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id- to low-segment retailer Ramayana Lestari Sentosa is set to join forces with Dutch-based supermarket chain SPAR International BV to develop the company'€™s supermarket business.

The publicly listed retailer officiated Wednesday its membership in the Spar chain, which would enable Ramayana to develop a managerial system for purchasing, warehousing, distribution, marketing and sales in line with Spar'€™s standards, Ramayana corporate secretary Setyadi Surya said.

He said the partnership was expected to spur growth in the company'€™s supermarket business, given Spar'€™s well-known name and its success in developing supermarkets worldwide.

Ramayana would set up 30 supermarkets under the Spar name in the next three years, Setyadi said, adding that five of them were expected to be operating before the end of this year. '€œWe will either establish new outlets or rebrand our existing supermarkets to bring the total to 30. This is our minimum target,'€ he explained.

The retailer will spend about Rp 5 billion (US$424,016) on each supermarket, making a total investment of Rp 150 billion.

SPAR International is the world'€™s largest food retail chain with more than 12,000 stores worldwide and reaping global retail sales of ¤32.2 billion ($41.69 billion) in 2013.

Tobias Wasmuht, international retail director with Spar International, said the partnership with Ramayana was consistent with SPAR International'€™s strategy to partner with leading local and regional chains in Asia'€™s growth markets.

'€œTogether, we unite the best of Spar'€™s global retail expertise and Ramayana'€™s extensive and long-standing understanding of the Indonesian customer. Ramayana has a proven record of success and a strong entrepreneurial culture and represents a great strategic partner for SPAR International,'€ Wasmuht said in a press statement.

Ramayana currently operates a total of 118 outlets, which comprise department store Ramayana and supermarket Robinson.

The company'€™s finance director, Suryanto, said that Ramayana outlets contributed about 80 percent to the firm'€™s total revenue, while Robinson provided the remaining 20 percent.

Suryanto said that while the firm still relied on its department stores for the bulk of its income, it was also keen to enhance its supermarket business to boost revenue.

'€œWe hope that this partnership will help Ramayana to increase its revenue by 20 to 30 percent in the next three years,'€ he said.

According to the firm'€™s 2013 annual report, Ramayana saw its supermarket business slow due to tightening competition with minimarkets in the food retail industry.

According to media reports earlier this year, Ramayana had previously mulled whether to seek new investors to develop Robinson and enhance its quality, or divest its ownership in the supermarkets due to the fierce competition.

The retailer announced a stagnant first-half financial performance this year.

Its revenue rose by only 7.79 percent year-on-year to Rp 2.35 trillion. Meanwhile, its profits dipped slightly to Rp 103.06 billion, down from Rp 107.43 billion in the first half of last year, as a result of rising labor costs and inflation, which hit the retailer'€™s consumer segment hard. The company'€™s first half financial report also showed that its supermarket business had suffered a net loss of Rp 14.43 billion.

JP/Anggi M. Lubis