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Fonterra benefits from growing milk consumption
Milk business: Dairy giant Fonterra Brands Indonesia president director Achyut Kasireddy (left to right), New Zealand Prime Minister John Key and Trade Minister Todd McClay share a conversation during an event at Fonterra manufacturing plant in Cikarang, West Java, on Tuesday
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Milk business: Dairy giant Fonterra Brands Indonesia president director Achyut Kasireddy (left to right), New Zealand Prime Minister John Key and Trade Minister Todd McClay share a conversation during an event at Fonterra manufacturing plant in Cikarang, West Java, on Tuesday. Key will end on Wednesday his three-day visit to Indonesia, during which he has brought along dozens of executives from various New Zealand companies in an effort to strengthen economic ties and consolidate several investment opportunities. (JP/Moses Parlindungan)
New Zealand dairy firm Fonterra Brands Indonesia has reaped benefits from Indonesia’s growing milk consumption, becoming New Zealand’s poster boy for success.
The company, part of multinational dairy cooperative Fonterra, sees Indonesia as one of its priority markets, with huge promise amid dairy product demand growth.
According to the Agriculture Ministry, annual household consumption of dairy products rose to 313 ounces per capita in 2014 from only 209 ounces in 2013.
As demands grow, Fonterra Brands Indonesia president director Achyut Kasireddy said on Tuesday that it was focusing to fulfill the capacity of its plant to “cater to the demand of dairy products for the next three years”.
It operates a Rp 340 billion (US$25.98 million)-worth plant in Cikarang, West Java. The plant commenced operations last September and is Fonterra’s biggest investment in Southeast Asia in the last decade.
Utilization rate of the plant has hit 60 percent of its full potential to produce 16,000 tons of milk powder a year and up to 87,000 packages of dairy products a day. It markets several milk brands in Indonesia, including Anlene, Anchor Boneeto and Anmum.
Kasireddy said Fonterra may expand its investment in the country should it utilize the plant well.
It deems upcoming investment as important to accommodate changes in consumers’ taste and preference, resulting in different product types, such as powders, liquids and any other formats.
“For the future, there may be other opportunities that we will seriously look at. There will be a new concept and they are all in the concept stage right now,” he said without going into details.
He claimed that Fonterra Brands Indonesia had also substantially invested in training for farmers to boost their production. It imports around 75 percent of its ingredients for milk powder from New Zealand and hopes to leverage the farmers’ products in the future.
“As we keep helping local dairy communities transform their farming and enhance their production, the country is going to have high quality milk produced locally that will be available for companies like us,” he said.
New Zealand Prime Minister John Key said during his visit to the plant that the company could be at the forefront of the growing demand for dairy products in Asia.
“These are markets where, inevitably, as the consumer base gets wealthier, demand grows not only for more protein but for more security and quality in its food. That’s where Fonterra fits in,” said Key in his speech.
He said the plant was an example of how New Zealand and Indonesia could benefit from investment in the dairy industry.
“This [Fonterra’s plant] is living proof of work by the New Zealand government to pave way for New Zealand companies to develop a footprint and grow New Zealand’s reach to the world,” Key said.
Key was accompanied by New Zealand Trade Minister Todd McClay and a delegation of New Zealand businesspeople for the plant visit, which was part of his two-day visit to Indonesia. He met with President Joko “Jokowi” Widodo on Monday and discussed economic cooperation. (mos)
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