[0:01]Dutch Lady Milk Industries Berhad (DLMI) is set to grow and strengthen after 60 years in business with the impending relocation of its dairy milk manufacturing plant. DLMI is investing nearly 600 million ringgit Malaysia to build a new dairy factory in Bandar Enstek. According to Managing Director Ramjit Kaur Virik, the journey for the DLMI factory expansion, DLMI at Enstek, began in 2019 and it is expected to be completed next year. She adds that DLMI will be implementing Industry 4.0 technology, which aims to achieve operational excellence and efficiency to continue winning in Malaysia and future markets. DLMI will be doubling their current capacity with an addition of a land on the site to double the capacity again in the future. Ramjit says with the new factory, DLMI is committed to providing high-quality, halal and affordable nutritious products for the foreseeable future. This journey started since 2019. Back to 2019 was when the plans were sort of presented and approved by by you know, the executive board and the supervisory board that was basically from Netherlands and we broke ground and we got the land in 2020 and then of course everyone we still I hope remembers COVID so COVID hit us and actually it was delayed, we had some some challenges, I think any projects on there were always challenges but I think we were right smack during the the pandemic and also after that everyone knows the inflation hits and the costs as well. So so yeah, so actually our latest estimation was spending 540 million uh to invest in this new plant, which is above the original. That is the total investment is it? For without the land. Okay, so it's minus Land is another 60 but land is an asset, right? so Land is uh So 540 is the uh total construction. I mean you think about it Dutch Lady has been here 60 years and of course now we are building our new, we call it big blue or we call it that's a project and we call it big blue, project Big Blue, yeah.
[2:35]Good name to reflect the corporate color of Dutch Lady. Yes, yes. The big blue. So you can tell, right?
[2:43]Everything is blue, you look at our packs so we're known as even our our building is is blue and white. White represents of course milk and the blue has been our color for for many years. So it's it's a a journey and it's been and we've we still are on that journey. So the completion of the whole project will only be next year. So it's a five-year, I was I was five-year project my my own program director, right? The initial plans were 300 million and it was supposed to be completed in four years. So while this is really, yeah, it's a it's a parenting. Actually I mean who mooted this big blue project, the big blue or the board or the parent. Um if you go back to uh even before 2019, so this was back in 2018 uh actually it was the time where I I came back from my assignment. I was based in Singapore in Indonesia before and we set up let's say the new um uh business units, right? So I was heading up the consumer dairy business. And like and and the new boss the then MD was Tarang Gupta, so from there we said, okay, let's do a strategic review and I think it's it it actually started from there, right? So what is the strategic uh opportunity we see for DLMI going forward and I think through that exercise what we realized is the the importance and the growth of dairy um will continue to be there and and and therefore and we've been growing so we're very always always say I'm very grateful to the rakyat of Malaysia that they continue to to understand that milk is nutritious and they continue to have our products in their shopping baskets. And what we saw is we have been growing over the past few years and and we expected this growth to to continue and and then but when we looked across the street, we call it because the factory is there, um we realized that this factory has reached its limit. So this area has actually been redesignated to commercial mixed development commercial residential. Therefore, we could not get any more utilities. We cannot we cannot build upwards, we cannot get any more utilities, which means basically, okay, it's time for us to to move out and and that was the start of the whole uh project Big Blue, like like like the project name on uh what what so we also evaluated, could we still stay here? So there was a brown field versus a green field exercise, but then we very quickly realized with the with the space and the restrictions uh a green field was the best option. And of course we we prepared the business case as as you do you prepare the plans uh and then uh we had the let's say the Friesland Campina and of course the board the DLMI board together with the Friesland Campina executive team, so they they came here, presented the plan and that was when I said in 2019 was the official let's say uh approval to proceed and then and then the work started, you know to find the land. I think that's the the first step and that also was a process so we short listed many lots and we finally decided on Enstek for a couple of reasons. One it is the largest halal hub in the country. And you're right, the proximity to KLIA and the highway and also technically, it is next is bordered to Selangor. Although it is Negeri Sembilan, it's still border and and and more importantly, I think it was the size. We were very particular. So this land size that we have now is three times larger than than the previous site. Every time I go there, I'm like, oh my God, it's massive, right? It's it's crazy. And if you look at the picture and and I think you saw the model, did you see the other day the model, right? So when we go live next year, we we will, we will be doubling our current capacity with that with that footprint that that we see there. And actually, we have land on the side to double again. So technically, we can four times our current capacity, but of course, now we do it first for what we need, let's say for the next 10 years or so, so the business case was built with the long-term in mind and we also built it we call it linear like a line, so if you want to extend, we just go sideways. So it's it's it's a very it's this is the incoming, the raw materials for processing and then you have your filling and your packing and then the warehouses at the back and then it goes out. So that's how it's built like a line this this factory is 60 years old so it's not purpose built this is really what we're looking for for the future it's IR 4.0 state of the art and we're really looking forward to take us to that new new new level of technology and and people as well right because you also need to upskill the teams to be able to work in that new environment. So you will be based on your plan you will be able to raise production uh by double next year. So by next year, and how are you going to sell that extra? Yeah, so remember I said we started with a strategic review. So that's the start, right? And the strategic review and of course has a lot of