EY Entrepreneur Of The Year: ‘Truly natural’ the key to Loi’s success


  • Loi Tuan Ee, managing director of Johor-based The Holstein Milk Company Sdn Bhd
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This article first appeared in The Edge Malaysia Weekly, on November 21-27, 2016.

 

MOST people talk about the weather, movies, music or fashion but not Loi Tuan Ee. “We farmers can sit all day talking about cows,” he tells The Edge jokingly.

Loi is the founder and managing director of Johor-based The Holstein Milk Company Sdn Bhd, which produces popular dairy products such as Farm Fresh Milk, skinny milk, natural yogurt, yogurt drinks, caffè latte and Nubian goat’s milk.

“My wife once commented that I look at my cows like how women look at handbags,” he says, bursting into laughter.

Loi had worked in the packaging industry for 20 years before calling it quits because he did not see it as a sustainable business. He switched to dairy farming as he felt it was resilient. His interest in farm animals too prompted him to enter the industry.

Today, Holstein Milk has captured 39% of the local fresh milk market, unseating well-known brands such as Dutch Lady and Marigold. The company’s operations cover the breadth of the dairy value chain, from farm to shelf. Holstein Milk is also the appointed anchor company for the NKEA Entry Point Project 13 of the dairy industry, which aims to reduce Malaysia’s dependence on imported fresh milk.

According to Loi, the project has changed the Malaysian dairy industry as companies like Holstein Milk buy fresh milk from local smallholders at double the prevailing price, enabling them to have a sustainable means of livelihood. He points out that farmers were previously paid very little and were severely under-compensated for their milk.

Loi is a nominee for the Master Entrepreneur category of the EY Entrepreneur Of The Year Malaysia 2016 award.

Holstein Milk was started in an orchard in 2010, where Loi used food waste to feed his goats. He then began dairy production with goat’s milk at first and expanded into cow’s milk later on.

Loi owns 70% of Holstein Milk while Khazanah Nasional Bhd holds the rest.

Recalling the company’s difficult early years, he says, “Khazanah saw the potential in us and contributed a lot by getting land banks for the operation.”

In the beginning, the company bred Australian cows for milk but soon realised it needed the right breed for the Malaysian climate. Loi explains that while the conception rate of Australian cows is high, they cannot handle tropical heat, leading to a decline in milk production.

About four years ago, Holstein Milk acquired an Australian genetic company that was set up by the Queensland government in the late 1960s. Through cross-breeding, this company produced the Australian-Friesian-Sahiwal (AFS) cow, which is more suitable to the tropical climate.

Moving forward, Loi says he plans to switch to AFS cows in the next five to seven years. He believes this breed will be valuable in the future as global warming effects climate change the world over. He points out that in the US, scientists are now working towards infusing tropical heat-resistant traits into cows.

Loi also plans to introduce fresh cheese and Greek yogurt to the local market next year. “We don’t mind people calling us old-fashioned because I believe food has to be truly natural. A lot of the food nowadays is heavily processed,” he observes.

He believes the key to the company’s success is producing dairy products without chemical preservatives, colouring matter or stabilisers.

“Processed milk has a lot of added sugar, which causes obesity, diabetes and other sicknesses. Formulated milk also causes children to become addicted to sugar. Thus, we have opted for the traditional way and we’re going for natural [products],” he says, adding that he refuses to prolong the expiration date of a product or enhance its taste in order to increase its earnings. Loi finds it more rewarding when customers appreciate the truly natural quality of his company’s products.

And his motto? “To do what you believe is right.”