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.