1. Overview of Food and Beverage Industry1.1. Evolution of Food and Beverage Industry in MalaysiaMalaysias food industry is as diverse as the multi-cultures of Malaysia, with a wide range of processed food with Asian twist.Between late 1980s and early 1990s, the strong economic growth has contributed to major changes in consumer purchases and consumption patterns in Malaysia. Malaysians living in urban areas are relatively brand conscious, and they prefer to shop in stores. This gives them the convenience and good product selection of what they want. The changes of lifestyle have also led to an increase in the demand for convenience food and health food.The food processing industry is predominantly Malaysian-owned. Today, Small and medium enterprises have represented more than 80% of the total number of establishments in the processed food segment. In line with the government's emphasis on agriculture sector, the processed food and beverage industry had become an important component of the agro-based industry. The food processing industry contributed about 10% of the Malaysian manufacturing output in 2010.1.2. Current of Food and Beverage IndustryToday, the demand for halal foods by Malaysian consumers has increased over the years. The expectation of the halal food products have extended from meat products to non-meat based products such as snacks, dairy and etc. Halal is fast becoming recognized as a new benchmark for quality, hygiene and safety. In Malaysia, having halal certificates are value added to its food products and ingredients. Besides, with the emphasis given by the Government to promote Malaysia as an international halal hub, the halal food industry is ensuring its prospects. Concurrently, it is a new trend that many Malaysians shift towards a healthier diet and lifestyle. The Malaysia government has run several healthy eating campaigns to amplify health concern trend. With the increasing consumer awareness in nutrition value and food fortification for healthcare has created the demand for fresh food, organic food and nature food flavours from plants and seafood. Other than that, the government has also taken the necessary steps in reducing the consumption of sugar to overcome the obesity and diabetes in Malaysia. Muslim Consumers Association of Malaysia secretary-generalsaid that the reduction in sugar subsidy would encourage Malaysians to practise a healthier lifestyle (M. Osman, 2012). Besides, a reduction in subsidy for sugar, in stages, could reduce the consumption of sugar in their daily meals (S. Subramaniam, 2013).1.3. Competitiveness of this industry in MalaysiaThe halal industry in Malaysia provides potential opportunities for Malaysian manufacturers. The concept of halal is associated with the food products which are of high quality in terms of cleanliness, sanitation and compliance with religious requirements. Malaysia has proven itself highly qualified to lead the global halal food industry. The fact that the United Nations has cited Malaysia as the worlds best example of benchmarking of halal food in accordance with the Codex general guidelines in 1997 affirms Malaysias leading role in the global halal food industry. As the consumer concerns on health and convenience, it forces the food and beverage industry to change their customized formulations in the food ingredients. In Malaysia, health food produced is mainly in the form of food products that are enriched. Food ingredients such as natural food additives and flavours have the potential for further growth in the industry. Besides, the leading producers of packaged food in Malaysia are expected to continue strengthening their competitive edge through the introduction of healthy and convenient products.

