Fonterra Announces Plan to Invest in Dairy Plant in Indonesia

April 16, 2012 02:11 PM

New Zealand dairy giant says Asia is leading the world in dairy demand growth and Indonesia is a big part of that demand.

Fonterra, the world’s largest dairy exporter, has announced plans to invest in a blending and packing plant in Indonesia to help support the growing demand for high quality dairy nutrition in Indonesia.
The investment will support the local expansion of Fonterra’s consumer brands Anlene, Anmum and Anchor Boneeto throughout Indonesia, the New Zealand-based cooperative said.
Fonterra CEO Theo Spierings made the announcement as part of the New Zealand Prime Minister-led Business Mission in Indonesia this week, following on from Fonterra's global strategy refresh.
Spierings said Asia is leading the world in dairy demand growth and Indonesia is a big part of this demand.
“The New Zealand dairy industry has over a 40-year relationship supplying high quality dairy products to Indonesia and dairy demand in Indonesia is forecast to grow by around 50% over the next eight years,” Spierings said. “With such rapid growth forecast in Indonesia, we want to increase our packing and blending capabilities on the ground to support the long term growth of our business.”
Fonterra currently packs and blends its consumer brands -- Anlene, Anmum and Anchor Boneeto -- either in New Zealand or through co-packers in Indonesia or in Asia, before distributing to the Indonesia market.
“While Fonterra's brands will continue to use New Zealand ingredients, the new plant will support more local secondary processing of the products and help us respond to market needs swiftly,” Spierings said.
Maspiyono Handoyo, President Director of Fonterra Brands Indonesia, said Fonterra is looking to work with partners to establish and run the new blending and packing plant in Indonesia, which is in the planning stages.
"We are currently talking with prospective partners and looking at possible structural options and locations,” said Handoyo. “We expect to have the new plant operational within 18 months, which will adopt current best practices from across Fonterra and comply with Fonterra's Standards of Excellence and Quality.”
Spierings added Fonterra's plans to invest in Indonesia are part of the company's wider global strategy to sharpen its focus on the ASEAN region.
“We are committed to providing top quality dairy nutrition to people across ASEAN,” the Fonterra executive said. “Global dairy demand is set to increase by 100 billion litres over the next 8 years and 60% of this growth is expected to come from China, India and Indonesia. This investment in our local packing and blending capabilities will help ensure we can keep up with the region's growing appetite for dairy nutrition.”
Fonterra in Indonesia Quick Facts
•             Relationship between New Zealand dairy industry and Indonesia dates back to the late 1970s when bulk dairy ingredients were first sold to Indonesia food and beverage manufacturers.
•             Tenth largest market for Fonterra.
•             Sells bulk dairy ingredients to 14 large food and beverage companies as well as many other small operators.
•             Consumer brands business established in 1999.
•             195 staff working with 38 distribution partners to make high quality dairy products available in more than 60,000 Indonesia outlets.
•             Anlene is the leading high calcium milk brand in Indonesia.

•             Among Fonterra's fastest growing businesses in Asia.

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