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Food and beverage makers expect to maintain strong growth
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Traditional Indonesian crackers (kerupuk) booked total orders of Rp 12.9 billion (US$950,000) at Asia Thaifex 2016 in Bangkok, the biggest food and beverage expo in Asia. (kompas.com/I Made Asdhiana)
F
ood and beverage makers have released a preliminary projection showing that the industry this year could grow at a similarly strong pace to last year, with revenue seen rising by more than 8 percent to Rp 1.4 quadrillion (US$104.47 billion).
The steady growth projection is based on increasing investment last year compared to 2015 as well as on a recovery in consumer spending.
“Investment in 2016 was higher than in 2015, and we expect the result will be seen this year. Moreover, some commodity prices have recovered, leading to greater public spending,” Indonesian Food and Beverage Association (Gapmmi) chairman Adhi Lukman said at the Trade Ministry’s New Year gathering on Monday.
Though revenue is estimated to keep growing, profit margins are projected to decline amid competition with imported products, Adhi said without elaborating. He added that profit margins in the food and beverage industry were typically below 10 percent.
“Global competition is getting tighter. People are exporting [to Indonesia] cheaper products, as they have global value chains with lower production costs,” he said.
“Our homework is to increase the quality of our goods. The government, especially regional administrations, need to also facilitate investment in the industry, so that more can simply be produced locally,” he added.
Adhi explained that inefficient governance at the regional level often hampered new investment. (bbn)
