The Ministry of Industry (Kemenperin) is committed to maintaining the availability of raw materials for the dairy processing industry to ensure productivity and meet both domestic and export market demands. The rise in new investments in the dairy processing sector, particularly from liquid milk producers, has increased the demand for fresh milk sourced domestically. "There has been a shift in market demand from powdered milk and sweetened condensed milk to liquid milk (UHT and pasteurized) in recent years," stated Director General of Agro Industry at Kemenperin, Putu Juli Ardika. Currently, liquid milk and cream production dominates the dairy processing industry at 49%, followed by sweetened condensed milk at 17% and powdered milk at 17.5%. The sector has successfully exported products such as infant formula, baby food, ice cream, cheese, yogurt, powdered milk, sweetened condensed milk, and liquid milk and cream. By 2023, the sector had attracted investments totaling IDR 23.4 trillion, employing 37,000 workers, with 88 processing plants producing 4.64 million tons annually, significantly contributing to the national economy.

In Q1 2024, the food and beverage industry expanded by 5.87%, contributing 51.54% to the non-oil and gas processing industry GDP and 9% to the national GDP. With rising per capita income and a growing middle class, the demand for processed dairy products is expected to increase. However, only about 20% of raw milk is sourced domestically, due to the slow growth rate of fresh milk production (1%) compared to the industry's demand growth (5.3%). Challenges include the low number of dairy cows, low productivity, high feed costs, limited land, and low interest among the youth in dairy farming. Addressing these issues requires government support, including providing cooling units, establishing Milk Collection Points, and digitalizing milk reception points. Success in developing domestic fresh milk production necessitates collaboration between the government, dairy processors, cooperatives, and farmers, focusing on increasing dairy cow populations, improving facilities, and training farmers in Good Agricultural Practices to enhance productivity.

Source: https://amp.kontan.co.id/news/kemenperin-terus-pacu-pengembangan-industri-pengolahan-susu