Fonterra to boost Malaysian output

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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 (NZ$9.8m) upgrading its plant there, general manager John McKay said 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.

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

The overall dairy market in Malaysia is expected to continue expanding at an annual growth rate of 4 per cent to 5 per cent.

Fonterra Brands is the largest dairy supplier in Malaysia, with a 64 per cent market share. It regards Malaysia as a key test market for Southeast Asia.

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

NZPA