Fonterra signalled its intention to expand in the Malaysian cultured food market today (27 October) with the unveiling of a NZ$12m (US$8.98m) plant expansion.

New Zealand prime minister John Key and Fonterra chairman Sir Henry van der Heyden officially opened the extension to Fonterra Dairymas cultured foods plant in Kuala Lumpur.

"The prime minister was in Malaysia for the signing of the Malaysia-NZ Free Trade Agreement and also visited Fonterra's Dairymas site to officially open its expansion and upgrade," a spokesperson for the company told just-food.

The company said the investment in additional capacity at Dairymas would allow Fonterra to capitalise on the fast growing, cultured dairy category in Malaysia. The capacity expansion will allow Fonterra to produce greater volumes of its Solivite and CalciYum brands.

Speaking at the event, Sir Henry said the investment was an "excellent example of how the co-operative was adding value and growing earnings for New Zealand farmer-shareholders. Our operations in Malaysia are based solely on New Zealand milk, which we then further process in market to add further value". 

Fonterra's earnings from the Asia/Africa Middle East region were up 19% in the 2008/09 financial year, while revenues were up 22%. Cultured dairy product sales grew 71%.

Mark Wilson, regional MD for Fonterra Asia/Africa and Middle East said: "There is huge opportunity for Fonterra in Malaysia where, with a climate not suited to dairying, they rely upon imports to meet over 95% of domestic dairy consumption."