Why is F&N structured the way it is today?
Over 137 years, F&N has become a household name in Singapore and Malaysia. Recognising the constraints of growth in these markets, we started to embark on regional expansion for long-term sustainable growth. It is precisely this multi-industry, multi-location strategy that has helped F&N survive the economic downturn and scale new heights in profitability.
How would F&N position itself? What is the strategic roadmap for F&N?
F&N remains steadfast in our multiple-business model. We aim to be a leading Asian-based company focused on a balanced portfolio comprising Food & Beverage and Publishing & Printing, with significant business presence in overseas markets and renowned for our product quality, brands, sound management and reputation of delivering value to all our stakeholders.
While our businesses may appear seemingly unrelated, we have built up market leadership positions in each of our business as well as strategic capabilities over the years in brand management, extensive marketing expertise, distribution networks, and financial strength and discipline, which are applicable to all our businesses. F&N is one of the few companies with brands that transcend borders.
Our priority is to drive earnings, placing emphasis on sharpening capital management, widening and deepening our presence in new and existing geographical markets, and creating product extensions.
How does F&N decide when to enter or exit a new business?
Any new business to be considered must satisfy certain criteria pertaining to these earnings targets: Existing businesses should generate returns that exceed the Cost of Capital whilst new businesses should achieve satisfactory return on investment. Other factors taken into consideration include the ability to strengthen our market positions, distribution networks and research and development capabilities.
F&N has demonstrated great resolve when required to exit an existing business; e.g. the ending of our licensing partnership with The Coca-Cola Company in Singapore, Malaysia and Brunei allowed F&N to regain full control of all aspects of our Soft Drinks business, placing us in a better position to face challenges in this highly competitive environment, as well as realise future growth opportunities. This strategic move had proven successful as Soft Drinks recorded strong volume and revenue growth since the expiry of the licensing agreements. To date, F&N remains a leading beverage player in Singapore and Malaysia.