Fonterra aims to double dairy sales

SHAH ALAM: Fonterra Brands (Malaysia) Sdn Bhd expects to double the volume of its dairy products’ sales this year, given a consistent growth in demand for its products here.
Fonterra Brands Malaysia managing director Jose Miguel Porraz told SunBiz during an interview recently that the company sold the equivalent of about 1.9 million dairy servings every day, as of November last year.

Porraz said the dairy servings include Fonterra’s consumer branded and food service products, under the Anchor, Fernleaf, Anlene, Anmum, Mainland and CalciYum brands.
“Since setting foot here, we have been consistently growing demand for our brands, which is also because Malaysia has a huge appetite for dairy.
“Our aspiration is to hit that 30 million (of Malaysian population). So, we see a lot of opportunity to double the growth of our volume,” Porraz added, noting that its adult milk brand Anlene, is the number one high calcium milk product in the country.
According to Porraz, Malaysians consume 44 litre of milk per person annually, which is about half of the world average of over 100 litre per person per year.
“And our view is that it will continue to grow, because when we look at Malaysians’ consumption, it is still very modest actually.”
“It’s only about one third short of what Singapore does. They drink around 65 litre per capita per year,” he noted.
Commenting on the impact of the weakening of ringgit, Porraz explained that it has resulted in an increase in its cost of goods, as the company purchases most of its raw ingredients in US dollars.
“When we buy milk powder from New Zealand, it is always denominated by the US dollar per metric tonne. Therefore, every cent of devaluation of the ringgit has impact in increasing our cost of goods,” he added.
To counter and mitigate the impact, Porraz said the company is continuously looking to be more efficient in managing its costs, without having to increase its product prices.
“The challenge from our perspective now is how we can be more efficient in the way that we operate, so that we don’t have to ask consumers to pay more for their dairy nutrition.”
“Because we know that if we can track the solution and deliver them the products at affordable prices, that’s when they will enjoy our brands more and support the growth aspiration that we have,” he said.
Currently, Fonterra Brands Malaysia has two manufacturing facilities here, with the capacity to process 10,000 metric tonnes of dairy products per annum. The products are consumed locally and exported to markets across Southeast Asia and the Middle East.
The company, which is a subsidiary of New Zealand Milk Ltd, began its operation in Malaysia in 1975. It manufactures and markets a range of dairy products including infant formula, maternal formula, yoghurt and cheese.