Fraser & Neave (F&N)
by Chua, Alvin
Fraser & Neave (F&N) is a group with businesses in food and beverage, brewing, property development and publishing. Formed in 1883, F&N is one of Singapore’s oldest companies and a well-known brand. Its traditional business was in the production and distribution of beverages from its F&N range and from licensed international brands. In recent decades, property development as well as food and beverage have made up significant segments of F&N’s bottom line. Listed in Singapore, the group’s subsidiaries and associated companies include Frasers Centrepoint, Asia Pacific Breweries and Times Publishing.1 As at 2013, F&N had total assets of over S$14 billion and employed more than 10,000 people in 20 countries.2
In September 1883, John Fraser and David Chalmers Neave, two Englishmen who were already partners in a printing business, the Singapore and Straits Printing Office, formed the Singapore and Straits Aerated Water Company. The company devoted the next two years to market research before starting production from a factory in Battery Road. It initially employed a staff of 20 and used pony carts to deliver its products. A 1892 advertisement listed the company as “manufacturers of soda water, seltzer water, potass water, lemonade, tonic, ginger ale” and suppliers to Singapore’s clubs, hotels and residences.3
In 1898, a new public company was formed to take over the aerated water business, and the Singapore and Straits Printing Office.4 The two businesses were sold to the new company, named Fraser & Neave (F&N), for $290,000 in cash and shares. The company had a capital of $350,000, $225,000 in shares and $125,000 in debentures. With 2,000 shares issued, of which 1,500 were offered to the public, the share issue was subscribed three-and-a half times. The formation of F&N had come about largely due to the retirement of John Fraser and David Neave from active management of the businesses they had set up. Neave, in poor health, remained on the board of the company.5
At the turn of the century, F&N had 63 employees, making it one of the largest in Singapore. By 1913, it had branches in Kuala Lumpur, Malacca, Seremban, Ipoh, Penang, Bangkok and Saigon. It also had agents in Telok Anson, Delhi, Kelantan, Sandakan, Labuan, Sarawak, Port Darwin and Western Australia. After World War I, the company introduced new production techniques and established new factories in Indonesia.6
Diversification, franchising and restructuring
In 1931, F&N ventured into the brewing business when they formed Malayan Breweries Limited in a joint venture with Holland’s Heineken. The brewery produced the popular Tiger Beer, and later acquired Archipelago Brewery, which produced Anchor Beer. In 1936, F&N acquired the Singapore, Malaya and Brunei franchise rights for Coca-Cola drinks, which later became a significant part of their business. Alongside its own range of F&N branded drinks, the company went on to acquire the rights to other brands like 7-Up, Fanta and Sunkist.7
During the Japanese Occupation of Singapore and Malaya (1942–45), the company’s factories and breweries were seized by the Japanese and used to produce drinks for their armed forces.8 After the Occupation, F&N began to recover its assets and, in the post-war years, built new factories in Singapore and Malaya.
F&N began exporting its products in the early 1900s, and its export business grew greatly from the mid-1930s. In 1948, the company set up an export department to deal with the increasing demand. In the 1950s, Malayan Breweries expanded its overseas businesses by acquiring breweries in Port Moresby in Papua New Guinea, and Hawkes Bay in New Zealand.9
In 1961, F&N entered into a joint venture with Beatrice Foods of Chicago to produce sweetened condensed milk. F&N’s plants began to process condensed milk, evaporated milk and other dairy products. Two years later, F&N underwent restructuring that split the company into Malaysia and Singapore businesses under a holding company, Fraser and Neave Limited. New subsidiaries were also set up in the 1960s to manufacture cans, PVC containers and bottles for the company’s drinks.10
In the 1970s, the company focused on growth and research and development, and automated its operations. The company reorganised its management structure in the 1980s, creating new portfolios and independent profit centres to manage its diversified interests.11 It also enlarged its share capital through rights issues. By 1989, it had a turnover of S$1.16 billion and pre-tax group earnings of S$155 million.12
Regional expansion, operational restructuring and property
