Denmark-based dairy giant, Arla Foods has entered into a dairy joint venture (JV) with Indonesia’s PT Indofood CBP Sukses Makmur Tbk (ICBP), as part of its goal to strengthen its presence in the growing Indonesian market, at the same time strengthening its ASEAN presence.
The joint-venture will be called Arla Indofood Sukses Makmur. Arla will acquire the majority stake in the company (50% and 1 share) while Indofood will own the remainder. The JV will handle sales, distribution and production of dairy products, although the companies have not disclosed information regarding new products or production plans at this time.
Indofood is arguably Indonesia’s largest food conglomerate with product portfolio ranging from dairy products, instant noodles to food seasonings and pasta. Indofood’s product has strong following not only in Indonesia but also in other neighboring markets.
Tim Orting Jorgensen, Executive Vice President of Arla Foods international business said, “We are pleased to enter into a partnership with ICBP which has strong experience with dairy and has an extensive FMCG distribution network in Indonesia with access and relationships to all key retailers.”
Axton Salim, Director of Indofood added, “We are pleased to have the opportunity to team up with Arla Foods, one of the strongest dairy companies in the world with a strong innovation and research platform.”
The JV is part of Arla’s strategy to grow in the region, outlined in its Good Growth 2020 plan, which is to focus on 6 emerging markets, including South East Asia, from which it expects to achieve 50% of growth by the end of the decade.
With a population of more than 250 million, half of whom are under the age of 30, Indonesia offers the biggest market for nutritious dairy products in the region.
Arla manufacturers well-known international brands including Lurpak, Castello and Puck.