Nestle’s massive Malaysia Milo move: Firm’s $24m production expansion plan

By Pearly Neo contact

- Last updated on GMT

Nestle (Malaysia) Berhad will be investing over RM100mn (US$24mn) to establish the world’s largest Milo Manufacturing Centre of Excellence. ©Nestle
Nestle (Malaysia) Berhad will be investing over RM100mn (US$24mn) to establish the world’s largest Milo Manufacturing Centre of Excellence. ©Nestle

Related tags: Nestlé, Milo, Malaysia, expansion

Nestle (Malaysia) Berhad will be investing over RM100mn (US$24mn) to establish the world’s largest Milo Manufacturing Centre of Excellence, but it will also lead to Milo production at one existing site halting.

The money will be pumped into expansion works for its existing Milo factory in Chembong, Negeri Sembilan.

All Milo manufacturing operations in the country will eventually be consolidated in Chembong. Existing Milo operations in the company’s Petaling Jaya factory will be shifted over, Nestle Malaysia told FoodNavigator-Asia.

“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 Nestle Malaysia CEO Alois Hofbauer.

“Through the concentration of our MILO operations and our investment of over RM100 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 Nestle world.”

According to Nestle, this move is also part of Nestle’s investment in Malaysia as a ‘key manufacturing hub for the Nestle Group​’.

The Milo Manufacturing Centre of Excellence is expected to be completed by the end of 2019. As for intended size and capacity, Nestle Malaysia has shared with us that things are still 'in the preliminary stages [so] it would be premature to elaborate further at this juncture'.

The expansion plan is one of Hofbauer’s last hurrahs as Nestle Malaysia CEO. He will be stepping down effective November 30 this year.

Hofbauer’s successor will be Juan Aranols, who currently holds the title of Chief Financial Officer for Nestle’s Zone AOA (Asia, Oceania and Sub-Saharan Africa).

Stepping away from chilled dairy and manufacturing businesses

Nestle Malaysia has also sold its chilled dairy and manufacturing businesses, Nestlé Products Sdn Bhd (NPSB) and Nestlé Manufacturing (M) Sdn Bhd (NMSB), to French dairy company Groupe Lactalis.

According to the formal press release, Lactalis will ‘take over operations of the PJ factory as well as Nestlé’s market leading Chilled Dairy business’.

The businesses were sold for RM155.3mn (US$37.3mn). Part of this is expected to contribute to the Chembong factory expansion plans.

Trading in Nestle Malaysia shares on Malaysian stock exchange Bursa Malaysia were suspended on October 9 in relation to the acquisition.

Nestle Milo elsewhere

Meanwhile, Nestle Indonesia has also increased focus on its Milo products. The company launched an ‘improved recipe’​ Milo, boasting 25% less sugar content and enriched with malt, vitamins and minerals.

“Our commitment to enhancing quality of life and contributing to a healthier future is what motivates Nestlé’s innovation and renovation efforts in bringing in MILO with 25% less sugar to Indonesian families,”​ said Prawitya Soemadijo, Business Executive Officer, Beverages Business Unit, PT Nestlé Indonesia.

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