Malaysian manufacturer of carbonated drinks Fraser & Neave (F&N) has announced an investment of MYR18m ($6m) to install a new polyethylene terephthalate (PET) production line in the state of Sabah.

The investment also includes an infrastructure upgrade at the company’s Kota Kinabalu facility to address the growing demand for PET packaged sparkling beverages in Malaysia.

F&N managing director Khalid Alvi said Sabah continues to be a significant market for the company and the latest investment will enable it to cater to the potential growth for PET sparkling beverages in Sabah.

"We can scale up production seamlessly to thrice the current capacity with no additional investment required," Alvi added.

The new infrastructure includes utility plants such as water treatment, compact anaerobic wastewater treatment system to treat production effluent, a cooling plant, boiler and air compressor to ensure better production efficiency and a greener plant.

F&N said the new line will produce beverages in 500ml and 1.5l PET packaging for 100PLUS and F&N Fun Flavors such as F&N Orange, F&N Sarsi and F&N Clearly Citrus.

Without the need for plant expansion, the new line provided the company production scalability expecting future growth, and also reduced logistics costs of transporting the products from F&N’s main Shah Alam plant or from Kuching.

In the financial year ended September 2011, the Sabah market contributed 12.3% of total soft drinks revenue to the F&N Group. F&N’s carbonated soft drinks (CSD) and isotonic drinks accounted for 40.7% within the PET sparkling category.