Mengniu leverages ESG's "Four Capabilities" experience to empower the sustainable development of the dairy industry in Southeast Asia

Recently, the “International Strategic Conference on the Transformation of Sustainable Livestock Production,” jointly hosted by the Food and Agriculture Organization of the United Nations (FAO), the International Dairy Federation (IDF), and Indonesia’s National Research and Innovation Agency (BRIN), was held in Jakarta. Focusing on global pathways for the sustainable development of the livestock sector, the conference brought together representatives from governments, international organizations, research institutions, and industry-leading companies from around the world to jointly explore how technological innovation and multi-party collaboration can drive the green transformation of the dairy industry.

(Li Pengcheng shares during the “Industry Leaders Dialogue”)

Li Pengcheng, Senior Executive President of Mengniu Group and Chairman of the Mengniu Charitable Foundation, was invited to attend and delivered remarks in the “Industry Leaders Dialogue” session, sharing Mengniu’s practical experience in the field of sustainable development. He also offered “Mengniu experience” that can be referenced for the development of dairy in Indonesia and even across Southeast Asia.

** “Four-Sets” experience, making sustainable development a growth engine for the region**

Indonesia is the world’s largest producer of palm oil and the largest economy in Southeast Asia. Consumption of dairy products is growing rapidly, but domestic production can only meet about 40% of demand, leaving a significant supply-demand gap. Against this backdrop, FAO, IDF, and BRIN jointly organized this conference, aiming to build a government-enterprise-academia-research dialogue platform and promote a transformation of the livestock sector in Indonesia and the region toward being efficient, low-carbon, and inclusive.

(Indonesia’s National Research and Innovation Agency presents commemorative certificate and badge)

During the “Industry Leaders Dialogue” session, Li Pengcheng pointed out that Mengniu has been deeply engaged in China for many years and has formed a set of sustainable development solutions covering the entire industrial chain. He shared in depth using four key words: “accountable, traceable, transformable, and financeable”:

First, accountable—laying the data foundation for carbon management.

In 2025, Mengniu completed carbon footprint assessments for all its cooperative farms, establishing a Scope 3 carbon emission model, and for the first time disclosed emissions data across the entire value chain. On this basis, Mengniu supported raw milk suppliers in adopting technologies such as low-methane-emission dairy cows, the resource utilization of manure and waste, and optimization of feed additives, thereby driving large-scale emissions-reduction innovation. Li Pengcheng emphasized that Indonesia’s dairy industry is mainly based on smallholder farmers, with a relatively smaller number of dairy cows, but it can still benefit from the pathway of “assess first, account second, then reduce emissions”—to get a clear picture of household carbon emissions and find the low-carbon transformation approach most suitable to local conditions.

Second, traceable—building a responsible supply chain.

Indonesia is the world’s largest palm oil producer, and supply-chain transparency directly affects international market trust. Mengniu has already built a responsible management system covering key raw materials such as palm oil, soybeans, and timber, and has committed to eliminating deforestation risks in the supply chain by 2030. In 2025, Mengniu promoted “zero-deforestation” procurement of soybean meal, with its share exceeding 50%, and ensured that 100% of palm oil is traceable to refineries and palm oil mills. Li Pengcheng said that promoting green development across the entire industrial chain starting from the procurement source can help Indonesia’s local livestock industry improve supply-chain resilience, reduce environmental footprint, and enhance international competitiveness.

Third, transformable—turning ecological value into product value.

Green consumption has become a global mainstream trend, and consumers are increasingly willing to pay for products that have stories and a sense of warmth. In Ulaanbator? (Note: keep original text meaning) In China’s eighth-largest desert, Ulanbuhe—Mengniu organically combined ecological restoration with industrial development. It built an organic dairy product industry chain covering organic planting, organic breeding, and organic processing, and Tersun’s “Desert Organic” product series has become a benchmark for ESG-enabled product innovation. Li Pengcheng said that Indonesia has abundant tropical agricultural resources. How to turn “green” into “a premium” and make sustainability part of the brand story is a pathway worth exploring.

Fourth, financeable—using ESG governance to unlock green finance.

