According to the company, the consolidation is considered part of its ‘Group Long-term Vision 2026’, which incorporates structural transformation, production structure evolution and the optimisation of product mix within the Beverages and Desserts category.
“This initiative will realize concentration of our management resources and high productivity through the consolidation of production functions,” said Keiji Nishio, Megmilk Snow Brand Representative Director and President.
“We will then promote structural transformation of the Company’s Beverages and Desserts business to achieve the creation of value in milk and an increase in demand for milk and milk products.
“This will contribute to reinforcement to the foundations of dairy farming production in Japan and its sustainable development.”
The restructuring will mainly be concentrated at the company’s existing plants in the Chubu region, which are the Toyohashi Plant and Nagoya Plant. Production activities will be centred at the Toyohasi Plant, whereas this will be ceased for the Nagoya Plant.
“We will [invest in the] production of chilled milk and milk beverages in our Toyohashi Plant that currently produces LL creams and LL desserts to build an efficient production structure in the Chubu Region based on this concept,” said Nishio.
“[Some] of the manufacturing buildings in Toyohashi Plant [will be expanded].”
“Meanwhile, we will end production at our Nagoya Plant [and] will use it as a delivery base for our chilled products for the time being.”
Construction of the new features in the Toyohasi Plant are scheduled to commence in March 2019, and operations are expected to start in April 2020.
Megmilk Snow Brand’s global and R&D-centred dairy focus
Megmilk Snow Brand is especially known for its skim milk, butter and margarine products. According to company numbers released in April 2018, it is the market leader for skim milk, butter, margarine, and cheese in Japan, at 47%, 32%, 37% and 18% market share respectively.
Globally, the company also operates in Malaysia, China, Hong Kong, Taiwan and Australia for dairy products and infant formula. It also runs a processed cheese business in Indonesia and a seed business in the United States.
The company has a strong focus on research and development, owning three research institutions which conduct R&D for both its dairy products and beverage and dessert segments. These are the Milk Science Research Institute, Sapporo Research Laboratory and Cheese Research Laboratory, all located in Japan.
“Our business environment is changing dramatically, and the rate of change is increasing drastically and more speedily,” said Nishio.
“Against this challenging backdrop, we consistently pursue research involving milk, hone our products development capability and add value to the milk supplied by dairy farmers so that we can provide products to satisfy consumers.”