Nestle to invest RM100mil in world's largest Milo plant in Negri Sembilan

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KUALA LUMPUR: Nestle (Malaysia) Bhd will invest RM100mil from the proceeds of the RM155.3mil which it will receive from the sale of its chilled dairy and manufacturing business in the world's largest Milo factory in Chembong, Negri Sembilan.

Nestle is disposing of the business to subsidiaries of the Lactalis group for RM155.3mil cash.

Nestle had entered into an agreement to sell its business of manufacturing chilled dairy products and cold sauces and the packing of milk powder at its Petaling Jaya factory, as well as the factory along with its manufacturing fixed assets.

In a stock exchange filing, Nestle Malaysia said the sale was in line with its efforts to consolidate its Milo operations in its factory in Chembong, Negri Sembilan. 

The group said in a statement it is investing RM100mil of the proceeds of the sale to expand its Milo factory in Chembong, effectively making it the biggest Milo factory in the world.

"Through the concentration of our Milo operations and our investment of over RM100mil into the Chembong factory, we will not only be able to further upgrade production facilities and improve operational efficiencies, but also scale up capacity and make Chembong the biggest Milo manufacturing centre in the Nestlé world.

 "This will help us to better meet growing local and export demand," said Alois Hofbauer, CEO of Nestle (Malaysia).

The Milo plant in Chembong supplies Milo domestically and contributes exports to over 20 countries.

Trading in Nestle Malaysia's shares was suspended for the Tuesday session. It last traded at RM146.40 on Monday.