KUALA LUMPUR: Dutch Lady Milk Industries Bhd (DLMI) said the worldwide operating environment has gotten more difficult and uncertain, as a result of the Covid-19 pandemic, the Ukraine war, and higher regulatory requirements.
DLMI's managing director, Ramjeet Kaur Virik, said that the company was upgrading its economic, environmental, social, and governance (EES&G) and risk frameworks as part of its 2030 strategy.
She said that the company's performance in 2022 was encouraging, and that DLMI was cautiously optimistic about the brand.
"The year was about strengthening resilience in a post-pandemic environment as we continue our unwavering mission to 'Nourish Our Nation' by providing affordable, quality, Halal, and sustainable dairy nutrition," she said.
She said that DLMI saw unpredictability in pricing fluctuations and supply chain trends, as well as a 15 per cent increase in overall raw material costs, with market stability hampered by post-pandemic recovery.
"DLMI succeeded in balancing these pressures, which also meant our Halal products remained affordable and accessible to our loyal consumers," she said, adding the company continued to address challenges posed by disruptions and uncertainties in logistics and supply chain.
"With Malaysia's government aiming for a self-sufficient level of 100 per cent by 2025 for fresh milk production to reduce imports, DLMI will continue working closely with the Department of Veterinary Services Malaysia to train local dairy farmers to increase volume and quality of fresh milk to achieve this target," she said.
DLMI reiterated that it will continue to invest significantly in the country, with an RM540 million outlay earmarked between 2021 and 2025 for the construction of its Industry 4.0.
Industry 4.0 consists of a standard dairy manufacturing hub at Bandar Enstek, Negeri Sembilan, that is expected to be commercially operational in 2024.
"DLMI will continue to optimise the company's costs and cash flow to address the continuous inflationary headwinds as management continues to secure internal financing towards boosting the new world-class manufacturing facility," Ramjeet added.
Moving forward, DLMI said that it will remain focused on aligning core sustainability focus areas with Royal FrieslandCampina's global pillars of "better nutrition, "better sourcing, "better climate," and "better packaging," with additional pillars of "better people, "better society," and "better governance.
"This strategy is vital to helping the company build its EES&G roadmap, amplify its positive impact, and address business challenges and risks to achieve global sustainable development objectives," she said.
DLMI reported a lower net profit of RM46.3 million in fiscal year 2022 (FY2022), attributable to a number of one-off results and an unusual increase in raw material costs
The dairy maker's net profit fell by 81 per cent from FY2021.
DLMI said there was an upside in net profit in FY2021 due to the sale of the land underlying the current manufacturing facility in Petaling Jaya.
In terms of revenue, the company increased its 2022 full-year sales of RM1.3 billion by 18 per cent over the previous year.
DLMI attributed the brand's favourable consumer outlook to Malaysian consumers' resilient demand for high-quality dairy nutrition products.