Farm Fresh founder Loi Tuan Ee started with 60 milk cows a decade ago. Today, he has 6,000 of them.
When Loi Tuan Ee stepped out to the milking shed at his farm in Kampung Mawai, it was a little difficult to imagine that this was the man helming one of Malaysia’s largest dairy companies.
The company’s founder was dressed simply in T-shirt and jeans. His clothes were drenched in sweat from the blistering heat while his boots were covered in mud.
Loi, 57, spends most of his days in corporate offices, speaking to lawyers, clients and employees. But when he has the time to visit one of his five dairy farms in Malaysia, he is happy to do so because they are where he feels most at home.
He started The Holstein Milk Company, and its subsidiary brand Farm Fresh, in 2008. Since then, Farm Fresh has become a household name in Malaysia, and even in neighbouring countries such as Singapore and Brunei.
Behind the brand’s growth is a story of risk taking, passion for agriculture and tapping the potential in the local dairy industry.
Loi’s journey as a milk farmer actually began as a gamble.
He had worked at a corporate job for 20 years in the food packaging industry, rising to senior positions.
Loi was thriving in his job. At one point, he was earning around RM500,000 (US$119,489) a year.
He headed a marketing department and worked with huge companies such as Sony and Panasonic.
Yet, Loi felt there was a limit to what he could achieve as an employee.
“It was a very closely-knitted family business,” he recounted, adding that as an outsider, it would have been difficult for him to take things to the next level.
He also wanted to do something related to agriculture, which he developed a passion for while growing up in his kampung in Setiawan, Perak.
“I have this love for agriculture, because of my (background) in the kampung. My parents were rubber tappers and they grew tapioca,” said Loi when interviewed by CNA.
“I felt that I wanted to come out to do something that is more sustainable. Evergreen … and resilient. And that’s one of the reasons why I opted for agriculture, to produce food products,” he added.
Loi decided to leave his job to open a dairy farm.
Looking back at this decision, Loi said that it was a risky move and he recalled how some of his friends and family had warned him against it.
They were concerned that the capital-intensive venture would not pay off.
“I think my wife was very worried. My sister was thinking, ‘Gor (brother), are you sure you want to do something like this?’. So I said (to them): ‘Let me try’.”
“A lot of my friends felt that I was crazy.”
He said that one of his friends even thought that Loi was having a “midlife crisis”.
“You give up a half-a-million-ringgit perks job and you want to raise cows?,” Loi said, recalling the words of his friend.
“They found it very amusing. But thank God, you know, I think that was a right decision and the sheer perseverance and determination to make this work has indeed paid off.”
The early days were gruelling.
While he was used to working in a cushy air-conditioned office, the milk farmer now had to ready himself for the back-breaking work of clearing land and building sheds.
In 2006, he bought around 500 acres of land for the farm in Kampung Mawai, near Kota Tinggi. The farm is a 20-minute drive from the nearest main road and has no cellular reception.
“That’s what we could afford then. When we first came in, the place was part of a forest,” said Loi.
“During the initial years, I spent a lot of time here, maybe six days a week. I would stay in that living quarters so that I could set up the farm.”
He started off with importing 60 Holstein Jersey cows from Australia.
This was tricky as the cows were not acclimatised to the tropical climate in Malaysia, and the volume of milk production was low.
He also faced issues getting loans from banks to purchase livestock and infrastructure.
“If you want to do other established industries, like palm oil, for example, the bankers are more than happy to lend you. But if you want to buy cows, they are very, very worried about it,” he added.
His big break came when Khazanah Nasional, the strategic investment arm of the Malaysian government, invested in his company.
Today, 30 per cent of Farm Fresh is owned by Khazanah’s investment vehicle Agrifood Resources Holdings.
Loi noted that he had a stroke of good luck as the opening of his farm coincided with a period when the government was looking to invest in agricultural businesses to promote national self-sufficiency.
CREAM OF THE CROP
With financial backing, The Holstein Milk Company was able to grow exponentially over a decade.
“We were doing RM9 million in business for the whole year (in 2012) and then fast forward nine years later, we are doing RM9 million business a week. So that tells you how much we have grown,” said Loi.
Nationally, Farm Fresh products grew in popularity. According to a 2019 report by AC Nielsen, the brand has the largest market share for fresh milk in Malaysia, garnering more than half of the consumer share in the peninsula.
On Wednesday (Oct 6), local media reported that Farm Fresh is set to be listed on Bursa Malaysia’s Main Market.
It has reportedly filed a draft prospectus on the Securities Commission Malaysia’s website and its initial public offering (IPO) would entail the sale of 743.18 million shares, or 40 per cent of its enlarged issued share capital.
On the export front, Loi said that Singapore is the company’s largest market, mainly due to the geographical proximity to its farms in Johor.
“We have been exporting to Singapore for the last three, four years. Of late, I think it is gaining very fast traction there as well,” said Loi.
“I think a lot of Singaporeans have started to appreciate our product and I think that in the coming years there will be a lot of effort towards Singapore,” he added.
Farm products are also exported to Brunei, while there are plans to expand to Indonesia and the Philippines.
Today, besides its pilot farm in Kampung Mawai, Farm Fresh has four other farms in Desaru (Johor), Muadzam Shah (Pahang), Taipeng (Perak) and Universiti Putra Malaysia (Selangor).
The number of dairy cows have also grown a hundred-fold, from the initial 60 to 6,000.
HEAT-RESISTANT HYBRID COWS
One of Loi’s successful projects, which proved key to Farm Fresh’s production, was his decision to breed cows that could thrive in the tropical climate.
In 2012, The Holstein Milk Company acquired an Australian genetic company that was set up by the Queensland government.
Through cross-breeding, this company developed the Australian-Friesian-Sahiwal cow, a breed more suited to the tropical climate.
Loi said this new breed has been invaluable in ensuring that Farm Fresh maintains a high volume of milk production, as its supply line is “constantly behind demand”.
“It’s a very strategic investment for us because all our dairy breeds are coming in from Australia,” said Loi.
“This ensures we have enough generic (breeds) coming back to Malaysia to support our growth,” he added.
Loi, who describes himself as an animal lover, goes out of his way to ensure that the dairy cows are fed with quality grass and have ample space to graze.
IMPACTS OF COVID-19
While many industries in Malaysia had to halt production amid the Movement Control Order, Farm Fresh continued its operations as milk is considered an essential good.
Loi was wary of COVID-19 clusters breaking out among his employees at the farms and processing facilities.
He saw how COVID-19 cases spread in foreign worker dormitories in Singapore and other parts of Malaysia and decided to take pre-emptive action by housing his workers in rented units.
“We didn’t want them to go out and buy food. So all the lunch and dinners were provided,” said Loi.
“We have to ensure that they adhere to very tight protocols. Thank god over the last one and half years, we have had no incidents,” he added.
Loi said that ensuring the welfare of his dairy cows as well as employees is crucial to the longevity of his business.
“You can grow, you can make money, but then again, how do you treat your animals? Are they well looked after and things like that? And how about your employees?” said Loi.
“I think we wanted to build a brand and some day, people will appreciate this as a company where all our stakeholders from our customers, our employees, our animals, are well taken care of.”
Source : Channel News Asia