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Westland signs with health and nutrition giant Kalbe

Westland signs with South East Asia’s largest-listed consumer health and nutrition firm.

Building on its growing market presence in China, New Zealand’s second biggest dairy co-operative, Westland Milk Products, signalled an increased presence in South East Asia by signing a Memorandum of Understanding with Indonesian consumer health and nutrition giant Kalbe (PT Sanghiang Perkasa).

Today’s signing, in the presence of visiting Indonesian President Joko Widodo at a business forum held in Wellington, is the first step toward forming a strategic partnership between Westland and Kalbe.

Westland Chief Executive Toni Brendish said that this was a significant opportunity for Westland to work with a South East Asian market leader in infant nutrition and dairy products and that 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, Ms Brendish said.

Kalbe also has a joint venture with Morinaga Japan for the production of infant formula in Indonesia. This gives them around a 13% share of the current domestic powdered milk market in Japan under both 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.

“This is an effective and prudent growth strategy for Westland which we fully expect to lead to financial benefits for the company – welcome news for Westland’s shareholders.

“Kalbe and Morinaga senior executives visited Hokitika and Rolleston operations earlier this year and were impressed with Westland’s strategy and capabilities and we hope to eventually become a Kalbe preferred supplier for a number of nutritional and consumer products,” said Ms Brendish.

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 increasingly move into the South East Asian region and not relying wholly on its growing market in China.

Today’s announcement follows news that Southern Pastures LP – New Zealand’s largest dairy farmland fund – is to become a shareholder of Westland Milk Products, bringing four million kilograms of milk solids to Westland’s milk collection annually.

Westland and Southern Pastures are investigating the formation of a joint venture to produce and market free-range, grass-fed milk for a growing global demand, especially in North America.

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