Nestlé Indonesia looks to dairy development as construction of new plant starts

By Jim Cornall

- Last updated on GMT

The new plant will produce liquid milk Bear Brand and ready-to-drink beverages Milo and Nescafé. Pic: Nestlé Indonesia
The new plant will produce liquid milk Bear Brand and ready-to-drink beverages Milo and Nescafé. Pic: Nestlé Indonesia

Related tags Nestlé Indonesia Milo Nescafe Dairy

Today, Nestlé Indonesia started the construction of its new Nestlé Bandaraya factory in Batang, Central Java.

The new factory will be built on 20 hectares of land, and will produce liquid milk Bear Brand and ready-to-drink beverages Milo and Nescafé.

It will provide about 200 new jobs and open a new business opportunity for the community for dairy development.

“Despite the Covid-19 pandemic, we are optimistic about the growth opportunities in Indonesia, and our decision to invest for the new factory and capacity expansion of our existing factories is a demonstration of our long term commitment to invest in Indonesia, with primary focus to create more employment, to utilize as much as possible local raw materials, and to produce quality and nutritious food and beverages products that are safe and tasty for our consumers, and to contribute to the development of Indonesian economy,”​ said Ganesan Ampalavanar, president director of PT Nestlé Indonesia.

The new Nestlé Bandaraya factory at the Batang Industrial Park will be ready for commercial production in 2023.

Luhut Binsar Pandjaitan, Coordinating Minister for Maritime Affairs and Investment of the Republic of Indonesia, said, “We appreciate Nestlé Indonesia's decision to invest $220m for its new Bandaraya factory, in addition to the $100m investment done by Nestlé Indonesia in 2019 for capacity expansion in its three factories that have already been completed in 2020. This investment reinforces Nestlé’s already strong presence and commitment to Indonesia which is fully supported by the conducive investment climate created by the Government.”

PT Nestlé Indonesia also signed a memorandum of understanding with the regional government of Batang, aimed to develop a partnership with prospective dairy farmers and farmer groups to develop dairy farming and fresh milk raw materials for the new factory.

Minister of Investment/Chairman of Investment Coordinating Board of Republic of Indonesia, Bahlil Lahadalia, said, “We welcome the investment of Nestlé for its new factory and the capacity expansion of its existing factories. Nestlé Indonesia will collaborate with Batang regional government to develop smallholder dairy farming in Batang. This will be very good as it will be beneficial for dairy farmers and rural economic in Central Java.

“The collaboration between investor and regional entrepreneurs from the location of investment has become the focus of the Ministry of Investment/Investment Coordinating Board, as we expect that investment will create a positive economic multiplier effect. What has been done by Nestlé Indonesia is a good example."

Since 1975, Nestlé Indonesia has been partnering with dairy farmers and cooperatives in East Java by providing technical and financial assistance to improve the productivity and quality of fresh-milk production.

Every day, Nestlé Indonesia procures about 750,000 liters of fresh milk from 26,000 dairy farmers grouped under 42 dairy cooperatives and farmers groups to fulfill the fresh-milk requirement of Kejayan Factory in East Java.

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