(Nov 21): Malaysia’s largest dairy producer Farm Fresh Bhd is stepping up its expansion across Southeast Asia to grab a bigger slice of the region’s more than half a billion consumers.
The company has built a presence in the Philippines and recently seized an opening in Cambodia after border tensions with Thailand disrupted milk supplies and is preparing to open a plant in the country. It is now eyeing opportunities in Indonesia, where it sees room for rapid growth amid President Prabowo Subianto’s US$30 billion ($39.24 billion) free lunch plan and ambitious economic targets.
Farm Fresh has applied to set up a 230-hectare (568 acres) farm in Bandung on Indonesia’s island of Java and is on the lookout for potential partnerships to establish local distribution. “The growth can be quite big” in these markets in three to five years, group managing director and group chief executive officer Loi Tuan Ee said in an interview on Wednesday.
The regional push is central to Loi’s goal to sustain 10% to 20% annual growth even as revenue is expected to top RM1 billion this financial year. Macquarie Group Ltd recently raised its earnings estimates for Farm Fresh, citing easing cost pressures and overseas expansion among key drivers.
“Malaysia will still remain an important market for us,” Loi said. But “five, 10 years down the road, the regional contribution will be far bigger than Malaysia. That’s what we hope to achieve”, he said.
Loi, who started the company in 2010 with 60 imported cows from Australia, is also actively expanding into new product categories to capture market share. Its widening offerings include chilled milk, UHT milk, ice cream, butter and infant formula.
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“I also want to start a plant for cream cheese,” he said. Such products, developed in Malaysia, can be easily shipped to the other markets, the founder added.
Malaysia currently makes up about 85% of group revenue, which rose 21% year-on-year to RM981 million ($309.82 million) for the financial year ended March 31, 2025. Net profit jumped 67% to RM106 million. Farm Fresh is scheduled to release second-quarter results next week.
Farm Fresh shares have climbed more than 30% this year, boosting the value of Loi’s roughly 40% stake — held with his siblings — to around US$440 million.
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Khazanah Nasional Bhd, an early investor in the company, has also reaped gains. The sovereign wealth fund is said to have made close to RM900 million after progressively selling off its 30% stake. Khazanah did not immediately respond to a request for comment.
To be sure, consumer sentiment remains uncertain as the impact of US tariffs ripples through regional economies. Growth in the Philippines, where Farm Fresh has production facilities, has also slowed sharply. Meanwhile, fluctuations in raw material prices may weigh on margins.
Still, Farm Fresh is likely to benefit from local brand momentum in Malaysia as consumers seek less expensive domestic products, Macquarie analyst Amanda Foo wrote in a note at the end of October. A consumer survey “indicates 74% of Malaysians have traded down to cheaper brands in at least one category over the last 12 months. This environment is favourable for Farm Fresh”, she said.
The company is poised to commence operations in its factory in Cambodia in April, and has plans to establish farms in the country in one to two years. These may eventually serve the northern markets of Vietnam and Laos.
Growing a business “is like cycling uphill”, said 62-year-old Loi. “You cannot stop pedalling.”
Uploaded by Tham Yek Lee
