Danone Indonesia focusing on infant nutrition growth after dairies sale

Danone Indonesia focusing on infant nutrition growth after dairies sale

Danone plans to invest in expanding its remaining businesses in Indonesia following the sale of its fresh dairy unit to Indofood, the French group has told just-food.

"Danone will pursue its investments in the waters and early life nutrition activities in order to keep growing strongly in Indonesia in the years to come," a spokesperson Danone told just-food this morning (24 November).

"This [fresh dairy] business represents less than 5% of our turnover in Indonesia. In Indonesia, Danone is the market leader in the waters and early life nutrition categories. Together, these two activities represent over EUR1bn (US$1.24bn) of turnover."

Danone's infant formula business in Indonesia includes the SGM and Sari Husada brands. Its bottled water arm sells products under lines like Aqua and Mizone.

The company struck a deal to sell Danone Dairy Indonesia, its fresh dairy business, to local food giant Indofood late Friday. Indofood's dairy unit, Indolakto, will take full control of Danone's fresh dairy production and brands in the market, where it produces Milkuat fortified dairy targeted at 5- to 12-year-old children. 

The Danone spokesperson said the sale would allow Indolakto to "ensure the long-term sustainability of the company". For its part, Indofood said Indolakto would benefit from a "stronger presence in the dairy industry in Indonesia" and additional fresh dairy capacity to meet demand in western Indonesia.

Indofood added: "Sold under various packaging formats and recipes with an affordable price range, Milkuat is one of the major players in the liquid milk category."

The deal, for an undisclosed sum, is expected to close next month and remains subject to regulatory approval.

Click here for our prior news coverage of the deal and click here for just-food's latest insight into the Indonesian dairy category.