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Martina Berto to capitalize on weak rupiah by boosting exports
Publicly listed cosmetics maker PT Martina Berto, part of Martha Tilaar Group sees the current weak rupiah as an opportunity to boost exports by 50 percent this year
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ublicly listed cosmetics maker PT Martina Berto, part of Martha Tilaar Group sees the current weak rupiah as an opportunity to boost exports by 50 percent this year.
'By exporting amid the rupiah depreciation, we can earn more revenue,' marketing director Samuel Eduard Pranata said after a shareholders' meeting in Jakarta Tuesday.
The firm is currently looking for market opportunities in Middle Eastern countries, including Saudi Arabia and Jordan, through hijab series hair care products under its Sariayu brand as the region has a high demand for Muslim cosmetics.
Martina Berto also wants to enter China's market through the company's spa products under premium brand Body Sri Spa, according to Samuel.
'Every country has different cosmetic needs. We have to know their demands first,' Samuel said.
Samuel said the firm already had export markets, with Malaysia and Brunei Darussalam topping its export destinations, with demand especially strong for make-up products.
Other countries include Singapore, in which the firm operates its subsidiary Eastern Beautypelago Pte. Ltd., the Philippines and Taiwan.
During the first three months of this year, Martina Berto saw a 25 percent increase in net sales to Rp 175 billion (US$13 million), mostly resulting from cosmetics and body care products at 60 percent. Net profits grew only 4 percent toRp 2.6 billion due to the increase in production costs.
Exports accounted for just 2 percent of the firm's revenue during the first quarter at Rp 2 billion, growing by 10 percent year-on-year (yoy). With the new target to boost exports, they are expected to contribute up to 5 percent.
The rupiah has fallen 7 percent against the US dollar this year, and the weaker rupiah will make Indonesian products cheaper overseas.
This year, the firm targets Rp 770 billion in net sales, 15 percent higher than last year, supported by an increase in production capacity as its new factory in Cikarang, Bekasi, which cost Rp 75 billion to build, will start operating later this month.
'With a total capacity of 1,800 tons of cosmetics per year, the new factory can contribute 5 percent of total net sales,' production director Kunto Widarto said, adding that the factory will give the firm a total of 11,373 tons of cosmetics products per year.
As competition in the country's cosmetics industry is getting tight, Martina Berto will only focus on certain brands that are in high demand and certain market areas, according to the firm's president director Bryan David Emil Tilaar.
'Skin and hair care products are currently in high demand, so we will boost the production. We will also distribute certain brands to certain areas. For example, as Mirabella is in high demand in eastern Indonesia, we will supply more to that area,' Bryan said.
The cosmetics maker, which captures 20 percent of the local market share, has allocated Rp 22 billion in capital expenditure (capex) for this year sourced from internal cash, according to finance director Handiwidjaja.
The capex will be used to modernize production machines, to renovate warehouses and factories, to purchase cars in support of distribution, as well as to add two to three more outlets worth Rp 500 million each.
Martina Berto, listed on the Indonesia Stock Exchange (IDX) under code MBTO, manufactures cosmetics, skin and body care products, hair products and herbal products, and currently competes with publicly listed Mustika Ratu.
It is 66.82 percent owned by PT Marthana Megahayu Inti, 0.48 percent by PT Beringin Wulanki Ayu, 0.45 percent by PT Marthana Megahayu and the public owns the rest.
The stocks traded at Rp 149 apiece on Tuesday, having slumped 25.5 percent so far this year, underperforming the broader benchmark Jakarta Composite Index's (JCI) 6.8 percent drop. (foy)
