ofi more than doubles functional dairy ingredients capacity with expanded Malaysia plant and R&D center

Ofi has increased its ingredient manufacturing footprint by adding significant capacity to its production facility in Johor, Malaysia, which manufactures functional dairy ingredients and fat-filled milk powder. The enhancements – which include a new milk powder dryer at the plant and an expansion of the company’s Ingredient Excellence Center (IEC) – are part of ofi’s strategy to become a more solutions-led, customers-centric organization following its rebrand to Olam Food Ingredients in 2021.

Speaking exclusively to DairyReporter, Sandeep Jain, managing director and CEO, Dairy, at ofi said: “The plant will produce 90,000 metric tons of fat-filled milk powder and other dairy ingredients each year and will play a key part in serving the demand from our customers in the Middle East, North Africa and Asia. 

“The expansion of our research and development operation with cutting-edge equipment and new category laboratory facilities means we will be able to better collaborate with customers to create customizable, tailored, and cost-effective dairy food applications in beverages, bakery and frozen desserts for consumers worldwide.”

ofi reported that the additional capacity will enable the facility to more than double the yearly production volume of functional dairy ingredients and fat-filled milk powder, in turn allowing customers to formulate applications at scale.

Meanwhile, the IEC’s new capabilities would enable the firm to better collaborate with brands, grocery retailers and foodservice companies. “The expanded IEC has new laboratory spaces with research and development equipment where we will work on application solutions in beverages, bakery and frozen dairy desserts,” Jain told us. “The new IEC is part of our global network of 15 innovation centers, and the team there will work in close collaboration with our Singapore Customer Solutions Center to collaborate with brands, grocery retailers and foodservice companies to create delicious and nutritious consumer products.”

Importantly, all this will allow ofi to increase its focus on high-growth segments such as ready-to-drink beverages, premixes and blending lines, alongside its existing range of filled milk powder solutions.

Asked about what are some of the consumer trends that could influence new product development in 2024, Jain said: “We monitor consumer trends closely then work with our customers to create tailored dairy ingredient solutions for them, leveraging the wider ofi ingredient portfolio as well, which includes cocoa, coffee, nuts and spices. Our ingredients are often used in bakery, beverage, confectionary, ice cream and yogurt products.

“A good example is hot beverage mixes. We have created some fantastic beverages such as spiced teas and coffees. We have to make sure these taste great, but our solutions need to cover all of our customers’ wider needs as well – how do we ensure a long-lasting and high quality product, what is the consistency when it’s mixed with water, how is the mouth-feel for the consumer? These are all important factors in delivering products that consumers will love.”

He added that the fat-filled milk powder which the company produces in the newly-expanded factory contains skimmed milk powder enriched with vegetable fat. “Fat filled milk powder is nutritious, with a desirable texture and flavor," he explained. "It can be used in many applications from ice cream and yogurts, bakery goods and confectionary items, through to coffee, tea and cocoa beverages. Our fat-filled milk powder has been fortified with vitamins A, D3, and E to enhance its nutritional value. It is also a good source of essential minerals, and proteins, offering a convenient way for consumers to incorporate dairy goodness into their diet. For food manufacturers it’s a great choice because it is cost effective but does not compromise on taste or nutritional value. It is also highly stable with a good shelf life, which helps with storage and distribution.”

Addressing whether it was a prudent decision for the company to increase the production capacity of its plant and R&D center at a time when the global milk powder market is bearish, Jain told us: “The global dairy market is cyclical, and our experience has taught us to use these cycles to invest and grow our capability, which ensures we are well positioned over the longer term.

“We are seeing strong levels of demand from our customer base, particularly in the Middle East, North Africa and Asia, and this has supported our investments such as the Malaysia plant expansion and our New Zealand processing plant development.” - Sandeep Jain, ofi

“To support our customers, we will continue to invest in growth opportunities within dairy ingredients, further complementing our existing global footprint and innovation capabilities,” he concluded.

The plant inauguration took place today (September 28, 2023) and was attended by YB Lee Ting Han, Johor State Investment, Trade and Consumer Affairs Committee chairman. ofi has created 70 new jobs, and the factory build leverages sustainable design principles including solar power, rainwater harvesting and energy and water efficiency practices, with ‘close to zero’ raw material wastage, we were told.