Indonesia is yet to achieve self-sufficiency in the milk industry. The Indonesian Agriculture Ministry said that the country is for 60 percent dependent on milk imports (particularly from Australia and New Zealand) to meet domestic demand. Currently, domestic milk demand in Indonesia stands at 3 million tons per year. However, only 1.2 million tons can be produced domestically. In the future the situation can worsen as domestic milk consumption grows 7 percent per year, whereas domestic milk production grows by 3.3 percent per year only.
In the past decade, demand for dairy products in Indonesia has increased more than 10 percent on an annual basis. Amid an expanding middle class segment, consumer habits change resulting in more Indonesians consuming dairy products on a daily basis.
Moreover, Indonesia is characterized by low per capita milk consumption (about 11.7 liters per year in 2013) and therefore the milk industry has ample room for growth in Southeast Asia's largest economy. Another characteristic of Indonesia is that more than 90 percent of the dairy market is dominated by processed milk (UHT milk, condensed milk).