Fonterra Co-operative Group, the world’s largest dairy export company, has recently invested 20 million ringgit ($4.4 million) to improve operating layouts at two Malaysian plants.
The New Zealand group’s move will boost blending capacity at the Susumas plant — its first in Malaysia, built in 1992 — and reduce dependence on third parties. The plant can produce and pack an annual 30,000 tons of milk powder for brands including Anlene, Anchor, Anmum and Fernleaf, all market leaders in Malaysia.
«We don’t have sufficient blending capacity to meet the packaging capacity,» Jose Miguel Porraz Lando, the managing director of Fonterra Brands Malaysia, told reporters recently.
«We are addressing the bottleneck [to] allow us to do blending in-house,» Porraz Lando said.
The operation has grown from distributing finished products imported from New Zealand to blending raw materials and developing new products. By installing the latest equipment, the company hopes to improve food safety and efficiency and reduce manual handling to meet the higher standards being demanded in the region.
After 40 years in the country, Malaysia is one of Fonterra’s four markets around the world where it has leadership. It has developed a wide range of chilled- and shelf-stable product brands there.
Fonterra occupies a similarly dominant position in Chile, New Zealand and Sri Lanka among the 100 countries where it has a presence. About 95% of its products are destined for export, half of which pass through Malaysia for value-adding processes before being shipped to markets across Asia and the Middle East. Over 100 products produced in Malaysia are halal-certified, making the country an important hub for exports to other Muslim countries.
Dairymas, Fonterra’s other plant in Malaysia, produces some 16,000 tons of yogurt and cultured milk a year. Product development work is also undertaken there. Anmum, a product range for expectant mothers and infants, was launched 20 years ago in Malaysia but only introduced to New Zealand last year.
Malaysia is now considered a key market where «consumer insights» can be used for broader product development. This led to «substantial business model changes» for the company last year outside New Zealand and improved cost efficiencies.
Fonterra’s Global Business Center was originally located on the outskirts of Kuala Lumpur to secure financial and human resources. It has grown to handle procurement, information management and communications technology to support group operations in China and the rest of Asia, the Middle East and Africa.
Raising dairy consumption in Malaysia remains a challenge, since the products are not part of the traditional diet. «Malaysians may eat such products in pizza and cakes but not so much in home cooking,» Porraz Lando said, noting that «we are working with chefs and food operators to help them gain confidence.» One example of innovation: adding cheese to fried rice.
The group logged revenue of 17.2 billion New Zealand dollars ($12 billion) for the fiscal year ended July 31, down 9% on the year. Sales volume, however, grew 4% to 23.7 billion liters of liquid milk equivalents.
Source: AsianReview
Link: http://asia.nikkei.com/Business/Companies/Fonterra-invests-4.4m-in-Malaysian-dairy-operations
