MARKET DEVELOPMENT
Indofood Eyes Emerging Markets to Boost Growth
Indofood Eyes Emerging Markets to Boost Growth
01/06/2013 (Jakarta Post) - Instant noodle producer PT Indofood Sukses Makmur (INDF) aims to grow by at least 10 percent this year and is looking at emerging markets to boost growth.
Its current annual production capacity of 15 billion packs is enough to feed the world population
twice over.
“We expect to grow in the lower double-digit range,” Thomas Tjhie, the finance director at the
company, said.
To attain growth targets, the company has set aside Rp 7 trillion (US$ 714 million) for their capital expenses this year, 13 percent of which has been used in the first quarter, company executives added.
Paulus Moleonoto, a director at the company, added Indofood would distribute the capital expenditure budget to their various business units.
“Our agribusiness unit will receive 40 percent of our capital expenditure,” he said.
He added Indofood’s agribusiness unit would receive a larger cut because the company plans to plant more oil palm trees in their plantations, a project that would cost around Rp 1.2 trillion.
The company has roughly 300,000 hectares of planted oil palm plantations.
Paulus further said the company needed another Rp 350 billion to construct two additional palm oil processing factories, capable of processing 45 tons and 80 tons of palm oil per hour respectively.
“We will complete the construction of these two factories next year,” he said, adding that the factories would be located in South Sumatra and East Kalimantan.
Indofood currently runs 21 palm oil factories with a total capacity of 900 tons per hour.
However, Indofood’s profits slid 11.4 percent from the same period last year to Rp 722.3 billion in the first quarter of 2013, partly due to the fall in crude palm oil prices.
Besides the agribusiness unit, Bogasari, the company’s flour manufacturing division, and Indofood CBP, their consumer food unit, would each receive a Rp 2 trillion cut from the capital expenditure budget, Paulus said.
“The remaining budget would go into our distribution networks,” he said.
Company executives added that the company would pursue growth by entering new markets demographically similar to Indonesia.
Anthoni Salim, the president director, said their products suited emerging markets well.
“Hence, we eye not only the Indonesian market, but also the Southeast Asian market because of the large concentration of population, marked by a rising middle-class, in the region,” he said.
He added that the company sought to form more joint ventures with foreign partners to gain knowledge of best practices in the industry.
Indofood has previously acquired a 14.56 percent stake in Minzhong Food Corporation (CMFC) Ltd., a Chinese vegetable processing company. Indofood’s subsidiary, Indofood Agri Resources Ltd., has also secured a 50 percent stake in Companhia Mineira de Acucar e Alcool Participacoes (CMAA), a Brazilian company that cultivates and processes sugarcane.
Its current annual production capacity of 15 billion packs is enough to feed the world population
twice over.
“We expect to grow in the lower double-digit range,” Thomas Tjhie, the finance director at the
company, said.
To attain growth targets, the company has set aside Rp 7 trillion (US$ 714 million) for their capital expenses this year, 13 percent of which has been used in the first quarter, company executives added.
Paulus Moleonoto, a director at the company, added Indofood would distribute the capital expenditure budget to their various business units.
“Our agribusiness unit will receive 40 percent of our capital expenditure,” he said.
He added Indofood’s agribusiness unit would receive a larger cut because the company plans to plant more oil palm trees in their plantations, a project that would cost around Rp 1.2 trillion.
The company has roughly 300,000 hectares of planted oil palm plantations.
Paulus further said the company needed another Rp 350 billion to construct two additional palm oil processing factories, capable of processing 45 tons and 80 tons of palm oil per hour respectively.
“We will complete the construction of these two factories next year,” he said, adding that the factories would be located in South Sumatra and East Kalimantan.
Indofood currently runs 21 palm oil factories with a total capacity of 900 tons per hour.
However, Indofood’s profits slid 11.4 percent from the same period last year to Rp 722.3 billion in the first quarter of 2013, partly due to the fall in crude palm oil prices.
Besides the agribusiness unit, Bogasari, the company’s flour manufacturing division, and Indofood CBP, their consumer food unit, would each receive a Rp 2 trillion cut from the capital expenditure budget, Paulus said.
“The remaining budget would go into our distribution networks,” he said.
Company executives added that the company would pursue growth by entering new markets demographically similar to Indonesia.
Anthoni Salim, the president director, said their products suited emerging markets well.
“Hence, we eye not only the Indonesian market, but also the Southeast Asian market because of the large concentration of population, marked by a rising middle-class, in the region,” he said.
He added that the company sought to form more joint ventures with foreign partners to gain knowledge of best practices in the industry.
Indofood has previously acquired a 14.56 percent stake in Minzhong Food Corporation (CMFC) Ltd., a Chinese vegetable processing company. Indofood’s subsidiary, Indofood Agri Resources Ltd., has also secured a 50 percent stake in Companhia Mineira de Acucar e Alcool Participacoes (CMAA), a Brazilian company that cultivates and processes sugarcane.