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Diageo expands factory in Bali, strengthens Indonesia as Southeast Asia supply hub
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L
eading global alcoholic beverage company Diageo has expanded its footprint in Indonesia with a new extended factory facility in Tabanan, Bali.
The new 8,800 m2 facility underscores Diageo's unwavering commitment to Indonesia, positioning it as a pivotal supply hub for other Diageo markets in the Southeast Asia region.
Established in 2014, the Tabanan site produces several brands for the Indonesian market including Smirnoff and Smirnoff Ice vodkas, Captain Morgan rum and Gilbey’s gin.
In December 2021, Diageo began exporting the Smirnoff and Captain Morgan brands produced at the factory to Thailand, the Philippines, Timor Leste, Singapore and Malaysia. To date, the Asia Pacific region contributes 19 percent of the company’s worldwide sales.
John O'Keeffe, President & CEO of Diageo Asia Pacific, Global Travel and India, emphasized the pivotal role of the Tabanan factory and the expansion of the new facility.
"The expansion of our strong supply hub in Bali is key to our wider regional strategy to better service customers and consumers across Asia Pacific and contribute to Diageo’s global ambition," he said.
Daru Mukarta, Supply Chain Director of PT Langgeng Kreasi Jayaprima (Diageo Indonesia), said the extension will be able to increase the factory’s production capacity and logistics ability, therefore expanding the company’s export markets and export product variety.
“Our long term vision is to improve PT Langgeng Kreasi Jayaprima’s factory capacity to not only serve as the supply hub for the Southeast Asian market, but also the Asia Pacific region,” he said, adding that Bali’s geographical location and proximity to the region offers a more attractive logistic costs and higher responsiveness compared to European production facilities.
“We’ve observed a significant growth among Southeast Asia’s middle class, where celebrations have become an important part of their lifestyle. Through our products, especially those produced by PT Langgeng Kreasi Jayaprima, we want to be a part of Southeast Asia’s celebrations and lifestyle.”
The factory, which complies with international standards, has been certified ISO 9001, ISO 45001 and FSSC 22000 Ver 6. In line with Diageo’s global commitment to sustainability, the new facility will use 95 percent less energy than traditional production methods once operation commences, contributing to Diageo's Society 2030: Spirit of Progress 10-year ESG action plan.
According to Daru, PT Langgeng Kreasi Jayaprima consistently implements sustainability initiatives in its factory operations, including using e-Rec certified 100 percent renewable energy, ensuring zero waste to landfill as well as improving water efficiency in its production process, with the latter reducing water waste by 80 percent since the plant started its operation in 2015.
“PT Langgeng Kreasi Jayaprima is the first Diageo Global factory to implement the circular economy concept for vodka production, where outlets can return packaging to the factory to be reused with the same product. This allows our vodka products to be more competitive, improve the company’s reputation among sustainability-minded consumers and support our commitment towards our sustainability goals,” said Daru.
Source: Diageo