In the 1990s, F&N’s soft drinks operations were handled by F&N and The Coca-Cola Company, a joint venture 75 percent owned by F&N and 25 percent by Coca-Cola, and under the management control of the latter. During this time, F&N also set up operations in Vietnam, Cambodia, Pakistan, Sri Lanka, Thailand, Myanmar and China. The expansions cut into F&N’s profits and, in 1999, the company sold its 75 percent in the venture,13 receiving a 5.63 percent stake in Coca-Cola Amatil in Australia.14
In 1990, F&N ended a two-year partnership with Australian group Goodman Fielder Wattie, which controlled Cold Storage Holdings. F&N took over most of Cold Storage’s property interests, and added Cold Storage Dairies to its dairy operations.15
In the 1990s, the key drivers of the F&N group’s earnings were the brewery business, listed and renamed Asia Pacific Breweries (APB), and property arm Centrepoint Properties. In 1995, F&N’s earnings from property development exceeded its traditional drinks businesses for the first time, with Centrepoint recording a profit of nearly S$90 million compared with the S$77.6 million profit from APB.16
IN 1996, F&N recorded a net profit of S$218 million, but this fell to S$150.4 million the following year as Asia entered a recessionary period.17 Sharp falls in the profitability of beverage and dairy operations as well as currency fluctuations continued to eat into F&N’s profits over the next few years. In the last three years of the decade, F&N’s share price plunged more than 60 percent.18
In 1999, F&N purchased a 20 percent stake in Time Publishing before taking majority control of the company in 2000, with the entire acquisition costing around S$570 million.19 This put F&N into the printing, publishing, retail bookstore, sales and distribution, education, internet and conference organisation businesses. In 2001, F&N took both Time and Centrepoint Properties private.20
F&N’s profitability and share price began to recover in the early 2000s, and the group was mooted as a possible takeover target for the likes of Malaysian tycoon Quek Leng Chan and San Miguel Group in the Philippines. In 2001, after Quek raised his stake in F&N to 10 percent, F&N initiated a capital management programme. It bought back about 5 percent of its own shares, erecting a defence against a takeover.21 In 2003, F&N restructured its capital by buying back around S$317.7 million of shares, thereby reducing its issued share capital by about 10 percent.22
The property and brewery businesses continued to drive F&N’s profits and for the financial year ending September 2006, the group recorded a net profit of S$319.5 million on revenues of S$3.8 billion.23 In 2006, the Singapore government investment company Temasek Holdings acquired a 14.9 percent, S$900 million stake in F&N, becoming the company’s second largest investor.24 Temasek’s entire stake was sold to Japan’s Kirin Holdings for S$1.33 billion in 2010.25
In 2008, F&N reorganised its management structure after a strategic review. It appointed chief executives for three of its core businesses: food & beverage, property, and printing and publishing.26 In 2009, F&N regained distribution rights for its soft drinks in Singapore when its agreements with The Coca-Cola Company ended. However, at the same time, F&N lost rights to bottle and distribute Coca-Cola beverages in Malaysia.27 Subsequently, F&N introduced new products, and invested in marketing and distribution infrastructure.28
For the financial year ending September 2010, F&N had earnings of S$820 million on revenues of S$5.7 billion. During the year, the group expanded its food & beverage operations with investments in Malaysian snack and biscuit maker, Cocoaland, and acquired ice-cream maker King’s Creameries. F&N also invested in new dairy plants in Malaysia and Thailand.29
1. Sreenivasan, V. (1999, October 14). Has F&N lost its fizz after a century? The Business Times, p. 9. Retrieved from NewspaperSG.
2. Fraser and Neave, Limited. (2013). A legacy built on passion, a milestone for celebration (p. 8). Annual report 2013. Retrieved 2017, August 5 from F&N website: http://fraserandneave.com/docs/default-source/investor-relations/annual-reports/2013/2013-full-ar2013-(without-agm).pdf?sfvrsn=2
3. Fraser & Neave. (1983). 1883–1983, the great years. Singapore: Fraser & Neave, pp. 4, 7–8. (Call no.: RSING 338.7663 EIG)
4. Fraser & Neave. (1983). 1883–1983, the great years. Singapore: Fraser & Neave, p. 9. (Call no.: RSING 338.7663 EIG)
5. Fraser and Neave, Ltd. (1898, January 27). The Singapore Free Press and Mercantile Advertiser (1884–1942), p. 3. Retrieved from NewspaperSG.