assumptions that you build in, but I think one of the key factor that we say why we see the potential of growth in Malaysia is actually if you go back to our purpose. So our purpose is to nourish our nation and people in every stage of life. In short is nourish our nation, so that's the short version. And and I'm going to give you some statistics now so you can put it in. What what we found out through a couple of national studies is the nutritional status of Malaysian children is alarming. It's not bad, it's not the challenges alarming, so alarming is bringing the alarm bells and the previous Minister of Health also quoted this this issue. If you think about the Malaysian children, so 10 to 12 years old, 70% calcium deficiency, 84% vitamin D deficiency and and one and three don't even have breakfast before they go to school. So and if you look at this and and and what does this mean, right? This means and then there's the other so this was the IUNS study so there was a Southeast Asia nutritional survey. And then when you read the NHMS the National Health morbidity study, NHMS uh 2020 2022. So there was a previous one in 2019 and then there's a 2022. And here we we noted that Malaysian stunting rate is increasing. We are now 21.2% stunting. We used to be 19. something. And we know that facts has proven that when a nation is stunted, that means one in five Malaysian children stunted, there's a direct correlation with uh how the economy is going to develop and also you double your chances of having an obesity issues, which you know Malaysians are really having those problems in adulthood. Yeah, so if you look at these statistics and I'm a Malaysian myself, I'm a mother myself and if I look at this statistics, I feel worried for our nation. And and and and if this is the way our nation is heading from a nutritional angle, it's not going the right way. So we have to and I'm happy that the national budget, they continue to support Ministry of Health and also Ministry of Education that two biggest benefactor of of the of the budget spend, because that's where nations are built, you need the foundation needs to be strong. And then if you look, so this is the national data, but if you look at our product, actually our product a glass of milk and the and the recommendation is two glasses of milk a day. Actually, you will get the calcium that you need. We also fortify it with vitamin D. You will get the vitamin D you need, and we have products for every stage of life. And if you catch this and if you have milk in the morning before you go to school, at least something is there, you know, for you as breakfast with with maybe a bread or you know, whatever the Malaysians love to eat, Nasi lemak or whatever it is, right? You you have a meal which is has a complete nutrition, it's highly dense nutrition. And then you solve the the the stunting issue, which you need to catch at a certain age and we have like I said products that we used to we need to the whole so from from from all stages of of life that that that can help reverse, hopefully address this alarming nutritional status. So if you have this in mind, you know, Malaysia has a long way to still go to drive our nutritional agenda for Malaysians and therefore the role of DLMI as nutritious product for the nation and the growth will be here for generations to come. Growth, okay. We we wanted growth, we wanted to also um uh implement the IR 4.0 so we need to move us from a old factory, old 60 years ago and we have to let's say to the new world and that world again help us to move to the digitalization space. Um and innovation, right? Because of course with a new factory, uh we have some new, let's say uh packaging formats coming out and we also have new sizes, so I'm also looking forward for the uh for the innovation. And maybe some some site which would be very interesting maybe for your readers, we are also making this factory uh with an opportunity for people to come and visit us. Oh, that's like a study tour or something. Yeah, so in the past, I mean, we actually get a lot of requests for for visits, but this factory is not built for visitors and for safety reasons. We we we declined. So we we have building it with like a what we call a viewing deck and and let's say a visitors' center, so we call it DLX DL experience. Yes, and that will also be open in the let's say by the end of next year. We're still finalizing how and how is it going to be and how are we going to open and say, but definitely we will be able to accommodate let's say uh especially kids, lot schools. So primary target will be students. For schools and government stakeholders and also farmers, because we also are big in our dairy development programs, also farmers to come and visit. We will have like a like a farmer experience, virtual, one and mechanical one and we also have an application kitchen, because we have our professional business, the B2B side, so we will also have opportunities for let's say chefs and uh and food creators to come and play around with let's say in the in the application kitchen, that uh create a lot of what does things you can make?
[14:24]So there will be a kitchen education center. We call it application kitchen, we will also have a pilot plan for R&D where they can make. So a lot of innovation opportunities and experiences. So we'll be taking our factory from 1963 into into future future it. Anything else? I mean like will be anything surprising that we haven't said, you know, whether whether there'll be any, I mean you've mentioned for me, there there you can't tell, right? It's it depends on the market situation. It depends on effects, it depends on inflation. Yes, so it's not like um I guess uh we cannot predict for sure, right? What's going to happen over the next next let's say six months because yes, we have a planning for six months. And pricing is uh we cannot talk about it as well, right? It's an anti-competition topic that we cannot disclose. But historically can you say something that have taken compared 2020 and 2023 so far this year how much increase are we talking about what what is the industry average coming now not on specific company industry average the daily product will share the information. Nielsen has the but it's definitely has gone up it also depends by different product categories so what I can say like we have as well right which is an important product from from from the Netherlands that one has a higher increase because of it's you're bringing it from from overseas and and all that and then some of the products which are more I guess locally sourced and all right it will have a different level of increase you know but if you go to the market today I think CPI easily says I think for grocery last year was 8% I think right the consumer price index, which was higher than than I think the normal was about five or six so grocery had a high that would be a good indication. And that should be around the levels that we also price up.
