Al-Ain Farms to Invest in Indonesia’s Dairy Sector

Emirati dairy giant Al-Ain Farms is set to invest in Indonesia as the Southeast Asian country seeks to meet its milk demand without relying on imports. However, the government did not disclose the investment value of this project.

The Indonesian Agriculture Ministry said that it had signed a memorandum of understanding (MOU) with Al Ain Farms, that claims to have one of the most advanced farms in the Middle East. The deal was among the key outcomes of President Prabowo Subianto’s bilateral talks with Mohamed bin Zayed Al Nahyan (MBZ) in Abu Dhabi on Wednesday.

Agung Suganda, a senior official in the Agriculture Ministry, said on Thursday that the investment would focus on ramping up the production and quality of milk produced in the country. Indonesia had promised to give Al-Ain Farms an array of incentives, including exempting the latter from import duties for livestock and industrial equipment. The company can also enjoy low-interest financing schemes and livestock insurance programs.

“We welcome Al-Ain Farms to be part of our efforts to accelerate milk sufficiency. We hope that this investment can open up job opportunities and improve the welfare of local farmers through partnership schemes,” Agung said.

The Emirati investor would develop dairy cattle farms in locations listed in Indonesia’s so-called national strategic projects for 2025-2029. However, Agung did not specify in which province Al-Ain Farms would build the dairy farms, although the nutritious meal program’s reach encompasses the entire country.

It may be recalled that the Indonesian President has recently announced a list of 77 projects, including the ambitious school-feeding program, that his government would focus on over the coming years.

The nation-wide project sees Indonesia feeding students nutritious meals every school day, a program that was at the center of Prabowo’s election campaign.

Each lunch menu typically includes milk to boost the kids’ calcium intake. At present, Indonesia imports approximately 80% of its milk with a deficit of 4.9 million tons. The free meal program has caused the national fresh milk appetite to soar by 3.6 million tons. Amid the soaring demand, Indonesia wants to become fully self-sufficient in milk by 2029.

Vietnamese Company Too

Besides, Al-Ain Farms, Vietnamese dairy company TH Group is expected to invest in a similar project in Indonesia.

Agriculture Minister Andi Amran Sulaiman, who met with TH Group’s chairperson Thai Huong in February, promised similar incentives to TH Group while saying that the government had prepared some areas in Central Kalimantan, as well as South and Central Sulawesi that would be suitable for large-scale dairy production.

Indonesia intends to bring in 200,000 better-quality, foreign dairy cows for breeding throughout 2024.

By having foreign investments, Indonesia can improve the quality and production volume of its fresh milk without adding a burden to the state spending. Data showed that Indonesia recorded $32.7 million in foreign direct investment inflows from the UAE throughout 2024.