Fraser & Neave Holdings is moving into dairy farming with a new farm in Malaysia.

The farm in Gemas in Negeri Sembilan will be spread over 2,726 hectares and will eventually house 20,000 milking cows, producing 200 million litres of fresh milk annually. The company is aiming to sell the milk in Malaysia and international markets.

Fraser & Neave Holdings said it is looking to invest at least RM1bn ($216m) into the first phase of the development of the farm.

The processing and packaging of the milk will be carried out on-site.

“Operationalising the integrated dairy farm will result in a vertical integration of F&NHB’s business and operations, reducing our reliance on imported milk for downstream production and distribution. This integration will also help lower the cost per litre of fresh milk, benefitting Malaysian consumers,” Fraser & Neave Holdings CEO Lim Yew Hoe said. “We also aim to export fresh milk, potentially making Malaysia a net exporter of fresh milk in the future.”

Lim said by reducing the need to import milk, the group will also be able to reduce its overall carbon footprint due to the decreased need for transporting materials from overseas.

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“The farm will also be designed around sustainable farming and circular economy practices, employing green technology throughout the farm’s processes,” said the press release.

Publicly-listed Fraser & Neave Holdings is a soft drinks and dairy manufacturer marketing products in Malaysia and Thailand. Its brands include 100Plus isotonic beverages and Gold Coin milk.

The company also has a halal-food business, set up after the acquisition of a majority stake in Malaysia’s Sri Nona Group in 2021.