2. Company Business Description2.1. Roti Xiang Huat BhdRoti Xiang Huat Bhd first started as a small in-store bakery at Jalan Ipoh in 1993, producing variety bread with the help of experienced Malaysia, Soo Ann Siang, who had 28 years experience in the bakery business.Roti Xiang Huat Bhd range of products grew and evolved through the years, becoming better with each step. Leveraging on its brand strength, Roti Xiang Huat Bhd now produces a variety of baked products to satisfy consumers' demands.It offers a wide array of superior bakery products including white, wheat and health breads, flavoured loaves and snack items like snack cakes, muffins and toasts. Roti Xiang Huats breads are known for their good taste, softness, freshness, nutritive value and oven-baked aroma. The popular Classic White Bread is zero cholesterol and bromated free, has zero Transfat, and is mineral fortified and vitamin, exceeding DOH recommendations.The competitive advantages of Roti Xiang Huats bread include better bread formulation, storage, choice and manufacturing, storage hygiene standards and distribution. It's no accident Roti Xiang Huats bread does not go mouldy quickly or easily. New industry standards and systems had to be set up and staff recruited and trained for ISO and Halal certification. Free market competition and true entrepreneurship, like genius, is all about 90% perspiration and 10% inspiration.In the future prospect, Roti Xiang Huat Bhd is focused on product expansion and improvement of distribution efficiency to ensure that only fresh breads reach consumers every day. Roti Xiang Huat Bhd needs to strictly follow its international policy of keeping only fresh stocks on the store shelves. When the products come out of the factory, the delivery vans leave the production plant as early as 4 oclock in the morning to bring the products to specific locations. Replacing unsold breads in store shelves with only freshly baked top-quality products during each day of delivery.Roti Xiang Huat Bhd also plans to take over a desired company to expand their business in the future rather than build another business originally. That is because taking over a company can increase its market share or to achieve economies of scale that can help to reduce its costs and thereby increase its profits. It also can boost revenue streams and market share, broaden product base and increase the international presence through the taking over companies.Other than that, Roti Xiang Huat Bhd is going to launch user-friendly web interface because nowadays consumers are searching information about the companies from internet after they heard the radio advertisement. Thus, a success business should maintain a user-friendly web interface that provide valuable information for the consumers and preferred if it may provide multiple languages that satisfies the needs of global customers.With the special services and differentiate products provided, Roti Xiang Huat Bhd is looking forward to serve the market with a new and different breads enjoying experience, which may bring higher revenue and better market share for the Roti Xiang Huat Bhd.

2.2. Targeted2.2.1 Fraser & Neave Holdings BhdFraser Neave Holding Bhd (F&N) was incorporated at year 1883 when founders John Fraser and David Chalmers Neave formed a company named Singapore Straits Aerated Water Company in Singapore. After few years, F&N was consolidated and enter the food beverage industry. It has its own vision to become the leading total beverage company in Malaysia and the region and their mission is to be a world-class multinational enterprise providing superior returns to their shareholders, a rewarding career for their employees and excellent value for their customers. (fn, 2011)F&N was founded in 1961 and based in Kuala Lumpur, Malaysia. It is listed on Bursa Malaysia under the Main Market. It have many subsidiaries and they are engaged in the manufacture and sale of soft drinks, glass container, dairy products, property development activities and the provision of management services. The Company operates in three segments which are soft drinks, dairy products and others. The Company's dairy products brands include F&N Sweetened Condensed Milk, Tea Pot, Cap Junjung, Ideal, F&N Evaporated Milk and Carnation brands of condensed & evaporated milk. The Company's soft drinks portfolio consists of brands, such as F&N Fun Flavours, 100PLUS, F&N SEASONS, F&N Ice Mountain, F&N Fruit Tree and the newly-launched OISHI Green Tea. (fn, 2011)The competitive advantage of F&N is they produce high quality of canned milk. It gains excellent reputation in Malaysia and this product is largely use as beverage mixers in coffee, chocolate drinks and tea and now canned milk has successfully been exported to more than 20 countries around the world. Besides that, the halal certification offers strong reassurance to Muslim customers in the growing Halal markets in Malaysia.In the future prospect, Fraser & Neave Holdings Bhd will kick-start its planned property project in Petaling Jaya with the launch of 900 units of serviced apartments worth RM560 million in the fourth quarter of this year according to THE STAR ONLINE. F&N chief financial officer Soon Wing Chong said that the entire integrated residential and commercial development will take five to six years to complete. This project is joint venture between F&N and Singapore-based FCL Centrepoint Pte Ltd. (SHAN)Other than that, the chief executive officer Somsak Chayapong said it was targeting to double revenue from its exports, especially to neighbouring countries which it already had a presence in. Exports contribute 15% to its top line currently and he expects the number to grow in the next five years to between 25% and 30% by strengthening its foothold in markets like the Philippines and Indonesia. This marked a beginning of an era of more success as F&N Holding Bhd continues to grow from strength to strength in todays highly competitive economic landscape.

