Malayan Flour Mills to invest RM100 million to expand capacity in Vietnam, Malaysia
The northern Vietnam expansion will increase milling capacity from 2,000 to 2,500 tonnes daily
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[KUALA LUMPUR] Malayan Flour Mills (MFM), Malaysia’s second-largest flour miller, plans to invest RM100 million (S$32 million) over the next two years to expand its flour milling operations.
The move includes a new production line in Vietnam as rising regional demand pushes its Vietnamese plants close to full capacity.
About RM80 million will be allocated for the construction of a new milling line at subsidiary Vimaflour in Vietnam.
The remaining RM20 million will be used for upgrading, automation and operational improvements across its flour milling operations in Malaysia and Vietnam.
Executive deputy chairman and managing director Teh Wee Chye said the expansion at the group’s northern Vietnam operations will increase milling capacity from 2,000 tonnes per day to 2,500 tonnes per day.
“The expansion will strengthen our production capacity and support growing regional demand,” Teh told reporters after the group’s 66th annual general meeting on Tuesday (May 19).
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He said the Vietnamese operations are currently running at near full utilisation, supporting the need for additional capacity.
Teh added that Vietnam remains one of the fastest-growing economies in Asia, driven by rising incomes and changing consumption patterns.
MFM’s investments will be funded through internally generated funds and bank borrowings.
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Regional staple foods producer
MFM is one of the largest flour millers in South-east Asia, with about 25 per cent market share in Malaysia, around 50 per cent in northern Vietnam, about 20 per cent in southern Vietnam, and roughly 8 per cent in Indonesia.
The Bursa Malaysia-listed company has a market capitalisation of about RM731 million. It operates across flour milling, grain trading and integrated poultry production in Malaysia, Vietnam and Indonesia.
It is also Malaysia’s largest poultry processor, currently processing more than 200,000 chickens a day. Capacity is expected to increase to 280,000 chickens daily later this year.
The expansion comes as MFM’s flour and grain trading segment posted a strong performance in FY2025, with adjusted profit after tax rising 21.8 per cent to RM153.6 million from RM126.1 million a year earlier.
Rising costs and food security concerns
However, Teh warned that the global food industry continues to face mounting cost pressures from rising fertiliser, energy and grain prices amid escalating geopolitical tensions in the Middle East and uncertainty surrounding the Strait of Hormuz.
“Fertiliser prices have already gone up between 50 and 100 per cent. If wars prolong and crop prices do not rise commensurately, some farmers may stop planting,” he added.
Teh said pricing dynamics differ across markets. Vietnam and Indonesia operate under more market-driven mechanisms, while some flour products in Malaysia remain subject to price controls.
“People still need to eat. Our goal is to ensure food prices remain affordable regardless of the crisis,” he said.
He noted that food demand has historically remained resilient through economic downturns and commodity shocks.
The resilience in demand has been reflected in the group’s long-term growth. Over the past decade, MFM’s flour and grain segment recorded a compound annual growth rate (CAGR) of 7.3 per cent, while its poultry integration segment posted a CAGR of 4.4 per cent.
“As regional economies continue to expand, consumers tend to consume more protein and higher-quality food products,” he said.
Venture into convenience foods
Teh said MFM exports selected products from Vietnam to markets such as the Philippines and Thailand. However, export volumes remain relatively limited because many countries prioritise domestic food security.
“There are not many exporting countries left,” he said, adding that flour is generally regarded as a strategic food item in many markets.
But he sees stronger export potential in higher-value, further processed food products rather than commodity flour.
“In terms of further processed and ready-meal products, there is more export potential,” he said.
MFM has recently entered the halal-certified ready-to-eat microwaveable meals segment as part of efforts to tap growing demand for convenient food products, particularly among younger consumers.
“Younger consumers do not want to spend too much time cooking, so ready-to-eat products offer convenience and affordability,” Teh said.
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