F&N unit leases land for US$3.9 million to build dairy manufacturing facility in Cambodia

BEVERAGE company Fraser and Neave : F99 0% (F&N) on Thursday (Feb 15) announced that its Malaysian unit Fraser & Neave Holdings Berhad (F&NHB) has agreed, through a subsidiary, to lease an industrial land parcel in Cambodia for a total consideration of US$3.9 million.

Bursa Malaysia-listed F&NHB intends to build a dairy manufacturing facility on the 32,200 square metre (sq m) land parcel, which it has leased for 50 years starting from Feb 1, 2024, noted F&N in the announcement. The statement was also filed on the Malaysian bourse.

The currently vacant plot of land is owned by Suvannaphum Investment and is located in the Suvannaphum Special Economic Zone in Kandal, Cambodia.

To lease the land, F&NBH incorporated a wholly owned subsidiary, F&N Foods (Cambodia) on Feb 14.

The Cambodian subsidiary will primarily be engaged in the manufacturing, sale, marketing, distribution, import and export of dairy products, beverages, confectionary and food products, said the beverage company.

F&NHB said that the consideration of US$3.9 million, which translates to US$120 per sq m, was done on a “willing-buyer, willing-seller” basis, after taking into account the parcel’s US$3.9 million market value, which was appraised by independent valuer Knight Frank (Cambodia).

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

It also considered the land’s suitability for building and operating a manufacturing facility for dairy products.

The amount needed to lease the land will be satisfied with internal funds, said the filing.

The company said the manufacturing facility will produce sweetened beverage creamer in can and pouch, and strengthen its presence in Cambodia.

The total cost of setting up the manufacturing facility is estimated to be US$37.5 million, including the cost of leasing the land, construction and purchase of machinery.

“The manufacturing facility is expected to commence operations in the first quarter of 2026,” said F&NHB.

Shares of F&N, which has a 55.5 per cent stake in F&NHB, ended Thursday down 0.9 per cent or S$0.01 at S$1.07, before the announcement.