Cambodia's first milk manufacturing plant, which aims to dominate the domestic dairy market, officially launched production operations yesterday after a ribbon-cutting ceremony held at the factory’s home in Phnom Penh SEZ.

The $23 million Angkor Dairy Factory is a joint-venture partnership between Vietnam Dairy Product Joint-Stock Co, better-known as Vinamilk, and BPC Trading Co Ltd. The joint venture, originally signed in 2013, has formed a new line of Cambodian dairy products under the Angkormilk brand name.

The 30,000 square metre facility has an annual capacity of 19 million liters of liquid milk, 64 million cups of yoghurt and 80 million cans of sweetened condensed milk.

With the launch of production, the Kingdom’s shelves will soon see the UHT milk, which is milk sterilised at ultra-high temperatures, sold in 220ml pouches bearing Angkormilk’s logo.

The yoghurt products come in four flavours, and the condensed milk will be marketed under two distinct brands: Best Cows and Captain. The new Angkormilk Liquid Milk for Kids, sold in small cartons, is made of infused and pasteurised milk.

Phat Bun, chairman of BPC Trading Co Ltd, which owns the minority share of the joint venture at 49 per cent, said that as Vinamilk’s strategic partner in Cambodia “the manufacturing plant will commit [itself] to providing our customers with optimal nutrition solutions that meet international standards”.

“We will start by placing our products in Phnom Penh, but we already have 18 direct distributors that can reach 16 provinces,” he said.

While the majority of the pasteurisation and the sterilisation equipment for liquid milk has been sourced from companies in Denmark and Germany, the robotic packaging machines and assembly line construction comes from Tetra Pak – a multinational food packaging and processing company from Sweden.

Hao Anh, chairman of the board for Angkormilk and Chief Operations Officer of Vinamilk, said that the Cambodian plant is part of the Vietnamese company’s global expansion – which just last Tuesday took full ownership of California-based Driftwood Dairy Holding Corporation for $10 million.

“We have already set up operations in the US and New Zealand. Our joint venture in Cambodia will bring a domestic brand with improved capacities, partners and distribution network,” he said.

With $25 million in revenue generated in Cambodia last year, he expects that number to double by the end of 2016.

“Right now dairy consumption in Cambodia is very low, far lower than in Vietnam which is also comparatively low. But with a young generation that have [different tastes], we see that there is a lot of market potential,” he said, adding that the company can easily carve out 15 per cent of Cambodia’s domestic market.

Michael Zacka, the president of Tetra Pak’s South Asia, East Asia and Oceania division, said that the facility will employ 300 Cambodians with a skeleton crew of Vietnamese staff.

He added that for raw materials, the company will import milk powder from Vietnam and raw milk from the US and New Zealand.

“As Cambodia’s infrastructure and economy increases, it is possible that in the future the plant could source milk from domestic dairy cows,” he said.

According to the Vietnam Dairy Products Joint Stock Company (Vinamilk) 2015 financial report, the Hanoi-listed company posted an after tax profit of nearly $350 million last year, an increase of 28 per cent year-on-year.

The company’s total revenue in 2015 reached $1.8 billion, up 14 per cent from 2014.