New Zealand dairy giant Fonterra is to build a plant for its consumer brands on sale in Indonesia.

Fonterra blends and packs its Anlene, Anmum and Anchor Boneeto brands in New Zealand - or uses co-packers in Asia and Indonesia - before distributing them throughout the country.

However, CEO Theo Spierings said Fonterra wanted to build the facility to prepare for the growth forecast in Indonesia's dairy sector.

"Dairy demand in Indonesia is forecast to grow by around 50% over the next eight years. With such rapid growth forecast in Indonesia, we want to increase our packing and blending capabilities on the ground to support the long term growth of our business," he said today (17 April).

Fonterra, which has been selling consumer products in Indonesia since 1999, plans to work with other companies to run the new plant. "We are currently talking with prospective partners and looking at possible structural options and locations. We expect to have the new plant operational within 18 months," Maspiyono Handoyo, director of Fonterra's branded business in Indonesia, added.

Last week, Fonterra announced plans to open two more farms in China. The investment would give it five farms in China's north-eastern Hebei province.