Al-Ain Farms, a leading dairy producer based in the United Arab Emirates, is poised to invest in Indonesia as the country aims to reduce its dependence on milk imports. According to the Indonesian Ministry of Agriculture, a memorandum of understanding has been signed with the company, which is recognized for operating one of the most advanced dairy farms in the Middle East. The agreement was one of the key outcomes of the Indonesian President’s recent bilateral meeting with UAE President Mohamed bin Zayed Al Nahyan in Abu Dhabi. The government has not disclosed the investment’s financial details.
A senior official from Indonesia’s Ministry of Agriculture stated that the investment by Al-Ain Farms will focus on enhancing both the volume and quality of domestic milk production. In support of this initiative, the Indonesian government has pledged various incentives, including exemptions from import duties on livestock and industrial equipment, access to low-interest financing schemes, and participation in livestock insurance programs.
The senior official added that the Emirati investor plans to establish dairy cattle farms in locations included in Indonesia’s national strategic projects for 2025-2029. Recently, the Indonesian President unveiled a list of 77 key initiatives, including an ambitious school-feeding program, that the government will prioritize in the coming years. While the senior official did not disclose the specific province where Al-Ain Farms would set up its dairy operations, the school-feeding program is set to benefit the entire country.
Indonesia has launched a nationwide program to provide nutritious meals to students every school day, a key initiative from the President’s election campaign. Each meal typically includes milk to support children’s calcium intake. Currently, the country imports around 80% of its milk, facing a deficit of 4.9 million tons. The free meal program’s introduction has driven national demand for fresh milk by an additional 3.6 million tons. In response to this rising demand, Indonesia aims to achieve full self-sufficiency in milk production by 2029.
Al-Ain Farms, established by the father of the UAE’s current president and the nation’s founding leader, is one of several foreign entities eyeing Indonesia’s dairy sector. In addition to Al-Ain Farms, Vietnam’s TH Group is reportedly nearing an investment in a similar initiative. Indonesia’s Agriculture Minister met with the group’s chairwoman in February, offering comparable incentives and identifying suitable areas for large-scale dairy operations in Central Kalimantan and South and Central Sulawesi.
Indonesia plans to import 200,000 high-quality foreign dairy cows for breeding in 2024 as part of its broader strategy to strengthen the dairy industry. By attracting foreign investment, the country aims to enhance the quality and volume of fresh milk production without increasing the fiscal burden. In 2024 alone, Indonesia recorded USD 32.7 million in foreign direct investment inflows from the United Arab Emirates.
(Source: Jakarta Globe)
