JAPAN – Meiji Co., a prominent Japanese food group, has revealed plans to invest ¥48 billion (US$331 million) in constructing a new dairy production facility in Nakashibetsu, Hokkaido.

The investment aims to modernize and consolidate the company’s manufacturing sites in the region, replacing the aging facilities at Meiji’s Nishi Shunbetsu and Honbetsu plants.

The new facility, yet to be named, will enable a more stable provision of dairy products, including non-fat dry milk, concentrated skimmed milk, butter, cream, and milk protein.

The 230,258 square meter space will take over the production responsibilities of Nishi Shunbetsu and Honbetsu, ensuring continuity and expanding production capacity.

The new plant is expected to produce 430,000 tons of raw milk annually, with plans to increase this capacity to 500,000 tons eventually. Products manufactured at the facility will cater to both retail and business-to-business (B2B) markets.

Meiji emphasized the incorporation of sustainable practices at the new site, aiming to add value to milk products while being environmentally friendly.

The company plans to reduce carbon emissions and groundwater drainage by 50%, compared to its other factories, through the implementation of new technology and production methods.

Construction is scheduled to commence in April of the upcoming year, with the new facility expected to become operational by March 2027.

As part of the transition, production at Nishi Shunbetsu is set to cease in May 2027, followed by Honbetsu in September 2027.

While details about potential job impacts resulting from the closure of Honbetsu and Nishi Shunbetsu remain unclear, Meiji indicated a focus on labor reduction at the new site through the use of the Internet of Things (IoT) and facility automation.

This approach aims to improve productivity, create a more comfortable work environment, and contribute to Meiji’s pursuit of efficiency.

The significant investment in the new facility is also expected to have only a “minor” impact on Meiji’s financial results for the year.

In its consolidated financial results for the first six months of the fiscal year ending March 2024, Meiji Holdings reported a 5.5% increase in net sales compared to 2022, reaching ¥549 billion, with an operating profit up 2.9% at ¥44 billion.

Notably, Meiji has been expanding its global footprint, with a previous announcement in 2020 regarding the establishment of a new unit in China focused on the production and marketing of milk, yogurt, and confectionery in the city of Guangzhou.