This article first appeared in The Edge Malaysia Weekly on August 4, 2025 - August 10, 2025

JOHOR-based dairy product specialist Farm Fresh Bhd (KL:FFB) is going all out to expand its product portfolio, scale up production capacity and plant its flag in new markets in the region.

No longer just a fresh milk player, the company now counts growing up milk, cultured milk, flavoured milk, plant-based milk, chocolate malt, milk powder, butter, ice cream, yogurt and yogurt drinks on its growing list of more than 200 stock keeping units (SKUs) — with more to come.

In the financial year ended March 31, 2025 (FY2025), Farm Fresh booked a 21.1% jump in revenue to RM981.18 million and a 67.5% surge in net profit to RM106.39 million.

The stronger financial performance was attributed to higher commercial ultra-high-temperature (UHT) sales, hotel, restaurant and café (Horeca) and minimart sales, along with the full-year sales contribution from its ice cream division, with The Inside Scoop Sdn Bhd and Sin Wah Ice Cream Sdn Bhd further strengthening its profit margins.

But beyond the numbers, the group has entered a pivotal phase, executing multiple growth initiatives, including launching operations in the Philippines, doubling freezer coverage for consumer-packaged goods (CPG) ice cream, and ramping up dairy production at its expanded Muadzam Shah farm in Pahang.

Building on the successful recovery in FY2024, Farm Fresh co-founder, group managing director and CEO Loi Tuan Ee acknowledges that FY2025 has been “quite a year” for the group, filled with new developments and robust growth.

“With a strong pipeline of product innovation, expanding regional footprint and ongoing capacity enhancements, we believe Farm Fresh is well positioned to deliver another strong financial year and to lay a solid foundation for sustained long-term growth,” he tells The Edge in an exclusive interview.

Farm Fresh has seen compelling growth in the group’s Malaysian revenue, he says, which surged 25.8% in FY2025. Positive sales contributions were coming from its favourable new product mix, with children’s milk, chocolate malt, full cream milk powder, CPG ice cream and butter.

“While we will not be able to provide any guidance in terms of revenue and profit forecast, we are looking to continue our high growth trajectory with the category expansion of our products, led by our Farm Fresh Grow, Choco Malt, as well as our CPG ice cream,” says the 62-year-old tycoon.

“Certain other categories such as butter, cultured milk and high-protein milk will also incrementally add to our growth, along with geographical expansion in the Philippines.”

Farm Fresh began its operations in the Philippines, where the group commenced its production facility for pasteurised milk at San Simon, in September 2024. Since then, it has been distributing products through major retail channels across the country.

Loi says that even before setting up the San Simon plant, Farm Fresh had made significant inroads into the Philippines. Its ready-to-drink (RTD) chilled products, UHT products and milk powder products are now present in almost 400 modern trade outlets and cafés in Manila.

“Initial sales performance has been encouraging, and we anticipate stronger contributions in the coming quarters as brand awareness builds,” he says.

Farm Fresh is also working to establish a farm and factory in Indonesia, as well as to export its UHT products to the world’s largest archipelagic state.

“Both the Philippines and Indonesia are strategic markets for us that will play a key role in driving our long-term regional growth,” says Loi.

Meanwhile, Farm Fresh is planning to increase its distribution penetration in Sabah and Sarawak via its newly incorporated subsidiary Farm Fresh Borneo. With its own subsidiary, the group will be able to rapidly increase distribution drop points for its chilled, UHT, ice cream and powder products.

Loi, who grew up in a small town in Perak, purchased a small parcel of land in Johor in 2010 and imported 60 Holstein Jersey cows from Australia to set up The Holstein Milk Company Sdn Bhd. The company was later renamed Farm Fresh.

Through his family’s private vehicles, the farmer turned entrepreneur owns the lion’s share or 40.16% equity interest in Farm Fresh. Together with his siblings, Loi is the country’s 46th richest person, with a net worth of US$390 million (about RM1.65 billion), according to Forbes’ list of Malaysia’s richest.

Suffice it to say, Farm Fresh is a stock favoured by institutional investors. The Employees Provident Fund holds a 9.61% stake in the home-grown milk company, followed by Retirement Fund Inc or Kumpulan Wang Persaraan (Diperbadankan)  (KWAP) at 9.44%, Abrdn Malaysia Sdn Bhd with 9.22% and its pre-listing investor Khazanah Nasional Bhd holding 6.48%.

The share price of Main Market-listed Farm Fresh had gained 13.5% over the past 12 months to close at RM1.76 last Wednesday, giving the company a market capitalisation of RM3.3 billion.

The counter is currently trading at a historical price-earnings ratio (PER) of 31.2 times, based on its record high profit of RM106.39 million for FY2025.

According to AskEdge data, Nestlé (M) Bhd (KL:NESTLE) shares are trading at a significantly higher PER of 51.5 times. In comparison, Fraser & Neave Holdings Bhd (KL:F&N) has a more moderate PER of 20.5 times, Dutch Lady Milk Industries Bhd (KL:DLADY) at 18.4 times and Able Global Bhd (KL:ABLEGLOB) at just 6.8 times.

