What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
Chairman John Wilson says the plant is Fonterra's largest investment in ASEAN in the last decade and will support the growth of Fonterra's brands – Anmum, Anlene and Anchor Boneeto – in Indonesia.
"Fonterra has been supplying high quality dairy nutrition to Indonesia for more than 30 years and today it is one of our most important global markets. The opening of our new plant is an exciting step forward in our relationship with the country and local dairy industry," he says.
Fonterra managing director Asia, Middle East, Africa (AsiaMEA) Johan Priem says the investment strategically positions Fonterra to help meet Indonesia's growing demand for dairy nutrition.
"The country's large and increasingly affluent population is looking for highly nutritious foods for all ages. This is fuelling dairy demand growth, which is expected to increase by five per cent every year to 2020.
"Our new plant has the capacity to pack around 16,000 MT of dairy ingredients a year – that's a pack of Anlene, Anmum and Anchor Boneeto every second, or 87,000 packs every day, which will go a long way in helping Fonterra meet this growing demand for dairy."
Priem says the plant located in Cikarang, West Java is already having a positive impact on the local community.
"We used local partners for the construction and, when running at full capacity, our new site will employ a team of 160 local employees meaning the investment will continue to flow through the local community.
"The site also utilises Cikarang's dry port, allowing us to ensure all of our operations are located in one area. This will help us drive logistical efficiencies," he says.
The plant received an A grade rating from regulators during its final stages of testing and commissioning, and has been in commercial operation since June 2015.
Indonesia's Deputy Minister for Food and Agriculture and Coordinating Minister of Economic Affairs, Ibu Ir. Musdhalifah Machmud and New Zealand's Minister of Local Government, Social Housing, State Services Paula Bennett joined Wilson at the official opening of the site along with senior executives from Fonterra.
