Fraser & Neave Holdings Bhd Sustainability Report 2020

In-sourcing of Fresh Milk at our Pulau Indah plant As part of our capacity building for in-sourced milk and juices, we have invested RM40 million in a new fresh milk line at Pulau Indah plant. Beginning 1 April 2020, we have started to produce chilled milk and juices at Pulau Indah plant and this has helped to reduce our operational cost. These milk and juices also come with the new and improved packaging – TetraEdge. Proof of Delivery Solutions in Thailand In Thailand, we have implemented a “Proof of Delivery” (ePOD) solution where transportation activities are monitored in real time through a tracking system. Through this solution, it provides real-time visibility and traceability of goods, along with instant and pro-active communications with our customers. This has also reduced the back-office administration. FUTURE READY INVESTMENT This year, we have invested approximately RM134 million in capital expenditure to improve energy efficiency by generating renewable energy, elevate product innovation and drive cost competitiveness. Process innovation projects implemented are described in our Annual Report 2020, and include: Solar Photovoltaic (PV) system at Shah Alam, Pulau Indah and Bentong plants, Malaysia with a total capacity of generating up to 10 MWp of energy. State-of-the-art Regional Distribution Centre at Rojana, Bangkok with sophisticated Automated Storage Retrieval System (ASRS). Newmanufacturing line at Rojana Plant, Thailand to produce our first milk tablets, Magnolia Milkies. PROCESS INNOVATION Our R&D and Manufacturing teams constantly seek out the most up-to-date technical and scientific advances to improve the efficiency of our operations while minimising environmental impacts. Over the years, we have implemented innovative technologies to reduce post-consumption waste and automate processes to enhance efficiency. Optimising Operational Efficiency through Our New Regional Distribution Centre This year, we invested in a new regional distribution centre (RDC) in Rojana, Ayutthaya Province, Thailand, equipped with 287 million THB ASRS. Strategically located 1.7 kmfromour dairiesmanufacturing plant inRojana, Ayutthaya Province, the 20,000 square metres RDC is expected to be operational in 2021. This RDC will serve as our regional distribution hub for F&N Dairies Thailand (FNDT)’s products. Apart from optimising and reducing operational costs, and meeting storage capacity demand with smaller space requirement, the ASRS enables centralised inventory which will enhance stock management accuracy. Additionally, the systemwill create a fully integrated distribution centre with an enterprise resource planning system and efficient information flow. We will also be installing the same ASRS in our new warehouse in Shah Alam, which will be operational in 2021. Driving Economic Value 046 FRASER & NEAVE HOLDINGS BHD