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ewcomer flour producer Bungasari Flour Mills Indonesia plans to strengthen its grip on the domestic market by introducing more products while expanding its business nationwide, paving the way for greater industry competition.

Bungasari, a joint venture between FKS Capital, Malayan Flour Mills and Toyota Tsusho Corporation, started operations in August 2014 and has so far managed to boost its factory utilization rate to 90 percent. Currently, it has a total production capacity of 1,500 tons of wheat flour per day.

Bungasari president director Grant Lutz said the company had reached a new high by selling 46,000 tons of flour and bran in June, a 9.5 percent increase from 42,000 tons in the previous month. He said the record had been triggered by high demand during the fasting month.

Last year, the company booked a sales volume of 460,000 tons of flour and bran and US$126 million of sales revenue. It claims its market share reached 6.4 percent during the first quarter of this year, as opposed to 4 percent throughout 2015.

“To compete with major competitors, our main strategy is consistent quality. We have a very wide range of products. So we’re trying to produce a wide variety of flours of different quality [for various] applications. Hence, we can meet every need in the market,” Lutz said at the company’s production facility in Cilegon, Banten, on Thursday.

Currently, the company has at least 10 variants of wheat flour, including Golden Eagle for bread and noodles, Bola Salju for cake and choux pastry, Hana Kuning for biscuits and cakes and Jawara for snacks and fried foods.

“In the past, customers were forced to accept one or two qualities of flour that could fit all kind of applications, but you couldn’t get the best quality by doing that,” Lutz said.

Hence, Bungasari has begun to diversify its products to compete with major players in the industry.

Bungasari head miller Piterson Rumapea said each of the company’s products had a specific competitor in the market, all of which are products of Bogasari, the food giant owned by the Salim Group.

“Golden Eagle, for instance, is going head-to-head with Bogasari’s Cakra Kembar, Bola Salju with Segitiga Biru, Jawara with Lencana Merah and Hana Kuning with Kunci Biru,” he said.

Piterson added that Bungasari’s total daily production capacity was still far below that of Bogasari, which can produce 10,500 tons of wheat flour per day. However, with expansion plans in years to come, he believed the company could become a major competitor for Bogasari.

Bungasari plans to double its production capacity to 3,000 tons per day by constructing a new production facility in the first half of 2017. The new factory is expected to be completed within 18 months.

The company currently has 74 local distributors and 81 direct corporate customers, mostly from Java and Sumatra. Moreover, it plans to expand its business by distributing flour to eastern parts of the country, including Papua and Maluku.

The company also exports its products to China, the Philippines, Thailand, the Maldives and Hong Kong. Bungasari sales and marketing director Budianto Wijaya expected the company to ship 4,000 to 5,000 tons of flour products overseas each month this year.

According to the Industry Ministry, there are currently 31 flour factories in Indonesia, with a combined annual production capacity of up to 11.2 million tons per year. In comparison, the country produced 5.58 million tons of wheat flour in 2015.

Industry Minister Saleh Husin said the food and beverage industry had contributed Rp 136.57 trillion ($10.4 billion), 31.4 percent of the gross domestic product sourced from the non-oil and gas industry, in the first quarter of the year.

“The food and beverage industry is one of our priorities to develop further. Hence, we should simplify the rules so that they can easily get raw materials for their production,” Saleh said. (vps)