Global conference update: Fonterra does ‘co-operative business’ in SE Asia

10 Aug 2020

With the Alliance’s Global Conference taking place in Malaysia in November this year, delegates will get the opportunity to learn more about successful co-ops operating in the country. The dairy sector makes a good case study.

While Malaysia is only 6% self-sufficient in dairy production, it is a top ten dairy exporter by volume due to its focus on re-exporting. Malaysia’s per capita dairy consumption is higher than for other Asian countries, standing at over 50kg per year, mainly in the form of drinking milk and yoghurt.

2017 marks the 40th anniversary of the Malaysian branch of dairy co-op Fonterra. New Zealand’s biggest exporter, Fonterra has recently invested NZD $6.43m to improve its two Malaysian production plants. Chief executive Theo Spierings described Malaysia as a “priority market”.

Since opening its first dairy facility in Susumas in 1992, Fonterra has continued to invest in the country, which is now one of its four main markets; the dairy giant plays a leading role in its home country, New Zealand, and has a strong presence in the Chilean and Sri Lankan markets.

Around 95% of Fonterra’s products are exported, half of which pass through Malaysia for value added processes before being sent to other countries. Asia accounts for 20% of Fonterra’s NZD $1bn profits, with Malaysia playing a key role in production. 

Malaysia is also home to Fonterra’s Global Business Services Asia, its shared services centre that supports the co-op’s businesses across the region. The dairy business supplies 20,000 local retail outlets, runs two manufacturing facilities and employs 680 people in Malaysia.