6. Fraser & Neave. (1983). 1883–1983, the great years. Singapore: Fraser & Neave, pp. 9–10. (Call no.: RSING 338.7663 EIG)
7. Fraser & Neave. (1983). 1883–1983, the great years. Singapore: Fraser & Neave, pp. 11, 13–14. (Call no.: RSING 338.7663 EIG)
8. Fraser & Neave. (1983). 1883–1983, the great years. Singapore: Fraser & Neave, p.13. (Call no.: RSING 338.7663 EIG)
9. Fraser & Neave. (1983). 1883–1983, the great years. Singapore: Fraser & Neave, p. 13–14. (Call no.: RSING 338.7663 EIG)
10. Fraser & Neave. (1983). 1883–1983, the great years. Singapore: Fraser & Neave, pp. 16–18. (Call no.: RSING 338.7663 EIG)
11. Fraser & Neave. (1983). 1883–1983, the great years. Singapore: Fraser & Neave, pp. 19, 34. (Call no.: RSING 338.7663 EIG)
12. Koh, B. A. (1989, December 16). F&N posts $155m pre-tax gain on record $1.1b sales. The Straits Times, p. 47. Retrieved from NewspaperSG.
13. The Coca-Cola Company. (2017). Our history – 1936 to present. Retrieved 2017, August 5 from Coca-Cola Singapore website: http://www.coca-cola.com.sg/workplace/our_heritage.asp
14. Low, E. (1999, June 12). F&N sells 75% F&NCC stake, posts 66% profit plunge. The Business Times, p. 1. Retrieved from NewspaperSG.
15. Siow, D. (1990, February 10). F&N, Wattie end partnership by carving up Cold Storage assets. The Straits Times, p. 40. Retrieved from NewspaperSG.
16. Lee, H. S. (1995, December 16). Property leads F&N earnings. The Business Times, p. 7. Retrieved from NewspaperSG.
17. Singapore/Fraser & Neave/Earning -3: FY98 hard to predict. (1997, December 12). Dow Jones International News. Retrieved from Factiva via NLB’s eResources website: http://eresources.nlb.gov.sg/
18. Sreenivasan, V. (1999, October 14). Has F&N lost its fizz after a century? The Business Times, p. 9. Retrieved NewspaperSG.
19. Lee, H. S. (2000, April 27). What's in Times Publishing that attracts F&N? The Business Times, p. 4. Retrieved from NewspaperSG.
20. Raj, C. (2001, November 14). F&N in $320m bid to take TimesPub, Centrepoint private. The Business Times, p. 1. Retrieved NewspaperSG.
21. Kusjanto, M. (2001, August 20). Fraser & Neave builds takeover defence. Reuters News. Retrieved from Factiva via NLB’s eResources website: http:/eresources.nlb.gov.sg/
22. Fraser and Neave, Limited. (2004). Ten-year group statistics (p. 4). Annual report 2004. Retrieved 2017, August 14 from F&N website: http://fraserandneave.com/docs/default-source/investor-relations/annual-reports/2004/2004-sections-003f-amp-n04_cs.pdf?sfvrsn=2
23. Goh, E. Y. (2006, November 11). F&N hits another record net profit with $319.5m. The Straits Times, p. 37. Retrieved from NewspaperSG.
24. Sen, Siow Li. (2006, December 9). Temasek takes 14.9% stake in F&N for $900m. The Business Times, p. 4. Retrieved from NewspaperSG.
25. Temasek exits F&N with $436m profit fizz. (2010, July 31). The Business Times, p. 10. Retrieved from NewspaperSG.
26. Goh, E. Y. (2008, July 2). More questions than answers in F&N’s management revamp. The Straits Times, p. 45. Retrieved from NewspaperSG.
27. Yap, E. (2009, February 20). F&N to regain distribution of soft drinks next year. The Business Times, p. 6. Retrieved from NewspaperSG.
28. Fraser and Neave, Limited. (2009). CEO Business Review: Food & Beverage (p. 2). Annual report 2009. Retrieved 2017, August 21 from F&N website: http://www.fraserandneave.com/docs/default-source/investor-relations/annual-reports/2009/2009-section-10-food-amp-beverage.pdf?sfvrsn=2
29. Kang, W. C. (2010, November 22). Growth to continue at Fraser & Neave, but stock has limited upside, analysts say. The Edge Singapore. Retrieved from Factiva via NLB’s eResources website: http://eresources.nlb.gov.sg/
The information in this article is valid as at 2011 and correct as far as we are able to ascertain from our sources. It is not intended to be an exhaustive or complete history of the subject. Please contact the Library for further reading materials on the topic.
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