2.2.2 Nestl (Malaysia) BhdNestl Company was founded in 1866 by Henri Nestl and is today the world's biggest food and beverage company. The history of Nestl began in Switzerland in 1867 when Henri Nestl, a pharmacist who launched his product Farine Lactee Nestl which is a nutritious gruel for children. Henri used his surname, which means little nest, in both of the company name and the logotype. The nest, which means security, nourishment and family, still plays a central role in Nestls profile. (History)Nestl Company was listed on the Bursa Malaysia in 1989. Nestl Company has two segments which are beverages and foods and others, which include Nutrition and Nestl Professional. Nestls products are categorized into coffee and beverages, culinary prepared foods, junior foods, liquid drinks, milks, breakfast cereals, chocolate, chilled dairy, ice cream, and confectionery, performance nutrition, healthcare nutrition and Nestl professional. Nestl produce several brands, name Milo, Nescafe, Maggie, etc.The competitive advantage of Nestl is the company has a strong Research and Development operations that helps the company to achieve cross-border synergy such as packaging its global products to local preferences. Nestl also emphasizes on using todays information technology that Nestl believe it can present a long-term opportunity for them to smoothen the companys operation or to increase efficiency in packaging, compare with other companys operations. (nestle) Besides, Nestl also has better technological capability to renovate the existing products to be higher quality, more innovative and much healthier product as Nestl realized that consumer-centred innovation and renovation is the most important pillar of Nestls worldwide strategy which will accelerate Nestl to advance from good to better. In the future prospect, Nestl (M) Bhd managing director Alois Hofbauer said Nestl plan to produce more innovative food products. He said earnings driver would come from three directions, which are continued growth from its innovative products, existing products and export markets. He adds that Nestl will continue to grow and produce more innovative products for example like its Milo, Nescafe and Maggie noodles. (thestar)Other than that, Nestl is expected to add more manufacturing capacities in its plant in Chembong in Negeri Sembilan. It is also working on details on setting up a manufacturing plant adjacent to its Shah Alam plant. Hofbauer said the groups new plant would begin commercialization in the first half of 2014. He also wants to add new plant in Shah Alam which would be mainly for liquid drink products.Nestl exerts great efforts to achieve its visions to be the leader in Health, Nutrition and Wellness Company by producing better quality of products to the consumers. Nestl is also doing research about the consumers needs from time to time and satisfy the consumers. Nestls strengths such as effective strategic marketing capability, high financial capability, strong research and development, great leaderships have helped them through the obstacles. Nestl focuses on its missions and ensures consistency by making the right decisions to manage and build its business to deliver the promise of Good Food, Good Life all over the world.

3.0 Evaluation of Targeted Companies Financial PerformancesComputation of Ratio (Remarks: All calculations are located in Appendix)3.1.1 Fraser & Neave Holdings BhdProfitability Ratio

