Malayan Flour Mills earmarks RM215 million for capital expenditure in FY25

The Sun

19-05-2025

KUALA LUMPUR: Malayan Flour Mills Bhd (MFM) has earmarked RM215 million for capital expenditure (capex) in the financial year ending Dec 31, 2025 (FY25) to expand its poultry integration and flour trading operations in Malaysia and Vietnam.
The capex will be financed through a combination of internally generated funds and borrowings.
Of the total, RM160 million will be allocated to the group's poultry integration (PI) segment. This includes RM100 million for the expansion and upgrading of farming infrastructure – such as construction of parent farms and hatcheries – in collaboration with its joint venture partner. The remaining RM60 million will be used to upgrade existing farms to enhance productivity and supply chain efficiency.
Executive deputy chairman and managing director Teh Wee Chye said MFM is expanding its poultry business with government support because Malaysia still relies heavily on imported chicken and does not produce enough domestically to meet demand.
'For poultry integration, we are also working closely with the government. We see further upside in growth because poultry remains the most affordable source of protein,' he said at a press conference after its AGM today.
Teh said MFM is partnering with Tyson Foods to modernise its farming operations, as around 60–70% of chicken coops in Malaysia still operate under open-house systems, which are increasingly vulnerable to climate change. 'Open houses tend to experience higher mortality rates, whereas closed, climate-controlled houses will definitely perform better.'
MFM has completed the design and cost planning for the climate-controlled houses, which feature temperature control systems that are more efficient and better suited to extreme weather conditions.
'With the climate-controlled houses we have finalised in terms of design and costing, we believe this will result in better efficiency, particularly under harsher climate conditions,' Teh said.
He highlighted the company's logistics advantage through having its own jetty, which enables bulk importation of poultry feed. 'This allows us to add value to the business, especially since we have our own jetty, enabling us to bring in combo shipments of corn and soya meal, and helping to reduce our cash conversion cycle,' he said.
MFM's investment also extends to its flour and grain trading segment, which will receive RM55 million to expand capacity and enhance operational efficiency in key markets. This includes RM20 million for automation upgrades at MFM's flour mills in Lumut and Pasir Gudang to reduce manual labour, boost efficiency and ensure consistent product quality.
In Vietnam, MFM plans to scale up operations with a total investment of RM34 million – comprising RM21 million for capacity expansion and operational upgrades at its northern Vietnam plant, and RM13 million for the ongoing construction of flour silos and blending facilities in the southern region.
The RM55 million investment is jointly funded by MFM and its partners: RM20.4 million from MFM, RM20.9 million from Vima, RM13.1 million from Mekong and RM600,000 from DSM.
Teh said these investments are critical to strengthening production capacity and operational efficiency to enable them to meet the growing demand for flour and flour-related products in both Malaysia and Vietnam.
'We are encouraged by the strong performance in our flour business in these key markets, and we believe that this growth trajectory is sustainable. The investments in automation and capacity expansion are timely, positioning us to capture future demand.
'On the flour mills, as you can see, our operations in Malaysia and Vietnam are performing very positively. As we grow capacity to meet market demand, we also aim to be cost-efficient. I believe we are on the right track.'
Teh added that MFM's flour plant in northern Vietnam is operating near full capacity which prompted the board to approve a new 500-tonne-per-day mill to support future demand.
'Since it's maxed out, and the Vietnam economy – pending everything moves well – is still projecting an 8% growth rate, we see prospects for these two investments.'
MFM's Vietnam flour operations posted over RM2 billion in revenue in 2024, contributing RM250 million in profit.
'We are encouraged by the strong performance in our flour business in these key markets, and we believe that this growth trajectory is sustainable. The investments in automation and capacity expansion are timely, positioning us to capture future demand,' Teh said.
He reaffirmed MFM's long-term optimism for both its flour and poultry businesses, citing continued investments in infrastructure and technology as key to strengthening the group's competitive edge.
'Our commitment to automation, capacity expansion, and infrastructure upgrades reflects our goal of becoming a leading staple foods supplier in the countries where we operate, while driving sustainable growth for the group,' he added.