Undeterred by the economic slowdown, publicly listed company Indoritel Makmur Internasional, partly controlled by the Salim Group, will further boost the business expansion of its subsidiaries to maintain future growth.

As a subsidiary that makes the biggest contribution to Indoritel’s total revenues, Indomarco Prismatama, which operates minimarket chain Indomaret, aims to open 1,600 new stores across the archipelago this year.

“With a total population of around 250 million people, we still have ample opportunity to grow in Indonesia,” Indoritel director Haliman Kustedjo said Monday.

Currently, Indomarco plans to expand its minimarket network to every province and to the smallest administration units or villages in the country to help the company grow faster.

As of December 2015, there were 12,210 Indomaret outlets across the country, with 3,889 stores owned by individuals or groups that brought franchises from the company. By May, the number had increased to more than 12,900 stores.

Indomarco saw its total revenues reach Rp 49 trillion (US$3.67 billion) in 2015, which represents a compound annual growth rate (CAGR) of 20.6 percent over the past three years.

Based on the company’s data, its net profits also grew significantly to Rp 758 billion with a CAGR of 26.7 percent from 2013 to 2015.

As a group, Indoritel booked a net profit of Rp 414 billion in 2015, up by 20 percent from Rp 345 billion in the previous year. Haliman, however, declined to comment about the consolidated sales target for Indoritel this year.

Besides Indomarco, Indoritel’s subsidiaries include Nippon Indosari Corpindo, Fastfood Indonesia and Mega Akses Perkasa.

Nippon, which produces the Sari Roti brand bread, made the second biggest contribution to Indoritel’s total revenues.

On a separate occasion recently, Nippon said it projected a 20 percent sales growth this year after recording a 16 percent growth in 2015.

“The company’s profits increased significantly because of the declining cost of the raw materials used for production,” Indoritel president director Harjono Wreksoremboko said, adding that the price of the wheat and sugar used to make bread has dropped.

In terms of financial performance, Nippon saw its sales increase by 16 percent last year to Rp 2.17 trillion from the Rp 1.88 trillion booked in 2014. Nippon’s net profits also rose by 37.5 percent to Rp 264 billion last year from 192 billion a year before.

Meanwhile, Indoritel’s third subsidiary, Fastfood Indonesia (FFI), the local franchisee of US fast food restaurant chain Kentucky Fried Chicken, aims to expand its sales by 7 to 9 percent to Rp 4.9 trillion this year.

“To improve the company’s performance, we will focus on reducing chicken wastage and expand to more cities,” he said.

As part of the company’s strategy to increase sales, FFI will open 40 new restaurants and 10 KFC Boxes, which are smaller outlets that focus more on takeout sales.

Last year, FFI saw its net profits slightly decline by 1.6 percent to Rp 124 billion from Rp 126 billion the year before. The company explained that some challenges faced by the company include the rise of the regional minimum wage (UMR).

It also acknowledged a growing competition among local culinary practitioners in Indonesia was a threat as it has caused tenants to pay more for their rental costs as space availability has become more limited.

Indoritel, formerly known as Dyviacom Intrabumi, has focused its business on the consumer and retail industries. In June 2013, the company conducted a rights offering in Indonesia and raised Rp 7 trillion by offering new shares. Then it acquired a 40 percent stake in Indomaret, a 31.5 percent stake in Nippon Indosari Corpindo and a 35.8 percent stake in Fastfood Indonesia.

Last year, it also acquired a 71.89 stake of a fiber optics network operator called Mega Akses Persada. (win)

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