In terms of farming capacity, Loi highlights that Farm Fresh has undergone the Phase 2 expansion of upstream operations at its Muadzam Shah farm, following an additional 500 acres of land leased from the Pahang government. An estimated 100 to 120 jobs will be created.

“The new farm commenced operations by welcoming the arrival of 1,300 dairy cows back in May. We expect to add another 10 million litres of fresh milk supply annually upon full completion of the farm, which is estimated to contribute an additional 10% to Malaysia’s fresh milk self-sufficiency level, which currently stands at 62.4%,” says Loi.

He observes that the Horeca segment, which has recovered strongly from the Covid-19 days, continues to be important to the company and has expanded further with Farm Fresh’s recruitment of new customers.

For FY2025, the Horeca segment contributed about 31% to Farm Fresh’s Malaysian revenue. The group now serves 10 hotel chains, 14 café chains and has 24 distributor agents.

Other than Shangri-la, YTL, Genting, Sunway and Marriott hotels, Farm Fresh products have also penetrated Hilton Hotel and Resorts (14 hotels in its group in Malaysia), Dorsett (eight hotels), Royale Chulan (seven hotels), Swiss-Garden (six hotels) and Crystal Crown (five hotels).

“For cafés, we have 14 major chains with more than 3,000 outlets across the country, including Tealive, Zus Coffee, Secret Recipe, The Coffee Bean & Tea Leaf and Kopi Kenangan. We are looking to add more café chains and expand further into aviation next, and hospitals too,” says Loi.

In February 2023, Farm Fresh announced its plan to acquire a 65% stake in ice cream chain store operator The Inside Scoop for RM83.9 million in a cash-plus-shares deal. The acquisition was completed about three months later.

Subsequently, in October 2023, Farm Fresh acquired a 70% stake in Sin Wah, a local aiskrim potong maker, for RM28.4 million.

Following the acquisition of Inside Scoop and Sin Wah, Farm Fresh’s ice cream division has become a core revenue contributor to the group, contributing 10% to its turnover in FY2025.

“We expect the ice cream contribution to grow further as we increase our production capacity in Taiping [Perak]. And in 2026, the completion of our new manufacturing hub in Enstek, Negeri Sembilan, will enable us to produce more than one million pieces of ice cream a day,” says Loi.

Since the introduction of its CPG ice cream in August 2024, Farm Fresh has seen overwhelming response from consumers. In fact, the group has had trouble keeping up with the demand, even for just 99 Speedmart.

“Because of that, we expedited the expansion of our ice cream production capacity at our Taiping plant and have been able to expand our distribution to petrol stations and some modern trade outlets like Aeon,” he says.

“Given the additional production lines as well as the slated completion of our Enstek Plant, we believe that we are in an optimum position to further grow this segment. And in tandem with the growth, we will utilise more capital expenditure (capex) on infrastructure such as freezers over the next couple of years.”

Loi says Farm Fresh’s priority right now is to bring in more new SKUs for ice cream and increase the freezers to enable the group to increase its distribution penetration, while capturing more market share in the RM1.3 billion market in Malaysia.

“The reception to our CPG ice cream under the Cream Hauz brand has been highly encouraging. It is regularly sold out at 99 Speedmart. This positive consumer response reflects how our brand strength transcends beyond RTD beverages into the CPG ice cream category. It also vindicates our decision to acquire Inside Scoop and Sin Wah, while expanding into the packaged ice cream segment,” he adds.

Farm Fresh aims to increase the number of freezers across the country.

“At the moment, we have in our network about 10,000 freezers, including those we own at 99 Speedmart and those owned by our distributors in other minimarts and general trade. We will invest in additional capex to increase the [number] of our freezers to about 20,000 in three years to accommodate more products that are anticipated to be produced,” says Loi.

“CPG ice cream is a game of real estate, where to drop your products, you would need to have freezers. This is where Sin Wah comes in, to have a ready presence of freezers across convenience stores and minimarts across the country.”

Today, Farm Fresh has grown into a fully integrated dairy and consumer food company with a comprehensive product portfolio. Looking ahead, one of the group’s key priorities is to scale up the newer segments in its portfolio, he says. For instance, Farm Fresh’s ice cream and powdered milk products should penetrate deeper into the mass-market segment.

“Our CPG ice cream business continues to show strong progress, supported by our expanding production capacity and the upcoming launch of new moulded sticks and new flavours,” says Loi.

“At the same time, we are doubling our butter production to cater to increasing market demand, reflecting the growing traction of our value-added dairy products. Other new products will include a high-protein low-lactose chilled product, fortified milk, UHT choco malt and chilled cooking and whipping cream.”

Apart from these, Farm Fresh is also advancing its product innovation pipeline, with new developments such as plant-based products focusing on soya bean and tofu. 

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