Chinese dairy producer Mengniu hopes to convert reluctant Indonesians into yogurt drinkers
- Mengniu Dairy opened the first plant in Southeast Asia in November
- Chinese dairy producer faces competition from domestic and foreign rivals
Mengniu Dairy, China’s second-largest dairy product producer, said it faced challenges in securing the supply chain for production when opening a new milk-based drink plant in Indonesia in November.
This is the latest example of Chinese dairy producers venturing abroad to secure safe sources of supply since the industry’s melamine scandal 10 years ago.
Lu Minfang, chief executive of Mengniu Dairy, said it was an ordeal to secure raw materials and packaging needed to get the project into operation after a tour of the company’s facilities in Berkasi on the eastern border of the capital Jakarta.
“Indonesia lacks support for industries. It is not as good as more developed countries,” said Lu. “The [development] here is still relatively immature.”
Meanwhile, Mengniu faced low penetration rate of yogurt, its key product, in the southeast Asian market, particularly Indonesia. The country, with a population of 260 million people, the biggest in the region, is the latest hot market for Chinese companies.
It will sell its dairy products under its YoyiC brand in Indonesia. All the products will be sold in the local market for now.
