Indonesia's Dairy Industry Overview

Indonesia is making significant strides in the Southeast Asian dairy market, supported by strategic government initiatives and international partnerships. These efforts, along with increased investments, sustain the country's growing influence in the dairy industry.

Dairy Cattle and Milk Production

Indonesia is home to approximately 600,000 dairy cattle, contributing to a substantial milk production volume of around 950 million liters annually. This production is crucial for fulfilling both domestic needs and export demands.

Milk Processing

With advancements in milk processing capabilities, Indonesia processes about 700 million liters of milk each year. These advancements are pivotal for enhancing local consumption and impacting the global market.

Cheese, Milk Powder, and Whey Production

Although cheese production is in its nascent stages, it has reached approximately 5,000 metric tons annually, reflecting strong growth potential. Additionally, Indonesia produces about 20,000 metric tons of milk powder and 7,000 metric tons of whey each year, catering to both domestic consumption and export opportunities.

Key Dairy Enterprises

• Indolakto
• Frisian Flag Indonesia
• Greenfields Indonesia
• Cimory

Leading Dairy Farms

• PT Ultra Jaya Milk Industry Tbk
• PT Greenfields Indonesia

Exports and Imports

Indonesia has experienced a near doubling of its dairy exports, with a 98% increase in recent years. Despite this growth, the country continues to import approximately 3 billion liters of dairy products annually, primarily consisting of milk powder and various cheese types.

Significant Market Events

The Indonesian dairy sector is on a growth path supported by investments and governmental backing. Efforts to improve farmer-industry cooperation aim to enhance production quality and sustainability. However, challenges remain in achieving dairy self-sufficiency amid evolving import conditions. Noteworthy initiatives include the plan to import 200,000 dairy cattle by 2025 and 1 million by 2029 to boost milk production. Strategic partnerships, such as PT ABC Kogen Dairy's collaboration with Morinaga Milk Industry Co., and investment deals with the UAE are shaping the industry’s future. Indonesia's significant trade agreement with New Zealand aims to simplify halal certification for dairy and red meat imports, enhancing market entry for Kiwi exporters. Moreover, the country remains a significant export market for Australian and U.S. dairy products, facilitated by favorable trade agreements and reduced tariffs. A groundbreaking new trade framework between the United States and Indonesia aims to eliminate tariffs and address non-tariff barriers that have previously hindered the entry of American dairy products into the Indonesian market. However, the industry has faced challenges, including a financial kickback case involving an Indonesian customer and Simon Stewart.

Increasing Dairy Consumption

In Indonesia, the demand for dairy products is on the rise, aligning with the market growth trend. The digital transformation in Indonesia's dairy sector is marked by the integration of an Enterprise Resource Planning (ERP) system by the South Bandung Livestock Cooperative in Pangalengan, West Java, improving efficiency and financial access as part of the ILO's Promise II Impact project. Indonesia's dairy sector is the focus of a digital transformation initiative supported by Switzerland, aiming at digital transformation and financial inclusion within Indonesia’s dairy sector, enhancing operational efficiency and financial access for farmers. Indonesia is a top importer of milk powder, along with China and India, contributing to the high consumption in the Asia-Pacific region.

Modified: 2025/10/09

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