F&N milking it for all its worth

The biggest challenge remains the climate.

IT will be interesting to see whether Fraser & Neave Holdings Bhd’s (F&N) ambition to eventually produce up to 200 million litres of milk annually will be realised, despite the climate conditions affecting its 2,726ha integrated farm in Gemas, Negri Sembilan, which boasts ideal soil.

Earlier this week, the company welcomed the first 2,500 dairy cows from Chile, part of what will eventually be a herd of 20,000.

Production was supposed to start at the beginning of this year, but was delayed after the permit to bring in 2,500 cows from the United States was cancelled due to an avian flu outbreak.

F&N also plans to make animal feed its next growth pillar and has planted corn, which is expected to be harvested soon.

The company is also aiming to gain more share in the Malaysian market, where annual per-capita milk consumption is currently six litres.

It believes there is room for growth, given that neighbouring Thailand’s per-capita consumption of 18 litres and Vietnam’s is 10 litres.

However, it is yet to be proven whether the newly arrived cows, genetically sound for breeding and milking purposes, will be up to mark in being able to produce 30 to 32 litres per cow daily – double the output of Farm Fresh Bhd. As it is, Farm Fresh has a head start with a total dairy herd size of 11,852 in Malaysia and Australia, as reported in its annual report for the financial year ended March 31, 2024.

There is some scepticism surrounding the targets for milk production, which will be split between domestic consumption and exports to neighbouring countries.

The biggest challenge remains the climate, as temperate regions typically achieve better production levels and the cows remain untested.

According to the latest government data, Malaysia produced 39 million litres of milk in 2022, only slightly higher than the 38.5 million litres produced in 2018, and down from the 41.8 million litres in 2020.

Production is well below annual consumption – so the question remains: Is F&N up to the task?