft drinks plant. The new facility will increase the plant's storage facility by approximately four times.

The aseptic cold-filling PET bottle line, which will be housed in the warehouse, will produce new offerings and packaging formats. The new production line will reduce the PET resin packaging material consumption by 40% resulting in reduced carbon footprint and packaging costs for the company.

Once completed, the aseptic cold-filling line will increase the total production capacity of the plant by 6.5 million cases a year.

Details of F&NHB's existing soft drinks facility

F&NHB's Shah Alam plant is the biggest of the three production facilities owned by the company in Malaysia. Constructed with a multimillion dollar investment, the facility is spread across an area of 76 acres. It features 11 production lines, including PET bottle lines, TetraPak lines and can lines, which can produce 1,500 cans of drinks a minute and 65m cases of soft drinks a year.

"The new facilities will enable the company to cater to the growing demand for ready-to-drink tea, soya and soft drink products in Malaysia."

In 2011, the company added an MYR42m ($13m approximately) three-in-one mono-block production line at the plant to cater to the increasing demand for PET beverages in Malaysia. The production line performs multiple functions such as blowing PET bottles, filling and packing all CSD and isotonic products and is also equipped with the technology to blow bottles in various packaging sizes, ranging from 500ml to 2l bottles.

Claimed as the first mono-block production lines in the Asia Pacific region, the production line has the capacity to fill 672,000 bottles a day (139.2 million bottles a year) and is one of the fastest production lines in the region.

F&N's other investments in Malaysia

Besides the proposed expansions at Shah Alam site, F&N has also announced that it will invest S$10m to install a new UTH line at its existing soft drink plant in Kuching, the capital city of Sarawak, to meet the growing demand in East Malaysia.

The new line, which is scheduled to become operational in October 2016, will add a production capacity of 3.4m cases a year to the plant.

The company has also announced a MYR45m (approximately $14m) investment on a new PET line in Shah Alam plant, which will become operational in June 2016.

Marketing commentary on F&N

Fraser & Neave Holdings is one of the biggest soft drinks manufacturer and distributor in Malaysia. Headquartered in Shah Alam, the company operates four manufacturing plants in the region.

F&NHB offers a broad portfolio of soft drinks products in the Malaysian market, including 100PLUS, F&N Fun Flavours, F&N SEASONS, F&N Condensed and Evaporated Milk, F&N Magnolia, Farmhouse, Carnation and F&N Fruit Tree Fresh. With more than 3,000 employees, the company operates in Malaysia, Brunei, Thailand and Indochina.