Leading Palm Oil Producer in Malaysia Ventures into Dairy Farming

May 2020

FGV Holdings Bhd (FGV), one of the world’s largest producers of crude palm oil (CPO), has ventured into the local food and beverage industry in Malaysia through its subsidiary FGV Dairy Farm Sdn Bhd’s acquisition of RedAgri Sdn Bhd. This marks FGV’s first foray into dairy farming and fresh milk processing as part of its goal to be an integrated agri-food business entity. The other key components of its agri-food business are animal nutrition, paddy & rice, and cash crops, which includes MD2 Pineapples and Cavendish Bananas.

FGV stated that the MYR 10 million (USD 2.4 million) acquisition of RedAgri, owner of the Bright Cow brand of dairy products, would enable the group to create more value from its existing resources and tap into synergies within the palm-based circular economy. This will also contribute to the national food supply security’s agenda as the company is targeting to supply over 10 million liters of fresh milk annually. RedAgri currently process 4,000 liters of fresh milk a day, which will be increased to 20,000 liters a day by 2022. Malaysia currently imports about MYR 3.9 billion (USD 900 million) worth of dairy products a year, as local production amounts for only 67.1 million liters annually, or around 60% of domestic demand.

FGV is currently building an integrated factory for the production of fresh milk-based products at its Linggi farm in Negeri Sembilan state. The factory is expected to be completed within six months. FGV Dairy Farm has also imported 122 Jersey Friesian and Holstein Friesian dairy cows from New South Wales, Australia in March 2020 as part of the expansion plan.

(Sources: The Sun Daily; The Star; FGV Holdings Berhad)

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