Year

Ratios201120122013

Gross Profit Margin:30.70% 27.38% 29.52%

Net Profit Margin:11.38% 7.28% 9.05%

Return on Capital Employed:25.34% 14.68%17.04%

Efficiency Ratio

Year

Ratios201120122013

Asset Turnover:2.227 times 2.016 times 1.884 times

Fixed Asset Turnover: 3.881 times 3.015 times 3.292 times

Inventory Turnover Days:44.28 days 53.19 days53.21 days

Liquidity Ratio

Year

Ratios201120122013

Current Ratio:1.7 : 1 1.12 : 1 1.45 : 1

Acid Test Ratio: 1.26 : 1 0.75 : 11.06 : 1

Trade Debtor Days: 43.39 days 44.85 days 42.98 days

Trade Creditor Days: 32.75 days30.31 days 30.72 days

Investment Returns Ratio

Year

Ratios201120122013

Dividend yield:11.09% 4.505% 3.118%

Basic Earnings per share (EPS): RM 1.029 RM 0.759 RM 0.717

Dividend cover: 0.75 times 1.226 times 1.648 times

Price / Earnings: 16.035 times23.98 times 25.94 times

Gearing (Capital Structure) Ratio

Year

Ratios201120122013

Debt ratio: 0.37 : 1 0.4 : 1 0.4 : 1

Capital Gearing ratio: 0.09 : 1- 0.08 : 1

Debt To Equity Ratio: 0.1 : 1- 0.09 : 1

Interest cover:39 times20.39 times 22.80 times

3.1.2. Interpretation of Financial Performance Remarks: All graphs/charts are located in Appendix

Net Profit MarginThe line chart (Figure 1) shows the probability of net profit margin among the 3 years. In year 2011, Fraser and Neave (F&N) has 11.38% of net profit margin. However, the net profit margin dropped seriously to 7.28% in year 2012. F&N Limited in Singapore claimed that the lower profit was mainly due to lower recognition of Development Property earnings as a result of a change in accounting standards and one-off gains in year 2011 not repeated that year. Besides, the decline in performance due to the cessation of the Coca-cola business, flood disruptions in Thailand and higher raw material costs and competitive pressures in the Malaysian dairy operations also are the affecting reasons. In year 2013, the net profit margin raised back to 9.05%. This is due to the leading positions of their soft drinks in the ready-to-drink segments of Singapore and Malaysia.

Return on Capital Employed The bar chart (Figure 2) shows the probability of return on capital employed from 2011 to 2013. In year 2011, Fraser & Neave (F&N) has 25.34% of return of capital employed. Higher return on capital employed indicated that F&N is employing its capital effectively and generating shareholder value. They did optimize their capital allocation on development property and commercial property. In year 2012, return on capital employed dropped to 14.68%. It is because proposed cash distribution of approximately $4.0 billion by way of capital reduction of one for every three F&N shares was not carried. However, there is only a slightly increase of return on capital employed to 17.04% in year 2013.

Acid Test RatioBar chart (Figure 3) shows the ratio of acid test ratio from year 2011 to year 2013. Acid test ratio is used to determine whether a firm has enough assets to cover its current liabilities without selling the inventory it has on hand. If a firm has an acid test ratio that is less than 1, it means that the firms current assets are unable to pay its current liabilities. In year 2011 and 2013, the acid test ratio of Fraser and Neave (F&N) are 1.26 and 1.06 which is above 1, it means they can cover their current liabilities without selling their inventory. However, F&N has an acid test ratio of 0.75 which is below than 1 in year 2013. It is because MTN and CP of up to RM1, 000 million was issued in 2008 by a wholly subsidiary of F&N to fund capital expenditure and refinance the existing bank borrowing of the Group. Besides, F&N Dairies (Thailand) Limited, a wholly owned subsidiary of the Company, has got an unsecured (?)

Dividend yieldThe line chart (Figure 4) shows the dividend yield from year 2011 to year 2013. In year 2011, Fraser and Neave (F&N) company has its highest dividend yield, compared to year 2011 and 2013. The reason is the Board recommends a final ordinary of 12.0 cents per share and after the shareholders approved, the total distribution for the year will be 18.0 cents per share, representing a raise of 6% over year 2010, where it became the highest dividend paid by the company to date. In year 2012 and year 2013, the dividend yield of the company dropped consequently. It is due to the decline in performance due to the cessation of the Coca-Cola business, flood disruptions in Thailand and higher raw material costs and competitive pressures in Malaysian dairy operations.

Dividend CoverThe chart (Figure 5) shows the dividend cover of Fraser and Neave (F&N) company between year 2011 and year 2013. Dividend cover measures of a firm's ability to pay its dividend, the higher the cover, the greater the possibility of earning the dividend. In year 2011, the dividend cover of F&N Bhd is 0.75 times. Moreover, the dividends cover in year 2012 and year 2013 increase consequently to 1.226 times and to 1.648 times. It is because there is a capital reduction approved by the shareholders of the company.

