Why Fonterra accepted defeat in the dairy aisle
OPINION: Fonterra's sale of its consumer dairy business to Lactalis is a clear sign of the co-operative’s failure to compete in the branded consumer market.
Costing about $36 million, the plant will support the growth of its market leading consumer brands Anlene, Anmum and Anchor Boneeto.
Located in West Java, the plant is Fonterra's first manufacturing facility in the country and its largest investment in a new manufacturing facility in ASEAN in the last 10 years.
Director General of Agro Industry at Indonesia's Ministry of Industry, Panggah Susanto, joined Fonterra at an event in Jakarta to mark the official start of construction today.
Pascal De Petrini, managing director of Fonterra Asia Pacific, Middle East & Africa (APMEA), says that Fonterra Brands Manufacturing Indonesia Cikarang Plant will allow Fonterra to meet the ever-growing demand for dairy nutrition in Indonesia.
"Demand for dairy in Indonesia is expected to grow by around 5% each year to 2020, and our investment in this facility will help support this growth.
"This new blending and packing facility is the next step for our business in Indonesia, where we already have a strong and established presence. The investment will support the local expansion of Fonterra's consumer brands, and increase our on-ground capabilities which are critical to the long-term growth of our business," says De Petrini.
The plant is expected to be operational by March 2015 and will create at least 150 full-time positions in the Cikarang and wider Bekasi regency communities where it is based.
Once complete, the plant will have the capacity to pack and blend 12,000 tonnes of advanced and base nutrition milk powder products annually, which is the equivalent to about 87,000 packs of Anlene, Anmum, and Anchor Boneeto every day.
Paul Richards, president director, Fonterra Brands Indonesia, says that as well as the financial investment, Fonterra Brands Manufacturing Indonesia Cikarang Plant will bring Fonterra's world-class dairy manufacturing in design standards, knowledge, expertise and technology from New Zealand to Indonesia.
"It will also provide local staff with training and development opportunities in advanced food safety, quality and operational standards," says Richards.
"We are investing in building the right infrastructure and developing local capabilities to produce our trusted portfolio of brands and meet the ever-growing demand for dairy in Indonesia."
Indonesia has been an important part of New Zealand's global dairy trade for more than 30 years, when New Zealand began selling bulk dairy ingredients to Indonesian companies.
Currently, Indonesians consume 11 litres of milk per capita, which is well below the average consumption of neighbouring nations such as Singapore where consumption is 51 litres per capita.
"We are firmly committed to working closely with government, industry and community partners to make quality dairy nutrition available to everybody, everyday, and today's announcement is our next step in that commitment," says Richards.
Fonterra Brands Indonesia is amongst the fastest growing companies in Fonterra, and is one of the largest contributors to Fonterra's Asian business. Fonterra has 194 staff working with distribution and retail partners to make high quality dairy products available in mor
