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Ireland eyes Indonesia as new dairy market
Ireland has sent its first trade mission to Indonesia to take the early steps in securing a larger slice of the pie in the latter’s dairy market, which relies on imports to fulfill its rising domestic demand
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span>Ireland has sent its first trade mission to Indonesia to take the early steps in securing a larger slice of the pie in the latter’s dairy market, which relies on imports to fulfill its rising domestic demand.
Indonesian Food and Beverage Association (GAPMMI) secretary-general Indrayana highlighted how Indonesia could only produce three out of every 17 liters of milk consumed per citizen each year.
The remaining 14 liters are imported predominantly from New Zealand (29 percent), the United States (21 percent) and Australia (18 percent), with 32 percent from other countries.
Ireland, meanwhile, contributes less than 6 percent to Indonesia’s imports of around 3.2 million tons of fresh milk each year.
“Not all goods can be provided by our own country, so Indonesian food and beverage companies have to think about global value chains [including Ireland],” Indrayana told the mission in a seminar with their Indonesian partners in Jakarta on Wednesday.
The 40-member trade mission was led by Irish Agriculture, Food and the Marine Minister Michael Creed.
Indrayana later told reporters that Indonesian companies might import more dairy from Ireland, which sent its exports to over 180 countries, indicating that its products had higher comparative advantage.
He, however, reminded the trade mission that, in order to do business with Indonesian partners, Irish companies had to support Indonesia’s target of increasing its domestic fresh milk production to 40 percent of the total demand by 2020 and to 60 percent by 2025.
He hinted that there was a good opportunity to expand milk production on islands outside Java, which currently contributed less than 1 percent of all domestic fresh milk production.
There was also an opportunity for Irish companies to collaborate with Indonesian partners to improve the efficiency of local milk producers and also start integrated dairy manufacturing, he said.
Creed told reporters at a press briefing that the Irish government had a warehouse of agricultural research knowledge, dubbed the Sustainable Food Systems Ireland (SFSI) that it was willing to share with Indonesia if the latter became an international partner.
“We have knowledge on animal husbandry, crop husbandry and genetics,” the minister said.
He added that technologically advanced farming was Ireland’s key to increasing food production efficiency while enticing the youth to work in agriculture.
Ireland is currently ranked the most “food secure” nation in the world according to the 2017 Global Food Security Index compiled by the Economist Intelligence Unit.
Tara McCarthy, CEO of the Irish Food Board, a state agency tasked with promoting Irish food products, said that the trade mission was also bent on increasing awareness of Irish dairy products in Indonesia.
She said that her organization had done some preliminary research on the Indonesian market and found that Ireland could carve out a space in the hearts of local consumers by stressing that their dairy products added value to existing Indonesian foods.
“[But] we haven’t put a value on the Indonesian market yet because we think it may take two to three years before we make an impact from our trade mission,” McCarthy said.
By sending a trade mission, Ireland was aiming to better understand the commercial and regulatory requirements of Indonesia, which included understanding tax policies, import regulations and halal certification, said Padraig Brennan, director of markets and business conversion of the Irish Food Board.
He explained that Creed had met with his Indonesian counterpart to better understand the regulations and was set to arrange a larger intergovernmental trade meeting early next year.
Amalia Tjandra, owner of Indonesia-controlled dairy trader Anta Tirta Kirana, said that her company, which had been working with Ireland-controlled dairy supplier Dairygold since 2013, favored Ireland because it was a reliable and Go-Green-branded producer.
Ireland’s only drawback was its distance from Indonesia, which requires around 50 days in delivery time compared to around 20 days from New Zealand and Australia. (nor)