Price/ EarningsBar chart in Figure 6 shows the price-earnings ratio of Fraser and Neave (F&N) company from year 2011 to year 2013. In year 2011, the price-earnings ratio of F&N Bhd is 16.035 times. However, the price-earnings ratio is increased to 23.98 times in year 2012. The reason is F&N company consistent leading market shares across various products have led to F&N being conferred numerous brand awards. For example, In Malaysia, F&N maintained its leadership position of the sweetened condensed milk and evaporated milk categories to take majority market shares. Moreover, the price-earnings ratio increased slightly to 25.94 times in year 2013.

Interest CoverThis chart presents the interest cover of Fraser and Neave (F&N) Company from year 2011 to year 2013. In year 2011, F&N has the interest cover of 39 times. However, the interest cover dropped to 20.39 times in year 2012. It is because F&N faced the decline in performance to the end of the Coca-Cola business and 7 months of flood disruptions in Thailand. Other than that, higher raw material costs and competitive pressures in the Malaysian dairy operations are also one of the reasons that affect the net profit before tax and interest. In year 2013, interest cover of F&N slightly increased to 22.8 times since the net profit before interest also increased.

3.2. Nestl (M) Bhd3.2.1. Computation of RatiosProfitability Ratio

Year

Ratios201120122013

Gross Profit Margin:32.80%34.09%35.38%

Net Profit Margin:12.33%14.42%15.35%

Return on Capital Employed:53.31%67.32%72.28%

Efficiency Ratio

Year

Ratios201120122013

Asset Turnover: 4.3224 times 4.6695 times4.7085 times

Fixed Asset Turnover: 5.2835 times4.8175 times4.575 times

Inventory Turnover Days: 51.89 days56.44 days 48.41 days

Liquidity Ratio

Year

Ratios201120122013

Current Ratio: 1.11 : 1 0.90 : 10.87 : 1

Acid Test Ratio:0.54 : 1 0.46 : 10.49 : 1

Trade Debtor Days: 15.93 days 13.18 days 13.52 days

Trade Creditor Days: 66.61 days75.01 days 69.93 days

Investment Returns Ratio

Year

Ratios201120122013

Dividend yield:3.2% 3.3%3.5%

Basic Earnings per share (EPS):RM 1.946RM2.155RM 2.395

Dividend cover:

Price / Earnings:28.880 times30.552 times28.392 times

Gearing (Capital Structure) Ratio

Year

Ratios201120122013

Debt ratio: 0.68 :1 0.61 : 1 0.61 : 1

Capital Gearing ratio:0.37:10.10 : 1 0.09 : 1

Debt To Equity Ratio: 0.51 : 1 0.11 : 1 0.10 : 1

Interest cover:27.09 times 32.63 times 33.51 times

3.2.2. Interpretation of Financial PerformanceReturn on Capital EmployedBar chart of Figure 8 shows the profitability of Return on Capital Employed (ROCE) from year 2011 to 2013 of Nestl (M) Bhd. In year 2012, the ROCE of Nestl Company is at 67.32% compared to the previous year which is 53.305%. ROCE has been increased by 14.015% within one year period. This shows that Nestl is earning more profit than year 2011. It is due to the sales volume of Nestl celebrated 100 domestic and export sales in year 2012. During 2012, Nestl celebrated 100 years of being in Malaysia by organizing a lot of event that had a positive impact on consumer confidence, which led to the strong performance in domestic sales. Besides, Nestl was also introducing new products to boost their sales and reduce their total assets. These reasons caused the strong growth in demand from the domestic as well as export markets resulting in the sharply increase of ROCE during the year 2012. Price/Earnings Ratio The chart of Figure 9 shows the Price Earning (P/E) ratio from year 2011 to 2013 of Nestl (Malaysia) Berhad. In year 2012, the P/E ratio of Nestl Company is at 30.522 compared to year 2011 and 2013 which is 28.880 and 28.392 respectively. The P/E ratio is the highest in 2011 compare to year 2011 and 2013. The P/E ratio of 2012 is viewed as more attractive than 2011 and 2013. In year 2012, Nestl Celebrated 100 years of being in Malaysia by Media launch. This has increased the investors confidence. Therefore, the investors are willing to pay a premium because of its optimistic future growth prospects.

