Nestlé Malaysia has agreed to offload its Malaysian chilled dairy business and its Petaling Jaya Milo factory to French dairy company Lactalis, and will use the proceeds to expand its Milo factory in Chembong, Malaysia.
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.”
As a result of the divestment, Nestlé will invest MYR100 million ($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.
Alois Hofbauer, CEO of Nestlé (Malaysia) Berhad said: “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.
“Through the concentration of our MILO operations and our investment of over RM100 million ($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. 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.
“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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