Located just south of the Indonesian city of Bogor and 70km from the capital Jakarta, Milko is a private dairy company that specialises in consumer dairy products for the Indonesian market.
Milko is a small dairy company and the plant has a 20,000t annual capacity.
The company predominantly makes a range of dairy-based consumer drinks which it sells under the Milky Moo brand aimed at four-year-olds up to teenagers.
The company also makes a line of milk drinks that contain cereal and are flavoured with mung bean or chocolate.
As well as its consumer dairy business, Milko also contract-manufactures products for customers such as Nestlé and Japanese nutrition giant Kalbe.
Dairy consumption
According to Lira Oktaviani, operations director with Milko, dairy consumption in Indonesia is the lowest in Asia at just 12 to 13 litres per person per year. This is below neighbouring countries in South East Asia such as China where dairy annual consumption is 15 to 16 litres per person and in Malaysia where it is as high as 40 litres per person.
Dairy consumption in Indonesia is the lowest in Asia at just 12 to 13 litres per person per year
Despite the low consumption, dairy demand is growing rapidly in Indonesia.
“The market for milk drinks is growing at 10% to 20% every year in Indonesia,” says Oktaviani.
The growth of formal cafes and restaurants in the urban centres in Indonesia is also driving demand growth for fresh milk, she adds.
Cold chain
The biggest challenge for companies in Indonesia, which has a hot tropical climate, is chilled distribution.
Although the country’s economy is rapidly growing, much of the retail channels, particularly outside of the large cities, remains incredibly informal, with little or no cold chain storage. As such, heat-treated or UHT products are essential.
Indonesian dairy companies such as Milko are heavily reliant on imports of dairy powders such as sweet whey powder and SMP to run their businesses as local milk production is too small to meet demand.
“Indonesia is only 25% self-sufficient in milk production,” says Oktaviani.
Domestic milk production in Indonesia can’t keep up
“The government has tried to reduce the country’s milk import ratio by encouraging dairy farmers to produce more milk. But domestic milk production in Indonesia can’t keep up because demand is growing much faster than the local supply,” she says.
The average dairy farmer that supplies fresh milk to Milko has just 10 to12 dairy cows. The company says it is working with its farmer suppliers to try and improve the quality of the milk and educate farmers on hygiene and the need to cool milk.
To make up for the shortfall in supply, Indonesian dairy companies such as Milko import product from the US, New Zealand and Australia.
At Milko, most of the company’s sweet whey powder needs are supplied by a US dairy company.
Oktaviani says the most important attributes he looks for in a dairy ingredient supplier is the quality of the product and Halal certification.
Halal certification is a key requirement for us
“Over 60% of the population is Muslim, so Halal certification is a key requirement for us. We also look for quality,” he explains.
“However, it’s also very important to be competitive on price because Indonesia is a really competitive market. We can get product from suppliers from New Zealand, Australia and the US who all can deliver good quality.”
Oktaviani is frank when she says Ireland is little known today in Indonesia as a supplier of dairy ingredients or powders.
Bord Bia chief executive Tara McCarty presents Milko's CEO with the story of Irish dairy.
However, he says Ireland could learn from the US which came to Indonesia over 20 years ago and had no reputation within the country as a dairy supplier. At the time, Indonesia’s dairy import needs were almost totally met.
The US Dairy Export Council (USDEC) set about growing awareness of US dairy in Indonesia and today US companies have eked out a 15% share of the market.
He said Ireland needs to do the same and build its name in the market with domestic companies such as Milko as a go-to source of dairy products.
Read more
Ireland faces stiff competition in Indonesia's dairy market
Watch: Trade mission jets off to Indonesia and Malaysia
Located just south of the Indonesian city of Bogor and 70km from the capital Jakarta, Milko is a private dairy company that specialises in consumer dairy products for the Indonesian market.
Milko is a small dairy company and the plant has a 20,000t annual capacity.
The company predominantly makes a range of dairy-based consumer drinks which it sells under the Milky Moo brand aimed at four-year-olds up to teenagers.
The company also makes a line of milk drinks that contain cereal and are flavoured with mung bean or chocolate.
As well as its consumer dairy business, Milko also contract-manufactures products for customers such as Nestlé and Japanese nutrition giant Kalbe.
Dairy consumption
According to Lira Oktaviani, operations director with Milko, dairy consumption in Indonesia is the lowest in Asia at just 12 to 13 litres per person per year. This is below neighbouring countries in South East Asia such as China where dairy annual consumption is 15 to 16 litres per person and in Malaysia where it is as high as 40 litres per person.
Dairy consumption in Indonesia is the lowest in Asia at just 12 to 13 litres per person per year
Despite the low consumption, dairy demand is growing rapidly in Indonesia.
“The market for milk drinks is growing at 10% to 20% every year in Indonesia,” says Oktaviani.
The growth of formal cafes and restaurants in the urban centres in Indonesia is also driving demand growth for fresh milk, she adds.
Cold chain
The biggest challenge for companies in Indonesia, which has a hot tropical climate, is chilled distribution.
Although the country’s economy is rapidly growing, much of the retail channels, particularly outside of the large cities, remains incredibly informal, with little or no cold chain storage. As such, heat-treated or UHT products are essential.
Indonesian dairy companies such as Milko are heavily reliant on imports of dairy powders such as sweet whey powder and SMP to run their businesses as local milk production is too small to meet demand.
“Indonesia is only 25% self-sufficient in milk production,” says Oktaviani.
Domestic milk production in Indonesia can’t keep up
“The government has tried to reduce the country’s milk import ratio by encouraging dairy farmers to produce more milk. But domestic milk production in Indonesia can’t keep up because demand is growing much faster than the local supply,” she says.
The average dairy farmer that supplies fresh milk to Milko has just 10 to12 dairy cows. The company says it is working with its farmer suppliers to try and improve the quality of the milk and educate farmers on hygiene and the need to cool milk.
To make up for the shortfall in supply, Indonesian dairy companies such as Milko import product from the US, New Zealand and Australia.
At Milko, most of the company’s sweet whey powder needs are supplied by a US dairy company.
Oktaviani says the most important attributes he looks for in a dairy ingredient supplier is the quality of the product and Halal certification.
Halal certification is a key requirement for us
“Over 60% of the population is Muslim, so Halal certification is a key requirement for us. We also look for quality,” he explains.
“However, it’s also very important to be competitive on price because Indonesia is a really competitive market. We can get product from suppliers from New Zealand, Australia and the US who all can deliver good quality.”
Oktaviani is frank when she says Ireland is little known today in Indonesia as a supplier of dairy ingredients or powders.
Bord Bia chief executive Tara McCarty presents Milko's CEO with the story of Irish dairy.
However, he says Ireland could learn from the US which came to Indonesia over 20 years ago and had no reputation within the country as a dairy supplier. At the time, Indonesia’s dairy import needs were almost totally met.
The US Dairy Export Council (USDEC) set about growing awareness of US dairy in Indonesia and today US companies have eked out a 15% share of the market.
He said Ireland needs to do the same and build its name in the market with domestic companies such as Milko as a go-to source of dairy products.
Read more
Ireland faces stiff competition in Indonesia's dairy market
Watch: Trade mission jets off to Indonesia and Malaysia
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