April 17, 2012

Dairy giant Fonterra to invest in plant in Indonesia

Fonterra will invest in a blending and packing plant in Indonesia to support the growing demand for dairy nutrition in Indonesia, enabling local expansion of consumer brands Anlene, Anmum and Anchor Boneeto throughout Indonesia.

Fonterra CEO Theo Spierings made the announcement as part of the New Zealand Prime Minister-led Business Mission in Indonesia this week.

Mr Spierings said Asia is leading the world in dairy demand growth and Indonesia is a big part of this demand. Indonesia is Fonterra's tenth biggest market and is among Fonterra's fastest growing businesses in Asia.

"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".

Fonterra currently packs and blends its consumer brands - Anlene, Anmum and Anchor Boneeto - either in New Zealand or through co-packers in Indonesia or in Asia, before distributing to the Indonesia market.

"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.

Mr Spierings added Fonterra's plans to invest in Indonesia are part of the company's wider global strategy to sharpen its focus on the ASEAN region.

"We are committed to providing top quality dairy nutrition to people across ASEAN. Global dairy demand is set to increase by 100 billion litres over the next 8 years and 60% of this growth is expected to come from China, India and Indonesia. 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."