Capital Gearing ratioThe bar chart (Figure 10) shows the capital gearing ratio from year 2011 to 2013 of Nestl (Malaysia) Berhad. In year 2011, the capital gearing ratio of Nestl is 37% compared to 2012 and 2013 which is 10% and 9%. Therefore, the capital gearing ratio is highest in year 2011 compared to year 2012 and 2013. It is because in year 2011, Nestl launched new project which required a long term borrowing loan. This showed that Nestl increased their capital by getting debt funding from borrowers rather than getting equity funding from its shareholders. It may have the risk that costs of business will be rapidly increased if the interest paid on debts increase.

Interest coverThe bar chart (Figure 11) shows the interest cover from year 2011 to 2013 of Nestl (Malaysia) Berhad. In year 2011, the interest cover of Nestl is 27.09 compared to year 2012 and 2013 which is 32.63 and 33.51 which is higher than year 2011. This meant Nestls Ability to meet its obligation was dropped too. It is because Nestl launched a new project which required a large volume of capital. However, it is still under control of Nestl itself as at 27.09, its interest cover ratio is more than satisfactory. It means that the necessary profit is 27.09 times larger than the interest payments that the business had incurred.

4.0 Performance Analysis 4.1 Comparison of Financial Ratios between F&N and Nestle for Year 2013

Profitability Ratio

F&NNestle

Gross Profit Margin: 29.52%35.38%

Net Profit Margin: 9.05%15.35%

Return on Capital Employed:17.04%72.28%

Efficiency Ratio

F&NNestle

Asset Turnover: 1.884 times4.7085 times

Fixed Asset Turnover: 3.292 times4.575 times

Inventory Turnover Days:53.21 days 48.41 days

Liquidity Ratio

F&NNestle

Current Ratio:1.45 : 10.87 : 1

Acid Test Ratio:1.06 : 10.49 : 1

Trade Debtor Ratio:42.98 days 13.52 days

Trade Creditor Ratio:53.21 days 69.93 days

Investment Returns Ratio

F&NNestle

Dividend yield: 3.118%3.5%

Basic Earnings per share (EPS): RM 0.717RM 2.395

Dividend cover: 1.648 times

Price / Earnings: 25.94 times28.392 times

Gearing (Capital Structure) Ratio

F&NNestle

Debt ratio: 0.4 : 1 0.61 : 1

Capital Gearing ratio: 0.08 : 1 0.09 : 1

Debt To Equity Ratio: 0.09 : 1 0.10 : 1

Interest cover: 22.80 times 33.51 times

4.2 Performance Analysis of F&N and NestleThis section provides a view on the performance and future prospects of both companies throughout the years of 2011, 2012 and 2013. A few key factors have been identified in determining the best company to takeover.

