MUADZAM SHAH TO EMERGE AS MALAYSIA’S PRINCIPAL DAIRY HUB ECER’s agribusiness cluster showcases success in accelerating rural socio-economic transformation

MUADZAM SHAH, PAHANG, 11 MARCH 2017:  The Muadzam Shah Cattle Research and Innovation Centre (MSCRIC), a public-private partnership project initiated since 2012 by the East Coast Economic Region Development Council (ECERDC), is set to further spearhead the Government’s transformation efforts for the agribusiness sector and grow the local dairy industry’s contribution to Malaysia’s rural socio-economy through the creation of jobs and entrepreneurial opportunities.
The establishment of MSCRIC is part of the strategy under the Economic Transformation Programme (ETP) to increase the income levels of the Rakyat by boosting the revenue of farmers and agro-entrepreneurs which in turn will allow the agro-sector to develop into a steady and resilient industry. In addition, this high-impact agribusiness project is also developed to ensure sufficient and affordable food supply for the Rakyat. Food security remains a priority to the Government and this initiative is in line with the National Agro-Food Policy (2011 – 2020).
In a working visit to MSCRIC today, YAB Dato’ Sri Mohd Najib bin Tun Abdul Razak, Prime Minister of Malaysia, took the opportunity to personally witness the progress of this transformation project including the construction of the new Dairy Processing Plant, which is expected to be ready by end of 2017.
Also present during the Prime Minister’s working visit were YAB Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob, the Menteri Besar of Pahang; YBhg. Datuk Seri Jebasingam Issace John, the Chief Executive Officer of ECERDC; YBhg. Datuk Dr. Sharif bin Haron, Director-General of Malaysian Agricultural Research and Development Institute (MARDI); as well as YBhg. Tan Sri Dato’ Azman Mokhtar, the Managing Director of Khazanah Nasional Berhad.
Currently, the domestic dairy industry relies heavily on imported milk, which is estimated to be worth RM3.24 billion per year as locally produced milk only meets about 5 per cent of the local demand. Malaysia consumes 1.4 billion litres of milk a year and a staggering 94.4 per cent of that comes from Australia, New Zealand and other countries. Local demand is expected to increase by 3.2 per cent annually to reach 1.9 billion litres in four years, requiring an urgent need for Malaysia to boost its domestic production.
“The success of MSCRIC serves as a testimony to ECERDC’s anchor company model, whereby the Government facilitates investment and infrastructure development while the private sector champions its commercial advancement. MSCRIC has not only encouraged the growth of local dairy farming, but will also help build local talent in the industry. With the transformation of the overall dairy production value chain, this will also allow the locals to benefit from the positive socio-economic impact through the increase of jobs and entrepreneurial activities in ECER,” said Datuk Seri Issace.
“Importantly, in line with the Government’s transformation agenda, we are committed in capabilities building for the industry by upskilling the locals especially in the rural area to ensure that they benefit from the growth of the dairy production industry. This is in addition to the opportunities we will also be able to offer to entrepreneurs within the entire dairy value chain particularly in the areas of productivity, market reach and product innovation,” he added.
Led by an anchor company, The Holstein Milk Company Sdn. Bhd. (Holstein), MSCRIC has successfully transformed the local agribusiness industry in Muadzam Shah, Pahang, producing about 2.56 million litres of fresh milk, equivalent to 9% of domestic milk production from Peninsular Malaysia and a significant contribution compared to the average production of 100,000 litres of fresh milk per farm in Malaysia.
Once the new Dairy Processing Plant is completed, milk production at MSCRIC will double by up to 5.36 million litres a year. The new plant, located adjacent to MSCRIC, will also create 25 new job opportunities for the locals on top of the existing 53 locals including five Orang Asli who work at the dairy hub. This in turn will bring about spill-over benefits to the overall dairy sector in Malaysia as well as create more jobs and entrepreneurial opportunities to uplift the livelihood of the Rakyat.
MSCRIC is implemented based on the National Blue Ocean Strategy to ensure high-impact delivery with rapid execution at a low cost. The project showcases the successful partnership of various public and private entities including the Ministry of Agriculture and Agro-based Industry, MARDI and the Department of Veterinary Services.
Moreover, MSCRIC is in line with the Government’s aspiration to develop the local dairy industry as part of the Entry Point Projects of the National Key Economic Areas (NKEA) under the Dairy Cluster, whereby anchor companies will oversee all aspects of the dairy operation, from production to marketing.
The success of MSCRIC is being replicated for future dairy projects in the ECER. Plans are currently underway to implement another integrated project to create a “dairy valley” in Jemaluang, Mersing, which is expected to contribute 4 million litres of milk worth RM18 million each year and 60 job opportunities by 2021.
During the event, Dato’ Sri Najib had also presented letters of appointment to six satellite farmers who were recently appointed by Holstein as the first batch of participants. They will be trained and guided to produce quality raw milk that meets international standards and increase their production by up to 20%. This will help increase the income levels for the farmers, which will in turn improve their standards of living and at the same time encourage a more sustainable growth of the local dairy industry. During the event, the first batch had also received grants through TERAJU@ECER to help develop their farms. Moving forward, more satellite farmers are expected to benefit from this project as ECERDC targets to provide as many as 100 entrepreneurial opportunities by 2020.
Another key focus of this project is the development of micro entrepreneurs through Holstein’s Home Dealers programme. At present, Holstein has more than 300 Home Dealers nationwide who have been trained to be micro-entrepreneurs of the dairy industry. To date, a total of 150 of them are from the ECER, largely consisting of housewives and unemployed youths who have been given the opportunity to earn additional income of between RM700 to RM3,500 a month. Three of the top home dealers in ECER received certificates presented by Dato’ Sri Najib today, in recognition of their dedication to their business and as an inspiration for other micro-entrepreneurs.
Holstein’s Managing Director and Founder, Mr. Loi Tuan Ee said, “We are proud that our ‘Farm Fresh’ brand currently holds more than 39% of the local market share in the fresh milk category. While most imported dairy products use reconstituted milk and incorporate milk powder, solids and preservatives into their products, Holstein remains one of the few milk companies in Malaysia that produces and markets fresh milk, from grass to glass supported by our research and development activities in MSCRIC.”
“With the continuous support from the Government via ECERDC, Holstein plans to diversify its activities at the 240 hectares of land allocated by MARDI at MSCRIC. We will leverage on MSCRIC’s existing capacity by positioning the area as a popular agro-tourism destination, enabling visitors and school children to learn more about the local dairy industry and the processes involved. This is also expected to further boost local socio-economic activities in the area,” he added.
 The Company is also in the midst of planning for the development of a Biogas Plant which will deploy environmentally friendly methods to utilise farm manure for the generation of energy. This is being considered as part of its cost savings strategy for the farm’s operation.