'Rapid growth' in Indonesia drives new Fonterra plant for quicker response to market needs

By Ben Bouckley

- Last updated on GMT

Related tags Milk Indonesia

'Rapid growth' in Indonesia drives new Fonterra plant for quicker response to market needs
Fonterra CEO Theo Spierings says that 'rapid growth' of around 50% forecast for dairy products in Indonesia means that the firm plans to build a new blending and packing plant in the country to help it respond more swiftly to market needs.

The company said its investment (amount undisclosed) would support native Fonterra consumer (mainly powder-based) brands Anlene, Anmum and Anchor Boneeto throughout Indonesia, and Spierings made the announcement as part of a wider New Zealand business mission in Indonesia this week.

Following Fonterra's 'global strategy refresh' - which sees an increased emphasis on emerging growth markets, Spierings said that Asia was leading the way, and within the ASEAN region (Association of Southeast Asian Nation) Indonesia (now Fonterra's 10th largest market), was integral to this.

He said: "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. 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"

Currently, Fonterra packs and blends its consumer brands Anlene (a high calcium milk brand for 'bone health') Anmum (milk formulas) and Anchor Boneeto (powdered and UHT milks for children) either in New Zealand or through co-packers in Indonesia or in Asia, before distributing it to the Indonesia market.

"[But] 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,"​ Mr Spierings said.

Maspiyono Handoyo, president director, Fonterra Brands Indonesia, said that the company wished to work with partners to establish and run the new blending and packing plant in Indonesia, which is now in the planning stage.

"We are currently talking with prospective partners and looking at possible structural options and locations. We expect to have the new plant operational within 18 months, which will adopt current best practices from across Fonterra,"​ he said.

Spierings added that Fonterra's plans to invest in Indonesia formed part of the company's wider global strategy and a sharper focus on ASEAN.

"We are committed to providing top quality dairy nutrition to people across ASEAN. Global dairy demand is set to increase by 100bn litres over the next eight years, and 60% of this growth is expected to come from China, India and Indonesia,"​ he said.

"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,"​ Spierings added.

Related topics Markets Fonterra

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