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Farsons Investment Programme on track 7/2/2006

The recently built Soft Drinks Packaging Hall at Farsons, Mriehel

The large excavated area for the new Farsons Logistics Centre

The building for the new soft drinks packaging hall at Farsons is ready and the Company has placed the order for the required machinery. The large site for the new Logistics Centre has been excavated, and its construction phase is already underway. This was announced by Mr Louis A Farrugia, Farsons Group Chief Executive during the 59th Annual General Meeting of Simonds Farsons Cisk plc.

“In total, the new Soft Drinks Packaging Hall and the new Logistics Centre will cost Lm11 million. We are confident that we will complete them according to plan by December 2007 and within budget,” he said. The third and final phase of the investment programme is the construction of a new brewhouse. This is planned to take place in 2009-2010.

The new Logistics Centre is expected to have a significant positive impact on Farsons’ operational efficiency. Today, the distribution of Farsons products is being done through six depots spread across the island, resulting in a significant amount of double handling of Farsons products.

Within an area of circa 12,700 sq meters, the new Logistics Centre will centralise all the Group’s beverage distribution, including new stores for Wands Ltd. and Anthony Caruana & Sons Ltd. This will result in a more efficient and leaner operation that will ensure  fresher product to consumers and a quicker service to Farsons clients.

The move to the new Logistics Centre will free the depots spread across Malta and the current Wands site. “The Board has approved a strategy whereby these sites will be prepared to be put on the market once they are vacated,” said Mr Farrugia. “These sites total in excess of 25,000 sq meters of land and include some prime locations. The capital derived from the sale of these plots of land will be used to partly fund the Farsons investment programme.

Mr Farrugia explained how the recent move into property management is yielding satisfactory results. “The Group is increasingly focussing on its property portfolio. The need to earn a good return on the considerable property value has been declared as a priority objective by the Board of Directors,” he said.

In the next five years, a sizeable amount of the current Mriehel Brewery will also be released by the Farsons Group along Notabile Road for the benefit of the Group’s shareholders.  This site is prime real estate and the Board of Directors are seriously looking at the possibility of developing a business park complemented with an area for retail outlets.

When Company Chairman Mr Bryan A. Gera addressed the shareholders, he referred to 2005 as a difficult year for the Farsons Group. He mentioned the active measures the company is taking to address the overall situation. Mr Gera said: “Through our investment programme, by re-engineering our workforce and work practices, and by exploiting our real estate portfolio we are confident that we will return to a healthy profitability within a very short period of time. We are in fact reinventing the Group’s activities and this will allow us to improve our profitability and adjust our core businesses to suit market trends.” 

He also stated that the Board was proposing a net dividend of Lm300,000, equivalent to 1c1 per share which the Annual General Meeting subsequently approved.

He said that the Board has decided to repay the 6.25% Lm2 million 2006-2008 bonds in November 2006. This will enable the Group to make further savings in costs since Farsons are now able to borrow funds at considerably lower rates of interest.

Mr Gera also recalled with sadness the demise of two fellow directors, Mr L.L. (Gino) Miceli and Mr Anthony Galdes and the contribution that they had both given to Farsons progress. He introduced Mr Alberto Miceli-Farrugia who joined the Board on 1 September 2005 and Mr Roderick Chalmers who joined the Board on 24 May this year. Finally, he thanked all Farsons Group directors, management and staff for their dedication and commitment and all the shareholders for their trust in the Farsons Group.