Arla to boost South East Asia presence through Indonesian joint-venture

By RJ Whitehead

- Last updated on GMT

The joint-venture will be named Arla Indofood Sukses Makmur.
The joint-venture will be named Arla Indofood Sukses Makmur.

Related tags South east asia Southeast asia

Arla Foods expects to expand its position in South East Asia through a joint-venture with one of Indonesia’s leading dairy players.

The tie-up with Indofood CBP Sukses Makmur (ICBP), which also holds a strong position in the country’s FMCG market, will boost the Denmark-Based co-operative’s presence in the region’s biggest market.

One of the market-leaders in the consumer branded products sector, the Indonesian corporation’s portfolio includes noodles, dairy, snack foods, seasonings, nutrition and beverages. It also operates a packaging business, which produces flexible and corrugated packaging to support its main businesses.

With more than 50 plants across Indonesia, most of ICBP’s products are available throughout the archipelago. Its lines are also present in more than 60 countries around the world.

The move is part of Arla’s strategy to grow in the region, outlined in its Good Growth 2020 plan, the company said in a statement.

Its aim is to focus on six emerging markets, including South East Asia, from which it expects to achieve 50% of growth by the end of the decade.

Tim Ørting Jørgensen, executive vice-president of Arla’s international business, singled out ICBP’s “strong experience​” in dairy, as well as its extensive distribution network in Indonesia “with access and relationships to all key retailers​”.

Biggest market

Teaming up with ICBP will allow us to offer our high-quality dairy products to more Indonesian consumers,​” he said.

Arla’s reputation as a leading global food brand and its association with European quality will be a boon for ICBP, the South East Asian company’s director, Axton Salim, said, adding: “This collaboration will complement our existing dairy business in Indonesia​.”

With a population of more than 250m, half of whom are under the age of 30, Indonesia is the biggest market for nutritious dairy products in the region.

Indonesia is an important market for anyone who wants succeed there. Demand for dairy is growing, and we believe we can offer Indonesian consumers the dairy products they need as part of a healthy and balanced diet​,” Ørting Jørgensen added.

The joint-venture will be named Arla Indofood Sukses Makmur, with Arla owning a one-share majority of the new company, which will handle the sales, distribution and production of dairy products.

Details of its product portfolio, production and launch dates will not be made public at this time, said Arla, which manufacturers a raft of well-known international brands, including Lurpak, Castello and Puck. 

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