MPIC, Israeli firm launch dairy facility

Danessa Rivera – The Philippine Star

December 23, 2022 | 12:00am

MANILA, Philippines — The MVP Group has teamed up with Israeli firm LR Group Ltd. to boost Philippine dairy production with a P2-billion state-of-the-art farm facility producing fresh milk and milk derivatives.

This is aimed at addressing a portion of the country’s milk requirements.

Metro Pacific Agro Ventures Inc. (MPAV), the wholly owned agriculture unit of Metro Pacific Investments Corp. (MPIC), and its partner LR Group launched yesterday Metro Pacific Dairy Farms (MPDF), a facility that can produce 6.5 million liters of milk annually.

Under a 60-40 sharing in favor of the MVP group, the partnership will invest about P2 billion in the new facility, MPAV president and CEO Jovy Hernandez said during the groundbreaking ceremony.

This project cost will be funded through a 70-30 debt-to-equity ratio.

“We’re working with local banks for us to be able to do that with our 60-40 sharing,” Hernandez said.

The team-up presents a significant growth opportunity for MPIC and the Philippines, as the country currently imports 99 percent of its annual dairy requirements.

“We share the same values ​​with MPIC and MPAV in terms of maximizing what their country has to offer primarily in land, natural resources and skills, and in turn helping their local communities thrive,” LR Group co-founder and CEO Ami Lustig said.

The MPDF aims to significantly help the country reduce milk imports, targeting to meet 25 percent of the country’s daily demand, Hernandez said.

Honestly, this facility might not be enough for us to get to that 25 percent. But as an initial salvo, we are excited about this project and we’re very excited to prove that it can be done,” he said.

The MPDF project expands MPAV’s existing dairy business, The Laguna Creamery Inc., of which MPIC bought 51 percent from Carmen’s Best Group for P198 million in June.

The new farm facility will have a capacity of up to 2,000 cows. It will have an initial 1,000 cows.

If you look at the scale of what we have at Carmen’s Best farm where we have 90-100 milking cows, that would immediately be six times bigger. So the investment is quite sizable,” Hernandez said.

Through modern farm practices, MPDF plans to increase the country’s fresh milk yield per cow, from eight to 10 liters a day to 30 liters a day.

The farm facility will also have highly mechanized and automated operations to maximize fresh milk’s shelf life, which will ensure adherence to quality and safety standards.

It will also be equipped with solar farms that will produce power for the dairy facility, a water treatment plant that will provide human-grade drinking water for the cattle, and a waste management facility that will allow the facility to produce fertilizer.

Apart from locally producing fresh milk, MPDF will also have processing plant capabilities to produce other milk-derived products such as low-fat milk, chocolate milk, yogurt and other popular dairy products for the local market.

The construction of the facility will start in 2023 and take approximately two years to complete, while the commercial operation is projected to start from late 2025 to early 2026.

Apart from ramping up the Philippine dairy industry, MPDF also plans to solidify a relationship with local corn farmers for the cattle feed rations. It also aims to be a future training facility for future farmers and experts in agriculture, in partnership with academic entities.

“Our investment in agriculture is synonymous to food security and substantial independence, but will ultimately become a means of alleviating hunger in our country – a pressing issue that we have taken as a challenge to address,” MPIC chairman, president and CEO Manuel V. Pangilinan said.

MPIC earlier said it was ramping up investments in the agricultural sector to help reduce the country’s dependence on food imports amid ongoing global supply chain disruptions and high inflation.

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