Singapore's Yeo unveils Asian expansion plans

Singapore's Yeo unveils Asian expansion plans

SINGAPORE (Reuter): Singapore's soft drinks group Yeo Hiap
Seng Ltd. unveiled expansion plans for the Asia-Pacific region
yesterday and said it was close to renewing its sales and
bottling franchise with PepsiCo.

Yeo's managing director and chief executive officer Alex Chan
told a briefing Yeo's was planning new investments in China,
Thailand and Indonesia for 1996.

"We are in active discussions with partners in Thailand and
Indonesia," he said, adding the firm would probably set up joint
ventures in these two countries in late 1996 or early 1997.

The group already has soft drinks plants in Guangzhou and
Shanghai in China and is planning for more in other major Chinese
cities, he said.

To finance these investments, the group will be looking to
bank borrowings and also internal cashflow, he said.

Yeo's makes a popular range of soft drinks and pre-mixed
Chinese teas.

The company was the subject of a fierce takeover battle in
mid-1995 between Orchard Parade Holdings Ltd., led by property
tycoon Ng Teng Fong, and First Capital Corp, controlled by
Malaysian businessman Quek Leng Chan.

Both men wanted control of Yeo's valuable property assets and
the good will associated with its name, analysts said.

Ng, who was the company's largest shareholder before the
battle began, finally gained absolute control of the company in
September.

Chan also told the briefing that Yeo's would soon renew its
franchise to sell PepsiCo drinks in Singapore, which is due to
expire in June this year.

There has been market speculation recently that Yeo's might
lose the Pepsi franchise after the uncertainty generated by the
protracted takeover tussle last year.

"We are on track, working towards signing a multi-year
contract (with Pepsi) within the next six weeks," Chan said.
He gave no financial details.

Chan said there would be some rationalization of the company's
soft drinks operations in Malaysia.

Yeo's was considering building a "mega plant" in Malaysia and
was looking at adding capacity to its Johor plant and closing
some other plants.

Chan said the company remained committed to developing its
food and beverage business despite recent forays into property
development.

Yeo's is building a new Singapore $40 million (US$28.57
million) soft drinks plant in Singapore because it plans to
redevelop its two existing factory sites into residential
apartments in the northern part of the island.

The group unveiled a new logo and will be introducing 11 new
food and beverage products in 1996 -- its first launches of new
products in two years.

Chan said the new products were not expected to contribute to
earnings in 1996 but would do so in 1997.