Interview: New Yili Group ice cream production facility in Indonesia

Upon completion of its second phase, it will become the country's largest ice cream factory with a daily production capacity of 4m ice cream products.

Yili said the facility was established due to the popularity of Joyday ice cream, a brand that has rapidly expanded to 260 local cities in 26 provinces, covering nearly all of Indonesia, since its entry into the market in 2018.

Dairy Reporter had the opportunity to speak with Dr Zhanyou Yun, assistant president of Yili Group, about the development.

How important is the Indonesian market to Yili, given its large population?​

With about 270m people, Indonesia is the world’s fourth most populous country and one of the world’s largest consumer markets. In recent years, the consumption of dairy products in Indonesia has been increasing, making Indonesia the largest ice cream market in Southeast Asia. However, the current per capita annual milk consumption in Indonesia is 16.9kg, which is still lower than that of other ASEAN countries. For example, the per capita annual milk consumption is 36.2kg, 22.2kg, and 17.8kg in Malaysia, Thailand, and the Philippines, respectively.

In light of the increasing per capita income of Indonesians, growing emphasis on health, and the strong demand for ice creams in hot weather, it can be expected that the consumption of dairy products, especially ice cream, will continue to grow in Indonesia and provide further market opportunities in the future.

The Yili Indonesia Dairy Production Base will not only focus on the Indonesian market. As one of Yili Group’s “dual centers” in Southeast Asia (the other center is the company’s Thailand-based ice cream production base), it has also extended its reach to the Southeast Asian market, providing consumers in the region with a diverse range of products.

As an important base facilitating Yili Group’s global expansion, Yili Indonesia Dairy will coordinate and share resources with other subsidiaries of Yili Group in Asia, Europe, America, and Oceania to accelerate the development of the group’s global health ecosystem.

What products do you have in Indonesia currently?​

In October 2018, Yili officially launched the Joyday ice cream brand in the Indonesian market. Thanks to its nutritious and healthy qualities, rich and unique flavors, and strong reputation, the brand has been highly rated and well-received by local consumers.

To date, more than 20 different Joyday ice creams have been rolled out in more than 260 cities in 26 provinces across Indonesia, covering almost the entire country. Joyday ice creams are also exported to other Southeast Asian countries, including Singapore, Thailand, and Myanmar.

The launch of Joyday is just the beginning for the Yili Indonesia Dairy Production Base. In the future, with the gradual increase of production capacity and the continuous improvement of local research and development capabilities, Yili Group will continue to expand its product line in Indonesia to satisfy Indonesians’ increasing demand for high-quality dairy products.

Will you be sourcing ingredients locally?​

To date, we have established cooperative relationships with more than 90 high-quality local suppliers in Indonesia, including suppliers of milk powder, sugar, oil, cocoa products, and packaging paper. Locally sourced raw and auxiliary materials account for 65% of the total quantity of raw and auxiliary materials procured by Yili Indonesia Dairy. Moving forward, Yili Indonesia Dairy will continue to expand its local sourcing.

Is the Indonesian market very different in terms of its local preferences, and how do you determine trends in the country? ​

Compared with consumers in other countries in the Asia-Pacific region, Indonesian consumers pay more attention to the taste and texture of food. Products with strong flavors are more popular among Indonesian consumers. For example, they prefer sweet products as well as products with strong flavors of fresh fruits and chocolate. They also like adding traditional ingredients such as chili and curry to cream, cheese, and other dairy products. Natural plant ingredients (soybeans, wheat protein, natural spices, etc.) are also very popular in the Indonesian market.

With the expansion of the Indonesian middle class, the increase in household disposable income, and the growing health awareness of local consumers, the demand for dairy products is increasing in the Indonesian market. Meanwhile, Indonesian consumers are also giving more priority to nutritional content, healthy, high-quality raw materials, and environmentally friendly packaging.

Therefore, our Joyday ice creams are very popular among local consumers. For example, our Joyday Crunchy Matcha Cheese perfectly combines the taste of matcha and cheese; for consumers who like strong flavors, we also have the Joyday Vanilla Milkshake and the Joyday Cool Blueberry.

How will those Indonesian flavors be introduced in other locations?​

Indonesia is a major producer of tropical fruits such as coconuts and durians. The ice creams currently produced by Yili in Indonesia not only use locally sourced high-quality fruits, but also high-quality raw materials sourced globally, including chocolate from Belgium and milk from Oceania. They not only meet local consumers’ requirements for taste and quality, but also satisfy the needs for personalized, fun, and creative products for consumers in other Southeast Asian countries.

Yili Group’s two production bases in Thailand and Indonesia, known as “Dual Centers in Southeast Asia”, will develop more innovative products for consumers in the region, make full use of local resources, identify the unique features of local markets, and unleash the full potential of Southeast Asian delicacies. With the help of global sales channels, locally favored products can also be promoted around the world.

How do the Southeast Dual Center cooperate on projects? ​

Yili Group’s “Dual Centers in Southeast Asia” will accelerate product R&D and production in Southeast Asia. We will cooperate with Southeast Asian universities and R&D institutions and utilize global innovation resources to develop products that best fit local markets. At the same time, local production bases will help accelerate the application of innovation results, shorten R&D cycles, facilitate faster product launches, and enable more timely responses to consumer demands for product upgrades.

How will the new facility contribute to environmental protection, and when will it be opened officially?​

The first phase of Yili Indonesia Dairy officially started production on December 10, 2021. After the factory becomes fully operational, it will be open to the public and consumers will be able to see the entire production process first-hand.

Since the planning stage, Yili Indonesia Dairy has attached great importance to sustainable development, in alignment with Yili Group’s principle of establishing a “green industrial chain.”

To enable resource recycling, Yili Indonesia Dairy has built a wastewater treatment system with a daily treatment capacity of 2,800 tons. Reclaimed water will be used for the irrigation of plants in the factory. To improve energy efficiency and reduce emissions, the factory uses high-efficiency, energy-saving motors and natural gas boilers, thus cutting electricity consumption by 1.21m kilowatt-hours per year and carbon dioxide emissions by 8,029 tons per year. All solid waste will be effectively managed to protect and safeguard people’s health and the natural environment.

The vibration-absorptive design of the facility and the utilization of low-noise equipment will also help to minimize noise pollution. Furthermore, the factory has developed 17,000 square meters of lawns to create a pleasant ecological environment and help purify the air.