4.2.1. Comparison of financial performance of both F&N and Nestle From the above table, Nestles profitability is looking more favourable than F&Ns. The percentage of return on capital employed (ROCE) of Nestle is higher than F&N by almost 4 times. Looking closely at the trend of the profitability ratio over the past 3 years, Nestls gross profit margin, net profit margin and ROCE notes a steady increase while the ratios of F&N fluctuates uncertainly. This imposes that F&Ns profitability might not be stable and it might subject to future uncertainties. By looking at the asset turnover rate, Nestle is seen to have a higher rate than F&N. Looking back at the trend of the previous three years for F&N, they recorded a decrease in the asset turnover. However in the case of Nestle, they are actually increasing. This suggests that the usage of assets in generating revenue is efficient in Nestle whereas in F&N the usage efficiency is deteriorating. Nestle also has higher investment return ratio as compared to F&N in the terms of the dividend yields and dividend coverage in the previous 3 years. Investors will be getting more from their investment in Nestle, rather than F&N. This is may attract more investors in the future. However, looking at the overall gearing ratio of the two companies, F&N is doing better than Nestle. Its capital gearing ratio and debt to equity ratio are both lower than Nestle. This means Nestle is exposed to higher financial risk than F&N. Nevertheless, the interest coverage ratio of Nestle during the previous 3 years shows an upward trend and this is definitely a positive sign of the overall health of the company. Through this analysis, it can be said that Nestls overall financial performance during the past 3 years is better than F&Ns. As an investor, this analysis is crucial in determining the future survival of the company. 4.2.2. The strong Research & Development operations of Nestle As it had been highlighted previous, one of Nestls competitive advantages is its strong R&D operations. In Malaysia as well as around the world, people are shifting their diet towards a healthier diet and Nestle realizes that. Hence with its investment of RM 6 billion annually on R&D, they are able to be the food industry leader in nutrition, health and wellness. By bringing together all of its global R&D resources, Nestl is able to provide high quality, safe food solutions for consumers worldwide. Werner Bauer (Chief Technology Officer, Nestl S.A) One of the few projects undertaken by Nestle is Fortification of Micronutrient. According to the 2013 World Hunger and Poverty Facts and Statistics, 1 out of 3 people are affected by micronutrients (vitamins and mineral) deficiency. Nestle is actually taking steps to address this issue by fortifying its products with these vitamins and minerals. In 2012, Nestl sold over 150 billion servings of fortified products. The goal is to reach 200 billion fortified servings worldwide by 2016 (Nestle, 2013). Nestle believes that through these operations, it will allow Nestle to achieving its goals to help address global and local issues in the areas of nutrition. This operation is also believed to have a potential in increasing customer and shareholders value. As a prospective investor, this is important as it maps the future of the company.

4.3.3. Property Development of F&N in Seksyen 13, Petaling Jaya

F&N is expecting to launch its first planned property project of its former factory land in Section 13, Petaling Jaya in the fourth quarter this year (The Edge Malaysia, January 2014). The development on the 12.72 acre of land comprises of 900 units of serviced apartments, a hotel, retail outlets and office lots. This project is a result from a partnership with FCL Centrepoinjt Pte Ltd, one of Singapores top three residential property developers and retail mall owners and operators (Star Property, May 2012).

This project is a good move by F&N to restore its profit margin when they recognized a decline in profits during the year 2012 due to the cessation of Coca-Cola business, the 200-days flood in Thailand that affected the Thai plant and the increasing raw material cost. Nevertheless, the success of this project is subject many uncertainties.

For one, this development is still undergoing and no one could predict the future of this market, depite F&Ns optimism. Secondly, as a bread manufacturer looking to expand its business deeper into the food and beverage industry, this development might deviate the direction of our expansion. No doubt this development project opens up new stream of revenue, however, skills and knowledge in managing property may be lacked. It is not impossible to takeover this but proper planning must be done in order to succeed.

http://www.j-propves.com.my/?cur=news/view&id=980&title=News_:_F&N_to_Reap_Profit_from_PJ_Property_Development_in_3_Years

http://www.theedgemalaysia.com/business-news/272471-fan-to-launch-pj-development-in-4q.html

http://www.thestar.com.my/Business/Business-News/2013/11/09/FN-sticks-to-property-plan-It-will-launch-mixed-project-at-Section-13-next-year/

http://www.starproperty.my/index.php/articles/property-news/fn-sees-revenue-from-property-development-in-fy16-2/

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