Nestle Malaysia to sell chilled dairy business to Lactalis for US$40m

MALASYIA – Lactalis, the world’s largest dairy firm, haS agreed to buy the chilled dairy business of Nestle in Malaysia, which generates revenues of US$24 million, in a deal worth around US$40 million.

According Reuters, the deal is expected to take effect next January, following the earlier acquisition by Lactalis of the Stonyfield organic yoghurt brand from Danone and the purchase of siggi’s, a U.S.-based maker of Icelandic yoghurt.

According to a statement from Nestlé, Lactalis plans to establish Malaysia as the operations hub of its dairy business in Asia following the transaction, with plans to “drive growth through an expanded portfolio of exciting new products.”

“This move is an investment to further strengthen our presence in Malaysia.

The Milo plant in Chembong is an integral part of the Company’s business, supplying Milo domestically and contributing exports to over 20 countries,” said Alois Hofbauer, CEO of Nestlé (Malaysia) Berhad.

“Through the concentration of our MILO operations and our investment of over US$24 million 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.”

As a result of the divestment, Nestlé will invest US$24 million to expand its Chembong Milo production facility, which will establish the site as the world’s largest Milo factory.

Nestlé Malaysia will also move all existing Milo manufacturing operations from its Petaling Jaya factory to consolidate and expand Milo production at the Chembong Factory.

“This will help us to better meet growing local and export demand.

Nestlé remains positive on the Malaysian market and Malaysia as an export hub and we look forward to unlocking more growth opportunities in the future,” added Alois.

We see great potential that these investments will allow us to strengthen our focus on strategic core businesses that can deliver good long-term growth and are aligned with evolving consumer needs.

At the same time, this initiative will pave the way for the Chilled Dairy business and PJ factory to flourish under the new leadership of Lactalis.”

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