N

ational consumer goods giant PT Unilever Indonesia (UNVR) says its net sales were up 16.3 percent year-on-year in 2012, below the 19.2 percent annual rise booked in 2011, on tough competition.

According to Unilever’s 2012 annual report, the firm’s net sales were Rp 27.3 trillion (US$2.8 billion) in 2012, up from Rp 23.4 trillion in 2011. Yet, between the year 2010 and 2011, net sales grew by a steeper 19.2 percent, given that the company earned Rp 19.7 trillion all through 2010.

Overall, the 2012 report still showed a top-line and bottom-line scaling up of business for Unilever, a top-10 company in terms of market capitalization, valued at Rp 170.1 trillion.

Gross profits booked a 15.6 percent year-on-year rise to Rp 13.8 trillion for 2012, while operating profits were up 16.7 percent to Rp 6.5 trillion.

Profits before income tax moved up by 16 percent to Rp 6.4 trillion while profits for the year rose 16.2 percent to Rp 4.8 trillion.

This stands in contrast to the period between 2010 and 2011, when profits soared 23 percent to Rp 4.1 trillion at the close of 2011.

Sancoyo Antarikso, the spokesperson for Unilever, said that growth in 2012 “was driven by volume”.

Unilever runs two business divisions, home and personal care and food and ice-cream.

The firm oversees 14 categories of consumer goods and 45 brands, including Pepsodent, Rinso, Blue Band and Magnum ice-cream.

Sancoyo added that the company’s strategy would remain “focused on innovations” for 2013. “We will continue to provide products that meet the needs of our consumers, who have become more sophisticated.”

Last year, Unilever introduced TRESemmé, a brand of hair care product, to the Indonesian market.

However, Mardesiana, an analyst at Danareksa Sekuritas, noted that strong competition affected how fast Unilever grew last year.

“Fourth quarter revenue has slightly declined to Rp 6.96 trillion from Rp 6.98 trillion in the third quarter amid stiffer competition,” she said.

Yet, Danareksa noted that the company’s wide portfolio has buffered its growth.

“Revenue from home and personal care is up by nearly 16 percent year-on-year to just below Rp 20 trillion, whereas revenue from food and beverage grew stronger at about 17.6 percent year-on-year to Rp 7.4 trillion,” Danareksa said.

The analyst added that the figures showed that contributions from food and beverages were “getting slower”, while contributions from home and personal care grew, “suggesting strong support” from this portfolio.

Danareksa said that the company’s margins would remain stable this year. “There is also the possibility that its volume of production will rise, following capacity upgrades at their manufacturing plants.

The company has allotted more than Rp 1 trillion to establish a factory in the Sei Mangkei industrial area in North Sumatra.

However, Danareksa noted that the company should remain prudent in its pricing strategy this year to stay ahead of competition.

“They have to adjust the prices of their products to the competition, refraining from raising prices of products in highly competitive categories,” she said.

The Anglo-Dutch company once said that 60 percent of their products were priced below 60 euro cents.

Unilever’s share prices closed at Rp 22,450 apiece, registering no change compared to the opening of the trading day.