Sustainable development requires investment, and capital markets are increasingly providing lower-cost financing support to companies with excellent ESG performance. In 2025, Mengniu successfully issued CNY 3.5 billion in sustainable development bonds, setting the record for the lowest interest rate and the largest issuance scale for offshore Renminbi bonds in China’s food and beverage sector. Li Pengcheng said that if local Indonesian companies can establish a quantifiable ESG system, they can also gain more support in international capital markets, helping transform sustainability from cost-driven inputs into value creation.

** Deepening localized exploration and deepening deployment in Indonesia**

As one of the global top ten dairy companies, Mengniu not only holds a leading position in China’s ESG field, but also has deep business deployments in Indonesia—its controlled subsidiary Modern Dairy continues to deepen cooperation with local Indonesian enterprises.

(Svisit of Djarum Group to Modern Dairy—

In December 2025, the SAVORIA, a core consumer-products segment under Indonesia’s Djarum Group, visited Modern Dairy. Djarum Group is a highly influential commercial conglomerate in Indonesia. SAVORIA’s dairy brand “Milk Life” adheres to a high-quality and localization strategy, and is an important fresh-milk supplier in Indonesia’s Starbucks market.

During its visit to China, the SAVORIA team toured Modern Dairy’s Asian largest single-farm unit located in Bengbu (nearly 40k head of livestock) and a low-carbon demonstration farm in Shanghe. The Shanghe farm has built a circular industrial chain of “forage planting—dairy cow breeding—manure and waste treatment—biogas power generation—biogas fertilizer returning to the fields,” and was among the first to introduce GreenFeed methane monitoring technology, becoming a green benchmark in the industry. The two sides exchanged in depth around farm operations and management, consultations for new project construction, dairy product R&D, and channel coordination, jointly advancing strategic cooperation.

SAVORIA’s Chief Executive Officer, Ihsan Muliya Putri, said that Modern Dairy’s solid strengths in large-scale breeding, digital management, and cost control provide an intuitive and feasible example for Indonesia to break through bottlenecks in farm milk yield per unit area, cope with the humid and hot climate, and optimize its operating system.

Currently, Modern Dairy has formed a deep deployment in Indonesia covering three major segments: farm management outsourcing, construction and operations, and forage trading. In addition to managing a farm with 3,000 dairy cows, it also created Indonesia’s highest per-unit-area milk yield record of 41 kilograms within half a year. Recently, it also signed a new project for consultation and services for the construction and operation of a new farm with 28k dairy cows.

Li Pengcheng pointed out that Mengniu and its subsidiaries’ years of deployment in Indonesia and localized exploration have enabled them to gain a deeper understanding of the development stage, resource endowments, and real challenges of Indonesia’s livestock industry, and they are therefore better positioned to combine Mengniu experience with local realities to provide valuable references for Indonesia’s dairy industry.

** Deepening international cooperation to advance implementation of the declaration**

During the conference, all participating parties held in-depth discussions around the “Paris Declaration on Dairy Sustainability.” The declaration was jointly signed in 2024 by the United Nations Food and Agriculture Organization and the International Dairy Federation. It aims to convey the dairy industry’s firm global commitment to sustainability and calls on all parties to take concrete action, jointly promoting coordinated progress of the dairy industry across three dimensions: economic, social, and environmental.

(Li Pengcheng exchanges with IDF Global Director General Laurence Rycken during the conference)

As an important implementation practice following the signing of the declaration, this conference specifically set up a declaration interpretation session. Participating representatives generally agreed that the significance of the declaration lies not only in establishing goals, but more importantly in turning commitments into actionable and measurable pathways.

As China’s dairy representative, Mengniu actively participates in international exchanges and cooperation under the declaration framework. It not only demonstrates to the international community China’s systematic practices in sustainable development in the dairy sector, but also—through in-depth exchanges with international organizations such as FAO and IDF—further strengthens its participation and influence in the global dairy industry’s sustainability agenda.

With the global sustainable development agenda advancing further, the dairy industry—as an important sector related to nutrition and health and the food supply—bears significant responsibilities in addressing climate change, protecting the ecological environment, and improving resource utilization efficiency. Next, Mengniu will continue to uphold its mission of “safeguarding the shared health of people and the planet,” working with partners worldwide to jointly drive the dairy industry toward a greener, more inclusive, and more sustainable future.

(Editor: Wang Lei)

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