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Jakarta Post

Indofood to continue expanding despite sluggish economic growth

  • Stefani Ribka

    The Jakarta Post

Jakarta   /   Wed, August 9, 2017   /   05:03 pm
Indofood to continue expanding despite sluggish economic growth Shoppers browse through a food and beverage section at a supermarket in Tangerang, Banten. (Antara/Lucky.R)

Publicly listed food giant PT Indofood Sukses Makmur (INDF) plans to increase production and the processing capacity of its various businesses despite sluggish domestic economic growth.

The firm is now building more production lines for flexible packaging, milk, ice cream, instant noodle and flour, as well as greater processing capacity for palm oil, Indofood head of investor relations Werianty Setiawan said on Wednesday

The expansion will be funded from the firm's allocated capital expenditure (capex) of Rp 9.1 trillion (US$682.6 million) this year.

Only Rp 2.1 trillion of the total capex had been spent in the first half, said Werianty, adding that perhaps only 60 to 70 percent of its expenditure target would be met by year-end, as usually happened in terms of capex absorption every year.

"Despite the flat economic growth [in the first half], our expansion will continue in the second half," she told reporters on Wednesday.

Read also: Indofood CBP records positive profit trend in first half

Indonesia booked 5.01 percent economic growth in the second quarter, the same rate it booked in the first three months.

Household spending grew by 4.95 percent annually in the second quarter, up slightly from 4.94 percent in the first quarter. (bbn)