Farm Fresh Berhad (FFB) is accelerating its regional expansion plans with a larger-than-expected dairy herd expansion in Pahang, a new ice cream manufacturing facility set to begin operations next month, and a production hub in Cambodia expected to strengthen its Indochina presence, according to Kenanga Research.
Following a recent investor visit to Farm Fresh’s Muadzam Shah operations in Pahang, Kenanga said the company is steadily expanding production capacity while reinforcing its long-term sustainability strategy through climate-adapted farming, proprietary breeding programmes and integrated livestock management.
Pahang dairy hub set to double capacity
Farm Fresh’s newest dairy farm, Muadzam Shah 2 (MZ2), currently houses around 900 dairy cattle, including between 200 and 250 milking cows.
Management has now raised its import target to 3,000 dairy cows by November 2026, double its earlier guidance of 1,500 cows by October, with milk production from the new herd expected to commence around March 2027.
The MZ2 facility has been designed with 10 barns, six of which have already been completed, allowing it to eventually accommodate approximately 4,000 dairy cows—matching the capacity of the group’s existing Muadzam Shah 1 (MZ1) farm.
Once fully operational, the combined Muadzam Shah complex will house around 8,000 cows, making it Farm Fresh’s largest integrated dairy farming hub.
Enstek ice cream plant on track
Kenanga said Farm Fresh remains on schedule to commission its new manufacturing facility in Enstek, Negeri Sembilan, in August 2026.
The plant will focus on ice cream production alongside polyethylene bottle-based dairy products and is expected to more than double the group’s daily ice cream production capacity to about one million pieces from the current 450,000 pieces produced across its Taiping and Sin Wah facilities.
The additional capacity is expected to support export opportunities, including expansion into neighbouring Thailand.
Cambodia expansion progresses
Meanwhile, Farm Fresh’s new US$12.8 million (RM55 million) manufacturing facility in Kampong Speu Province, Cambodia, has experienced a slight delay.
Installation of the first phase of production lines is now expected to begin in October 2026 instead of the previously targeted July or August period.
Phase one will comprise two pasteurised milk production lines with annual capacity of 19.3 million litres, followed by two ultra-high temperature (UHT) milk lines capable of producing 34.1 million litres annually by January 2027.
Kenanga said the Cambodian facility is expected to improve production efficiency and position Farm Fresh to capitalise on opportunities arising from ongoing disruptions linked to the Thailand-Cambodia border dispute while supporting longer-term expansion across Indochina.
Cambodia currently contributes approximately RM4 million to RM5 million in monthly revenue for the group.
Sabah dairy venture under study
Farm Fresh has also signed a memorandum of understanding with the Sabah Rubber Industry Board (LIGS) and the Sabah Department of Veterinary Services to explore establishing a commercial dairy farm under the proposed Keningau Dairy Valley project.
While still at the preliminary stage, the initiative could expand downstream dairy processing and strengthen Sabah’s domestic dairy industry.
Sustainability remains central to growth
Beyond expansion, Kenanga highlighted Farm Fresh’s continued focus on sustainability and operational efficiency.
To improve animal welfare under Malaysia’s tropical climate, the company uses high-volume ventilation fans imported from Australia instead of conventional air-conditioning systems.
The open-barn ventilation approach helps reduce heat stress, improve airflow and maintain stable milk yields of between 19 and 21 litres per cow daily.
Although this remains below yields achieved by some domestic peers, Kenanga noted the strategy prioritises long-term herd health and sustainable productivity.
The company also employs preventive animal healthcare programmes and customised feeding strategies tailored to calves, lactating cows and pregnant cattle to optimise nutrition and minimise feed wastage.
Farm Fresh has additionally strengthened its in-house breeding capabilities by developing proprietary dairy genetics focused on heat tolerance, disease resilience and productivity, creating a herd better adapted to Malaysia’s climate.
Its integrated farming model further extends into beef production, with retired dairy cows marketed under the Rompin Beef brand through retailers including AEON and Jaya Grocer.
Outlook maintained
Kenanga maintained its earnings forecasts and retained a “Market Perform” recommendation on Farm Fresh with an unchanged target price of RM2.25.
The research house said Farm Fresh continues to benefit from its leadership in Malaysia’s ready-to-drink milk market, vertically integrated “grass-to-glass” business model, expansion into higher-margin ice cream products, and ongoing product innovation.
However, it cautioned that earnings remain exposed to fluctuations in raw material prices, increased competition from new market entrants and foreign exchange movements
