Mengniu Dairy, based in the Inner Mongolia autonomous region, a traditional dairy production hub in China, has unveiled a new chapter in sharing expertise and scaling up best practices in internationalization of the Chinese dairy industry under the Belt and Road Initiative.

Standing at the 10th anniversary of the BRI, Mengniu is accelerating its internationalization strategy by providing nourishment to every person.

Overseas development

Mengniu embarked on a journey in 2013 to seek high-quality international sources of milk.

After more than five months of on-site research, Mengniu chose the Waikato region in New Zealand to establish a factory.

New Zealand is a country that highly values environmental protection. The discharge of wastewater, steam, emissions from chimneys, traffic and chemical pollutants all undergo rigorous assessment procedures.

To express its sincerity toward harmonious coexistence, Mengniu started to address key issues such as ecological protection, road closures and noise. It complied with the strict environmental audits of factory facilities, observed green regulations and protected the environment.

In September 2013, the Yashili factory obtained permits and started operation. Mengniu's sincerity opened the doors to its first international milestone.

Mengniu's first dairy production base in Southeast Asia opened on Nov 29, 2018. The Indonesian factory is the only milk manufacturer with a refrigeration unit and integrated container production system which can produce refrigerated transportation vehicles suitable for medium to low temperatures with heating capabilities.

Utilizing technological advantages, Mengniu launched its first TV commercial overseas in Indonesia and brought high-quality products to local consumers.

Mengniu introduced the globally recognized FSSC 22000 food safety management system and collaborated with certification authorities to ensure that its product quality management system aligns with international standards.

It also obtained certifications on environmental management systems and health management systems, and collaborated with Indonesian regulatory bodies, including food and drug authority BPOM; BSN, an Indonesian standardization agency; the Ministry of Agriculture; and the Ministry of Religious Affairs, ensuring compliance with local regulations and quality standards.

Mengniu's first international brand, Yoyic stepped out of China in 2018, rooted itself in Indonesia and has become a household name for probiotic beverages.

Practical cooperation

Mengniu is revving up efforts to innovate its products and build a solid foundation for sustainable development through localization.

In just five years, the company's Indonesian factory has set a good example of collaborative governance.

Indonesia is located in the tropical area, with temperatures exceeding 30 C all year round. Traditional low-temperature probiotic beverage products have a short shelf life, which limits their market potential.

In the face of this challenge, Mengniu upgraded the product formulas and quality while extending the shelf life to three months. This allowed low-temperature, long-shelf-life yogurt products to enter the traditional market and improved their market competitiveness.

At the same time, Mengniu's Indonesian factory strengthened training to enhance the quality of employees and shared development for overseas business. With 73 percent of the workforce being local, the Indonesian factory is expected to provide 1,000 job opportunities to locals in the next five years, injecting vitality into the local consumer market.

To address the challenge of talent shortages, the Indonesian factory established the Yoyic Indonesia Training Academy in 2019, which helps a large number of local dairy industrial workers and specialists to develop. By offering courses in food production technology, relevant laws and regulations, Mandarin and Indonesian languages and cultures, it helps to enhance mutual understanding and exchanges between Chinese and foreign employees, and boosts team cooperation and management efficiency.

Mengniu's Indonesian factory also collaborates with local suppliers. After more than 40 tests, the supplier pass rate surged from 40 percent to more than 90 percent, comprehensively improving the capability of Indonesian suppliers and assisting in the construction of a high-quality and comprehensive supply system in the local area.

Mengniu values social responsibility and strives to strengthen international communication.

In New Zealand, Mengniu's subsidiary, Yashili, sponsors the construction of schools, libraries and medical centers in local towns, and organizes fundraising events to help charities support children with congenital heart disease.

Brand image

Beyond poverty alleviation, the New Zealand factory also focuses on the daily nutrition and health of residents. It sponsors and supports a youth soccer team from Wellington, New Zealand, to compete in China's campus soccer competitions. Through sports exchange between the two countries, they help children realize their dreams.

During this year's Ramadan in Indonesia, Mengniu held a large-scale public welfare event. In the factory, it respected the religious beliefs and customs of local employees by setting up dedicated prayer rooms and halal canteens.

In addition, Mengniu cooperates with local governments to carry out consumer vitalization programs, provide industrial site visits and study tours, and donate to local institutions such as flood-affected or earthquake-hit areas, schools, hospitals and welfare homes.

As an Australian organic infant and toddler food brand, Mengniu's subsidiary, Bellamy's, continues to lead a green, organic and sustainable lifestyle. It initiated the Blue Planet public welfare project with the China Environmental Protection Foundation, promoting biodiversity conservation in China and Australia.

As early as 2017, Mengniu proposed the concept of a "global dairy community" to share the development dividends of the global dairy industrial chain and work with global partners to solve hunger problems.

Win-win solution

In Indonesia, Mengniu contributed a tax payment of 2.29 million yuan ($315,000) in 2019; mapped out a full industry chain from overseas milk source and processing to overseas sales; aided local suppliers in clean production and increased job opportunities. All these efforts have injected momentum into local economic development.

At present, Mengniu has achieved more than 2 billion yuan in revenue and is the No 1 ice cream brand in the Indonesian market and No 2 in the Philippines. Its business covers countries such as Indonesia, the Philippines, Vietnam, Cambodia, Laos and East Timor.

Mengniu has also built three automated intelligent factories in Indonesia with a designed annual capacity of 250,000 metric tons and an output value of 2.5 billion yuan.

In the process of internationalization, Mengniu attaches great importance to participating in dairy industry governance and contributing Chinese wisdom to the global dairy industry.

Lu Minfang, president of Mengniu, has been elected as the first Chinese director in the history of the Global Dairy Platform and the International Dairy Federation. He has also hosted the Global Dairy Forum at the China International Import Expo in Shanghai for three consecutive years.

Mengniu has integrated global dairy resources from Europe, Oceania, South America and other regions; established the Mengniu Nutrition Institute and three overseas research and development centers; and connected all aspects of the dairy industrial value chain, from source to R&D, from production to sales. Through coexistence, co-governance, sharing and win-win cooperation, Mengniu expands its international business, deepens cooperation and promotes inclusive development in the global dairy industry landscape.