The signing took place during the visit of Indonesian President Joko Widodo at a business forum in Wellington.
Japanese opportunities
Westland chief executive Toni Brendish said this was a significant opportunity for Westland to work with a South East Asian market leader in infant nutrition and dairy products. She added the MoU will lead to a strategic relationship with Kalbe, allowing Westland to grow in ways it could not do with its own resources.
“Kalbe is a highly sought-after customer, with huge market penetration and networks in an increasingly important region,” Brendish said.
Kalbe also has a JV (joint venture) with Morinaga Japan for the production of infant formula in Indonesia. This gives Kalbe an approximately 13% share of the current powdered milk market in Japan under both the Kalbe and Morinaga brands, presenting additional opportunities for Westland in the Japanese market.
“These strategic relationships with other companies enable Westland to get access into key markets through advanced existing networks,” Brendish added.
She noted Kalbe and Morinaga senior executives visited Westland’s Hokitika and Rolleston operations earlier this year.
Kalbe, formed in 1966, is the largest publicly-listed pharmaceuticals company in South East Asia.
The company’s business includes prescription pharmaceuticals (23%), consumer health (17%), nutritionals (30%) and distribution and logistics (30%). The Indonesian domestic market accounts for 94% of Kalbe business.
Southern Pastures look to JV
New Zealand Trade and Enterprise helped introduce the two companies more than a year ago, resulting in the MoU.
It also supports Westland’s strategy to move into the South East Asian region and not rely wholly on its growing market in China.
The announcement follows news that Southern Pastures LP – New Zealand’s largest dairy farmland fund – is to become a shareholder of Westland Milk Products, bringing 4m kilograms of milk solids to Westland’s milk collection annually.
Westland and Southern Pastures are also investigating the formation of a JV to produce and market free-range, grass-fed milk, especially in North America.