Fonterra eyes doubling output in Malaysia 

Source: Reuters

Fonterra plans to more than double its production capacity for cultured products in Malaysia to about 20,000 tonnes a year.

Fonterra Brands (M) Sdn Bhd has spent 25 million Malaysian ringgit ($NZ9.8m) upgrading its plant there, general manager John McKay told The Star newspaper in Kuala Lumpur.

"We expect to (increase) production capacity to about 20,000 tonnes of cultured products," he said at the opening ceremony for the plant.

The upgrade has added a second line for cultured milk drink packing, form-fill-seal yoghurt packing and coolstore expansion.

McKay said he expected the cultured dairy market to contribute 17% to Fonterra Brands Malaysia's overall turnover next year as it targeted double-digit business growth.

The overall dairy market in Malaysia is expected to continue expanding at the historical 4% - 5% annual growth.

Fonterra Brands is the largest dairy supplier in Malaysia, with a 64% market share, and regards the country as a key test market for its products in South East Asia.

McKay said the company is a leading player in the prenatal, full cream and adult milk categories, with Anlene having a 77% share of its market segment, Anmum 80% and Fernleaf CalciYum over 30%.

The plant expansion was formally opened by Prime Minister John Key and Fonterra chairman Sir Henry van der Heyden after New Zealand signed a free-trade agreement with Malaysia at the weekend.

Mark Wilson, regional manager director for Fonterra Asia/Africa and Middle East said: "There is huge opportunity for Fonterra in Malaysia where, with a climate not suited to dairying, they rely upon imports to meet over 95% of domestic dairy consumption."

Wilson said the cultured dairy market in Malaysia was expected to grow in double digits over the next couple of years, and Fernleaf CalciYum, which is now the number one yoghurt brand in Malaysia.

The Dairymas site in Kuala Lumpur was first opened in 1999, as a yoghurt and UHT manufacturing plant, but last year shifted its production focus to a milk drink, Solivite, the Anlene yoghurt range, and the cultured CalciYum snacks.

Fonterra Brands Malaysia recorded a turnover of 500 million ringgit in the year to July 31.