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Fonterra invests in growing Malaysian market

By Guy Montague-Jones , 28-Oct-2009
Last updated on 28-Oct-2009 at 15:23 GMT

Fonterra has completed a NZ$12m plant expansion in Malaysia as the dairy market in the country grows in sophistication.

The Dairymas site in Kuala Lumpur was first opened in 1999 as a yoghurt and UHT manufacturing plant but has since diversified. As of last year the plant has turned its production focus to yoghurt brand CalciYum, milk drink Solivite and the Anlene yoghurt range.

New packing facilities

By expanding the plant Fonterra hopes to facilitate the growth of these brands. The upgrade will add a second line for cultured milk drink packing, form-fill-seal yoghurt packing and coolstore expansion.

New cultured dairy products have already taken root in the Malaysian market. “We have doubled the size of the market with the introduction of Fernleaf CalciYum, which is now the No. 1 yoghurt brand in Malaysia,” said Mark Wilson, regional manager director for Fonterra Asia/Africa and Middle East.

Market growth

With the site expansion, which was funded from cash flow savings, Fonterra expects to feed continued growth in the cultured dairy category. Fonterra said the cultured dairy market in Malaysia is expected to grow in double digits over the next couple of years, well beyond the 4-5 per cent annual growth predicted for the overall dairy category.

The Malaysian climate is not best suited to dairy farming so Fonterra will source all necessary milk from New Zealand.

Fonterra chairman Sir Henry van der Heyden, who opened the expanded Kuala Lumpur site with New Zealand Prime Minister John Key, said: “We are taking New Zealand milk and tapping into new categories by turning it into higher margin products.”

Regarding future projects in Malaysia, van der Heyden said he hoped the signing of the Malaysia – New Zealand Free Trade Agreement this week, would encourage more commercial investment in Malaysia.

“Fonterra will certainly be looking into where we can invest further in this high growth market,” he said.

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