JAKARTA (TheInsiderStories) - One undisclosed foreign investor has showed its interests to invest US$340 million in the livestock sector, which is integrated with the processing milk in Indonesia. At the initial stage, the investor will build a factory in Malang worth US$15 million, which is scheduled to kick off commercial operation in mid-2016.
The Head of the Investment Coordinating Board (BKPM) Franky Sibarani said that the investor has submitted its investment plan to the investment board. He added in terms of food security, the investment plan will have a positive impact on increasing the locally processed milk from 19.5 percent at present to 40 percent.
Based on calculations of the investor, Franky stated, the production of local dairy farmers through cooperatives will increase to 1.42 billion liters, involving 71 thousand local dairy farmers.
One major concern of investors, according to Franky, is the need for government regulations to encourage investors to purchase raw milk from the local dairy farmers so that the processing milk investment will have a positive impact on the welfare of local dairy farmers.
Dairy processing industry is included in the import-substitution industries, which are prioritized by BKPM. Currently, BKPM sets investment priority sectors on areas of infrastructure, labor-intensive industries, agriculture, industrial import substitution, export processing industry, maritime, tourism and downstream mining and industrial areas.
The new factory output, he said, could reduce import by up to US$37.2 million for 10 years and increase exports by up to US$615 million over 10 years. (*)