Fraser & Neave Holdings Bhd (F&N) is optimistic about breaking even within 3-5 years for its RM1.8 billion (US$416.4 million) AgriValley integrated dairy farm in Gemas, Negri Sembilan, as it moves forward with plans to expand herd capacity.
F&N CEO Lim Yew Hoe said the first phase involved scaling up to 10,000 milking cows, with the eventual target of 20,000 lactating cows, which is the breakeven point for Phase 2.
Lim said, “Our RM1.8 billion (US$416.4 million) venture reflects our long-term strategy to reduce reliance on imported dairy and improve self-sufficiency in raw milk supply. Our primary breakeven target is around 20,000 milking cows, which we aim to reach in Phase 2. For now, the focus is on achieving 10,000 lactating cows in Phase 1.”
To accelerate productivity, F&N imported only pregnant cows, ensuring immediate milk production and a rapid increase in herd population.
Lim said the current phase, with a capital expenditure of RM2 billion (US$462.7 million), was expected to produce 100 million litres of fresh milk annually.
The company has chosen Chilean cattle for their high daily milk yield, comparable to US Holstein breeds.
The Gemas farm is expected to produce 200 million litres of fresh milk annually at full scale, reinforcing F&N’s role as a leader in Malaysia’s dairy industry and its contribution to the nation’s food security agenda, added Lim.
F&N is also establishing a dairy processing plant in Cambodia under its Thai subsidiary. Cambodia is chosen as it has lower entry barriers compared to larger markets like Vietnam.
Meanwhile, F&N is also on track to commission its new beverage plant in Butterworth, Penang by August, a move aimed at improving logistical efficiency for the northern Peninsular Malaysia markets. The facility will produce carbonated soft drinks (CSD) and drinking water, thereby reducing reliance on distribution from its main plant in Shah Alam which is already at full capacity. Significant savings can be achieved as transporting a carton of 1.5-litre CSD like 100PLUS from Shah Alam to the north is quite expensive.
The new soft drink plant also aims to produce smaller SKUs for drinking water as demand for small pack sizes is increasing.
