Dairy diversification opportunities in SE Asia

Growing consumer demand in South East Asia offers plenty of opportunity for the New Zealand dairy industry to increase its exports of consumer-ready products into the region, a new report shows.

Economic Development Minister Steven Joyce and Primary Industries Minister Nathan Guy today released Opportunities for New Zealand Dairy Products in South East Asia, which assesses possible “build”, “buy” and “niche” strategies across seven dairy consumer product categories in six South East Asian countries.

New Zealand is this year commemorating 40 years of ties with the Association of South East Asian Nations (ASEAN), and ASEAN is New Zealand’s fourth largest trading partner, Mr Joyce says.

“In the past five years, New Zealand’s trade with ASEAN has grown at a rate second only to China. New Zealand is the largest supplier of milk powder to South East Asia and boasts a strong import share across most major dairy products.”

New Zealand has free trade agreements with ASEAN as a group and with Singapore, Thailand and Malaysia separately.  A key initiative of the upcoming Business Growth Agenda update is to improve our engagement as a country within the ASEAN region, Mr Joyce says.

“This report is designed to raise the profile of the ASEAN opportunity, and help stimulate further interest in the region from exporters and investors.”

There has been significant recent investment by dairy companies in the manufacture of products such as infant formula and UHT milk, Mr Guy says.

“We are also seeing the emergence of a number of niche players with a focus on the premium end of the market.

“Consumer dairy markets in South East Asia are highly competitive in what is a US$16.8 billion industry and the region, with its population of 583 million, is an attractive market for Kiwi consumer-ready dairy exporters who are looking for opportunities to diversify.”

Under the Business Growth Agenda, the Government has made major investments to encourage innovation, productivity and diversification in New Zealand’s food and beverage industry, for example through the Food Innovation Network.

The Opportunities for New Zealand Dairy Products in South East Asia report builds on existing initiatives to grow and build value in this sector. It complements the Ministry of Business, Innovation and Employment’s 2014 report What does Asia want for dinner? (available at www.foodandbeverage.govt.nz), the New Zealand Sectors Report Series, and is the latest in MBIE’s Food and Beverage Information Project series.

It was commissioned from Coriolis Research and is available at: www.foodandbeverage.govt.nz