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F&N Glass sets sights on Australia market

By Dominique Patton, 06-Jul-2006

The glass business of Malaysia's Fraser & Neave Holdings has ambitious plans to increase exports to Australia, where glass packaging is increasingly used for premium products.

General manager Mogan Muniandy told the StarBiz newspaper that he plans to lift exports to 40 per cent of total revenue in two years compared with the current 30 per cent.

"We are moving more aggressively into our traditional markets, especially Australia and New Zealand. We are also focusing on new markets like the United States, Canada, South Korea and Mauritius," he told the paper.

The company is planning to organise roadshows to Australia and New Zealand to raise the level of awareness of its products and to exploit niche, high-margin Australian and New Zealand markets for jars and juice bottles.

"We are seriously contemplating opening a sales office and warehouse in Australia in the next one to two years to meet anticipated demand and to facilitate reliability of supply to customers," added Muniandy.

The Malaysian market for glass is relatively small, as the majority of consumers do not drink alcohol. F&N Glass already controls 85 per cent of that market.

But in Australia, although consumers are increasingly concerned about glass bottles and jars breaking and particles migrating from the glass packaging into the product, glass is carving out a niche as a premium packaging with an image of quality.

According to Euromonitor research, glass is still the most common pack type for sauces, dressing and condiments and spreads although it is seeing strong competition from plastics.

Overall, it has a 5 per cent share of the total food and beverage packaging market.

F&N has already gained entry into the Australian market through its distribution agreement with Ryco Products in February. The deal, which generated US$3 million in sales to the US, has also helped drive RM1 million worth of orders a year from Australia's large juice and jam maker, Golden Circle.

F&N Glass currently has two plants in Malaysia, one in Vietnam and one in China. It has started building a glass packaging plant in Thailand as part of a joint-venture agreement between Malaya Glass Products (a fully-owned subsidiary of F&N), Thai Asia Pacific Brewery and Siam Glass Industry.