French dairy company Lactalis is to acquire operations of Nestlé’s Petaling Jaya (PJ) factory as Nestlé move to consolidate Milo production in its Chembong factory.

Financial details of the deal have not been disclosed by either company.

With this acquisition, Lactalis intends to establish Malaysia as the operations hub for its dairy business in the ASEAN region and plans to drive growth through an expanded portfolio of new products.

Nestlé Malaysia is planning to expand its Milo factory located in Chembong, Negeri Sembilan, with an investment of more than RM100m ($24m).

The investment is part of the company’s strategy to drive sustainable growth.

“This move is an investment to further strengthen our Nestlé presence in Malaysia.”

Nestlé intends to transform its Chembong factory into the world’s biggest Milo manufacturing centre of excellence.

With the sale of PJ facility to Lactalis, Nestlé will move Milo manufacturing operations from its PJ factory to the Chembong facility.

Nestlé Malaysia CEO Alois Hofbauer said: “This move is an investment to further strengthen our Nestlé presence in Malaysia. The Milo plant in Chembong is an integral part of the company’s business, supplying Milo domestically and contributing exports to over 20 countries.

“Through the concentration of our MILO operations and our investment of over RM100m into the Chembong factory, we will not only be able to further upgrade production facilities and improve operational efficiencies, but also scale up capacity and make Chembong the biggest Milo Manufacturing Centre in the Nestlé world.”

Food and beverage manufacturer Nestlé is present in 189 countries worldwide.