KUALA LUMPUR (Nov 10): Dutch Lady Milk Industries Bhd (KL:DLADY) (DLMI) is planning to acquire a 35% stake in a Johor dairy firm for RM17.5 million, giving the dairy producer more access to local fresh milk production.
The company signed a conditional share sale and purchase agreement with Kulim (Malaysia) Bhd and A2 Fresh Holdings Sdn Bhd on Tuesday to acquire a 35% stake in Jemaluang Dairy Valley Sdn Bhd (JDV). The stake will be carved out from Kulim’s existing holdings, reducing its majority stake from 65% to 30%, while co-shareholder A2 Fresh will maintain its 35% equity.
Kulim is a subsidiary of Johor Corp Bhd, the Johor government’s investment arm, with businesses in plantations and agrofood.
“The proposed acquisition will provide DLMI with access to the fresh milk segment and enhance DLMI’s ability to meet the growing demand for fresh milk,” the company said in a Bursa filing.
The investment would also strengthen its position in Malaysia’s ready-to-drink milk market, which it expects to be increasingly driven by fresh milk, the group added.
According to the group, JDV operates a dairy project in Sungai Ambat, Jemaluang, Mersing, in collaboration with the East Coast Economic Region Development Council, a federal statutory body overseeing development on the peninsula's east coast.
The farm began operations in 2025 and plans to double its herd from 1,000 milking cows to 2,000 by 2030.
JDV also intends to build a facility capable of producing between 16 million and 20 million litres of pasteurised milk annually by 2027.
Dutch Lady will fund the purchase internally and provide a RM24 million corporate guarantee for JDV’s capital expenditure financing from MBSB Bank Bhd, a unit of MBSB Bhd (KL:MBSB).
On Tuesday, Dutch Lady also signed a conditional joint venture agreement with Kulim, A2 Fresh and JDV to govern their relationship following completion. The agreement covers board appointments, matters requiring shareholder approval and restrictions on share transfers. The Johor government’s State Secretary Incorporated will hold a special rights redeemable preference share.
“As consumer preferences continue to evolve, we see opportunities to build on this legacy and further strengthen our relevance in the Malaysian market,” the group managing director Veronika Utami said in a separate statement.
“We look forward to working with Kulim and A2F to support JDV’s continued development, while exploring how our market knowledge and consumer insights can help us respond to changing needs and bring more choices to Malaysian consumers.”
The acquisition is pending approval from the project’s management committee, the ECER council, the Johor government and MBSB Bank. Dutch Lady must also execute agreements for JDV to supply raw milk to it and for Dutch Lady to distribute JDV’s finished milk products.
The conditions must be fulfilled or waived within 90 days of signing, with an automatic extension of 30 days if necessary. Completion is scheduled for the 14th business day after the agreement becomes unconditional, unless otherwise agreed.
Shares of Dutch Lady closed two sen or 0.07% lower at RM28.78 on Tuesday, valuing the company at RM1.84 billion. The stock has declined 7.64% year to date.