Star Lion Group's integrated dairy farm to open in 2025

The group revealed at the “2024 First Half Fiscal Year Report Meeting” held in Longshi today that the farm will introduce 2,000 cows in the first phase, with a daily output of 30 litres each.

Meanwhile, the ranch will be implemented in 2 stages, covering a total area of 809.37 hectares. Currently, it is in the Daxing civil engineering stage, about 404.69 hectares, an area where construction has not yet started.

Group CEO Lin Youhe said that the ranch will free up 3 reserved areas to be used as cultivated land for dairy cow feed, etc. He also said that in the future, it may be possible to raise up to 10,000 cows, and the ranch area may also be expanded to 2428.11 hectares.

“However, the Group does not hire too many people. Although the ranch may reach this scale when it comes to Japan, the company uses automation.”

Lin Youhe also said that the group has already sent personnel to the US to inspect and has selected suitable cows earlier.

Recently, there have been frequent cases of bird flu in many states in the United States. It is precisely from migratory birds to poultry and dairy cows. Lin Youhe said in response to an inquiry that dairy cows imported by the company will ensure that they are imported to Malaysia from non-affected areas.

In the first phase of the ranch launch, the group plans to export milk to neighboring countries Singapore and Cambodia; in the next phase, it will further expand to other markets in the Central and Southern Peninsula, and even Hong Kong and Macau.

Lin Youhe estimates, “Each cow can produce up to 30 litres per day. In other words, this scale can supply more than 20 million litres of milk per year to local and international markets. ”

“In the first phase, we expect to export 100 million litres; in the second phase, we will need to invest an additional RM100 million to achieve an export volume of 200 million litres.”

Star Lion Group achieved excellent revenue in the first half of fiscal year 2024. Among them, Thailand contributed greatly, and local holiday sales were also the main force. Looking ahead, the group will carefully guarantee the performance of the second half of the fiscal year and focus on boosting non-festival sales of its brands in the long term.

Meanwhile, in February of this year, the group also announced that it plans to invest 37.5 million US dollars (approximately RM179.5 million) to open a new plant in Cambodia, focusing on strengthening its dairy products business.

Lin Youhe said, “The industrial land covers an area of about 32,200 square meters. The aim is to establish a local operating base in Cambodia and stabilize the supply chain. ”

Additionally, Star Lion Group will focus on optimizing fixed assets within the next 3 years — meaning that no new expansionary investments may be announced within 3 years.

Lin Youhe explained, “Currently, the Group can raise the fixed asset turnover ratio (FAT) by 50% to 60% without making huge capital expenses, which can be described as the best way to increase revenue.”

On the other hand, despite the rise in commodity prices, Star Lion Group has no plans to increase prices, and emphasized that price increases are the group's last option.

Zhang Yanyao, Group Financial Director, said, “The Group adopts a product hedging strategy, which also controls costs and portfolio profits, so raising product prices has always been the Group's last resort.”

Lin Youhe also explained that overall commodity prices have improved this year, but the prices of a few commodities, such as sugar, rice, rice dumpling oil, gelatin (gelatin), tinplate, and cocoa powder, are expected to remain high in 2024.

Commodities are expensive, and raw material costs are skyrocketing. The biggest impact on the group's sugar costs is 60 million ringgit over last year.

Followed by the cost of sugar (RM500,000), gelatin (RM5 million), and cocoa (RM4 million).

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