F & N comprehensive dairy cattle ranch will be operational in 2025.

At the '2024 First-Half Financial Year Report Meeting' held by the group in Kuala Lumpur today, it was disclosed that the farm will initially introduce 2000 dairy cows, each capable of producing up to 30 liters per day.

At the same time, the farm will be implemented in 2 phases, occupying a total of 809.37 hectares. Currently, about 404.69 hectares are in the civil engineering stage, which is an area that has not started construction yet.

The group's CEO, Lin Youhe, stated that the farm will set aside 3 reserved areas for purposes such as grazing land for dairy cow feed. He also mentioned that in the future, they may be able to raise as many as 10,000 cows, and the farm area may expand to 2428.11 hectares.

However, the group will not hire too many personnel, even though the farm may reach the aforementioned scale in the future. The company chooses to use automation.

Lin Youhe also mentioned that the group has sent representatives to the U.S. for inspection, and they have previously selected suitable cows.

Recently, there have been frequent cases of bird flu in several states in the USA. It spreads from wild birds to poultry and dairy cows. When asked, Lin Youhe stated that the cows imported by the company will ensure they are brought in from non-epidemic areas into Malaysia.

In the initial stage of farm operation, the group plans to export milk to neighboring countries Singapore and Cambodia; in the next phase, they will further expand to other markets in the Indochina region, and even to Hong Kong and Macau.

Lin Youhe estimated: "Each cow can produce up to 30 liters of milk per day. In other words, this scale can supply over 20 million liters of milk to the local and international markets annually."

"In the first phase, we expect to export 0.1 billion liters; in the next phase, an additional investment of 0.1 billion ringgit is needed to achieve an export volume of 0.2 billion liters."

F & N's strong revenue performance in the first half of the 2024 fiscal year, with a significant contribution from Thailand and strong sales domestically during festivals. Looking ahead, the group will carefully ensure performance in the second half of the fiscal year, focusing on increasing non-festive sales of its brands in long-term development.

In February of this year, the group also announced plans to invest $37.5 million (approximately 0.1 billion 79.5 million ringgit) to establish a new factory in Cambodia, focusing on strengthening its dairy product business.

Lin Youhe said: "The industrial land covers an area of ​​about 0.03 million2200 square meters, aiming to establish a local operation base in Cambodia to stabilize the supply chain."

In addition, F & N will focus on optimizing fixed assets within the next 3 years, meaning that no new expansion investments will be announced within 3 years.

Lin Youhe explained: "Currently, the group can increase the fixed asset turnover rate (FAT) by 50% to 60% without huge capital expenditure, which is considered the best way to expand revenue."

On the other hand, despite the soaring prices of commodity, F & N has no intention to raise prices, emphasizing that price increase is the last option for the group.

F & N's Chief Financial Officer, Zhang Yanyao, stated: "The group adopts commodity hedging strategies, controls costs, and adds profit from the investment portfolio, so raising commodity prices has always been the last option for the group."

Lin Youhe also explained that while the overall prices of commodities have improved this year, prices of a few commodities such as sugar, rice, palm oil, gelatine, iron ore, and cocoa powder are expected to remain high in 2024.

Commodity prices are high and raw material costs have increased, impacting F & N's white sugar costs, which have increased by 60 million ringgit compared to last year.

Following that, there are white sugar costs (0.5 million Ringgit), gelatin (5 million Ringgit), and cocoa (4 million Ringgit).

Welcome everyone to leave comments and interact below the post.