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KUALA LUMPUR: Fraser and Neave Holdings Bhd may come up with a record number of new products this year with a capital expenditure of RM30 million as it looks to help neutralise bottom-line pressure when sugar tax comes into force this April.

In the last 2019 Budget, the government will impose an excise tax of 40 sen per litre on sweetened beverages beginning April 1, 2019.

This will be on beverages that contain sugar exceeding five grams per 100 mililiters, as well as juices that contain more than 12 grams per 100 mililiters.

Chief Executive Officer Lim Yew Hoe said the investment, on top of the RM500 million it had set aside for ongoing projects in Malaysia and Thailand, will enable the company to fast track development of healthier beverages.

“This is part of our efforts to mitigate the sugar tax. The capital expenditure will encompass portfolio transformation.

“We will speed up innovations into healthy products category with valued-added benefits. The extra capital expenditure in Shah Alam will enable new products to be produced from October 2019. It could be a few dozens of them,” he told reporters after the company’s annual general meeting.

Last year, F&N launched 13 new products with healthier options and new packaging, which helped the company achieve RM4.1 billion in revenue.

“Our investments in new production technologies yielded positive results in producing high quality and healthier options. The new entrants last year received positive market response, which in turn contributed to the increase in our overall market share,” he added.

Lim said other plans to mitigate sugar tax include reducing the amount of sugar in its main products to less than five per cent while maintaining the original taste as well as producing smaller pack size, which in a way reduce total sugar per serving and the price.

He said the company is on track to surpass RM800 million sales target in exports by 2020.

“Volume growth from international markets has to some extent helped neutralize the top and bottom-line pressures and balance our currency exposure.

“We plan to accelerate our venture into high potential markets, particularly in Asean, the Middle East and African countries as well as Greater China region,” Lim said.

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