I Never Thought We Would Become Farmers," Says F&N CEO

Firm Is Developing Its First Large-Scale Dairy Farm in Malaysia in Its Bid to Go Upstream

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Citrus farms in Florida have been battered after two hurricanes in two weeks swept over the southeastern coast of the US between September and October.

One of the world's largest citrus producers, Florida expects crop yields in 2024 to be at their lowest in close to 100 years after Hurricane Helene and Hurricane Milton tore through the state.

This has exacerbated beverage manufacturer F&N's difficulties in securing its supply of orange juice, said its chief executive Hui Choon Kit in an interview with The Business Times.

"The prices just keep going up, and we have no choice but to pass them on to customers. So that is something that's very real to us, and the only thing we can do right now is look for alternative sourcing or alternative countries," he added.

Securing a continued supply of raw materials for the long term has been F&N's primary focus in managing its climate-related risks over the last few years.

Supply chain disruptions during the Covid-19 pandemic and uncertainties in the production of raw materials due to the increasing frequency of severe weather events have led Mr Hui to turn to local sourcing as a key risk management strategy.

"If I cannot get my raw materials, our factories will go down. We need to make sure that we have sources of supply that can take us through the next 20, 30, 40, 50 years. Otherwise, we have to close shop," he said.

To this end, the company is in the midst of developing its first large-scale dairy farm in Malaysia in its bid to go upstream.

Construction of the first phase of the farm is expected to be completed soon. But F&N has announced that milk production, which was originally intended to begin in January 2025, could be delayed by between six and 12 months, as the Malaysian government has suspended the import of dairy cows from the US due to an avian flu outbreak.