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KUALA LUMPUR, July 9 — Dutch Lady Milk Industries Bhd (DLMI) is taking steps to strengthen its presence in the business-to-business (B2B) segment through its Dutch Lady Professional range.
The move is a natural progression since DLMI has established itself as one of the biggest players in the retail and consumer segments, being one of the dairy brands that reached the most number of households, said managing director and executive director Ramjeet Kaur Virik.
She explained that DLMI viewed the B2B segment as a way to accelerate its growth after supplying dairy products to the local market over the last 20-30 years.
“DLMI will work closely with the global team to push for the B2B division as we can see the evolution and phenomenal growth of the tea and coffee markets year-on-year,” she said to Bernama.
Citing an industry report, she said that about 1.6 billion cups of coffee and tea are consumed in Malaysia every year — a huge market.
As for the products, Ramjeet said that the Dutch Lady Professional ultra-heat treatment (UHT) Full Cream Milk has been available in a retail pack since 2016, while the Dutch Lady Professional Pasteurised Fresh Milk debuted in 2022, and Debic, a premium European dairy butter and cream line made for the bakery industry, hit the Malaysian market in 2020.
She added that the Dutch Lady Professional fresh milk and UHT milk are made locally for the Malaysian market.
DLMI’s move to strengthen its B2B presence is in line with its parent company, Royal FrieslandCampina’s goals, which is to establish a stronger footing in the coffee and tea industries through collaboration with the Asean Coffee Federation to expand into the B2B market.
Royal FrieslandCampina is a Dutch multinational dairy cooperative, one of the world’s largest dairy cooperatives which is owned by 18,261 farmers from the Netherlands, Germany and Belgium.
DLMI, which will be celebrating its 60th year anniversary this year, is waiting to move its operations to its Bandar Enstek production facility which is scheduled for completion next year, where it will have twice as much space compared to its current site in Petaling Jaya.
DLMI acquired the 13.2-hectare industrial land in Bandar Enstek for RM59.79 million in 2020.
According to its annual report, the company has increased its investments in the new production facility to RM540 million, and spent RM166 million in 2022 for the move to Bandar Enstek from its current location.
Elaborating on DLMI’s strategies to grow its B2B segment, Ramjeet said that DLMI is constantly working with experts, including associations, to better understand the demands of the coffee, tea and bakery industries as well as actively participating in related events.
“We engaged with professionals to find out what they are looking for and what they need, and this led to different product formulations, such as better foaming for latte art,” she said.
The company is also a proud sponsor of the International Cafe and Beverage Show (ICBS) and a latte art championship partner for the last five years — part of its efforts to enhance the visibility of its product offerings among the professionals.
Ramjeet noted that the number of ICBS visitors had increased by 50 per cent this year compared to last year.
“With consumers, you reach them through advertising, but in the B2B world, we need to be present at professional exhibitions while also looking at what we can do here and what we have in the Friesland Campina global supply chain network,” she added.
When asked about the Covid-19 pandemic’s impact on DLMI, Ramjeet described the past two years as a roller coaster ride, as operations were halted or resumed depending on the number of cases and regulations.
Despite the uncertainties during pandemic, she said that other industries such as e-hailing, logistics and home-bakery businesses were thriving as they were able to pivot quickly to the delivery model.
“Traditional hotel, restaurant and catering businesses as well as bakeries had a bit of a turbulent time during the pandemic.
“But we also saw that those who were able to provide delivery services had survived during that period,” she said, adding that DLMI was also able to navigate the scenario and focus on key activities while also incorporating backward integration into its operations.
“While we experienced supply chain disruptions, we worked with our suppliers and local farmers as well as the distributors to assist in getting the products to retail,” she added.
As for the company’s outlook, Ramjeet acknowledged that the rising inflation rate, both globally and domestically, has become a point of focus in DLMI’s boardroom discussion.
It was reported that DLMI is facing up to a 15 per cent increase in overall raw material costs.
“Although we do see that the inflation or the spike in the cost of dairy raw materials is flattening and slowly declining, they remain at a historic high.
“Foreign exchange and geopolitical tensions in Europe have affected the ringgit and we buy a lot of raw materials in US dollar, so DLMI is working hard in balancing between nourishing our people, our consumers and our profitability,” she added. — Bernama
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