Business growth stories in eastern Indonesian provinces have attracted major franchises to expand there, including American fast food giant McDonald's.

The company’s Indonesian arm, which operates under PT Rekso Nasional Food, announced last Friday that it would open a McDonald’s in Gowa regency, South Sulawesi, as part of its large-scale plan to open outlets in other eastern Indonesia cities.

Gowa, a two-hour drive from South Sulawesi’s capital of Makassar, has seen its economy grow aggressively in past years, led by agriculture, trade and construction. The McDonald’s in Gowa will be one of two outlets the company will have opened in the past couple of months, as well as the company’s sixth outlet in the province.

McDonald’s Indonesia operational director Laksmi Zasmiati said the company was compelled to expand beyond Makassar since the market in South Sulawesi had been very robust. In total, the company has established six outlets in South Sulawesi since 2000 — five outlets in Makassar and one in Gowa.

Laksmi said a survey the company recently conducted on its outlets in Makassar showed that the customer base was not limited to locals. People visiting from neighboring cities and regencies in the province, including Gowa, also accounted for a considerable bulk of the company’s customers in Makassar, she said.

“As South Sulawesi’s largest city, Makassar has massive potential for business expansion. We keep attracting more customers there,” Laksmi said, adding, that McDonald’s had planned further expansion in South Sulawesi considering the province’s positive growth.

“Next year, we plan to open four more outlets in South Sulawesi. Not only in Makassar, but also in other cities. We’re currently conducting a survey in Parepare."

McDonald’s Indonesia spokesperson Sutji Lantyka said apart from the new outlets planned in South Sulawesi, the company had also planned to expand to Central Sulawesi, Southeast Sulawesi, West Sulawesi and Gorontalo, as well as other provinces in eastern Indonesia.

“We’ll continue our expansion to several cities in Java and eastern Indonesia, with a target of 500 McDonald’s throughout the country in five years,” Sutji said.

She went on to say the new outlets had significantly increased the company’s overall contribution to regional income which, in turn, improved their hosts’ economic growth. The company’s expansion also created new jobs for locals, improving their welfare, she said.

Bank Indonesia’s (BI) advisory and economic development head in South Sulawesi, Endang Kurnia Saputra, said the province had seen significant growth in recent years.

BI predicts the province will achieve up to 7.4 percent growth, surpassing the 5 percent target for national economic growth.

The contribution of the food and beverage (F&B) industry to GDP increased steadily over the past four years in spite of the decrease of its growth last year, according to the Indonesian Food and Beverage Association (GAPMMI).

“The F&B industry’s contribution to GDP increased to 6.25 percent last year from 6.14 percent in 2017, 5.97 percent in 2016, 5.61 percent in 2015 and 5.32 percent in 2014,” said GAPMMI chairman Adhi Lukman in July.

Meanwhile, the industry’s growth reached its highest level of 9.49 percent in 2014 before slowing down to 7.54 percent in 2015. The growth increased again to 8.33 percent in 2016 and to 9.23 percent in 2017 before slowing down again to 7.91 percent in 2018. (rfa)

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