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F&B companies can withstand COVID-19 crisis for five months: Survey
Indonesian Food and Beverage Association chairman Adhi S. Lukman said that nearly half of the survey’s respondents acknowledged that their companies could continue operating past five months.
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Shoppers crowd an aisle at a supermarket in Tangerang, Banten. (Antara/Lucky.R)
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any food and beverage (F&B) companies will be able to survive the COVID-19 crisis even if the pandemic lasts longer than five months, an internal survey has shown.
Indonesian Food and Beverage Association (Gapmmi) chairman Adhi S. Lukman said that nearly half of the survey’s respondents acknowledged that their companies could continue operating past five months.
“Forty-six percent can still carry on for [more] than five months, the rest can only hold out for one to five months,” Adhi said in a virtual hearing with the House of Representatives Commission VI overseeing trade, industry and state-owned enterprises on Monday.
According to the survey, which was conducted on April 13 with 50 members of the association as respondents, 22 percent said they could maintain their operations for four to five months; 26 percent say they were capable of tolerating the crisis for two to three months; and 6 percent said they could only withstand the current conditions for a month.
The impacts of emergency measures taken by the government to halt the spread of the crisis are less severe for food and beverage companies compared to airline, hotel and restaurant and retail companies.
Despite a partial lockdown on food and beverage operations, sales within the space have remained relatively stable.
Adhi said that food and beverage exports increased in March despite various countries’ travel restrictions.
However, food and beverage companies remain concerned over their cash flow, especially when it comes to handing out employee wages in full and Idul Fitri holiday bonuses (THR).
With no end in sight for the pandemic, some companies are considering cutting back on production and reducing the number of workers. Of the 50 respondents, 36 percent said they were considering taking measures to respond to the blow.
In a separate internal survey conducted by the association earlier, three-fifths of 63 respondents said that the government’s decision to ban the annual mudik (exodus) would impact sales.
Under the ban, which took effect on April 24 and lasts until June 1, travel in and out of virus-hit red zones is strictly prohibited.
“[According to] a small survey conducted with our members on April 2, before a meeting with several ministries, 71 percent of respondents said they estimated that sales would drop 20 to 40 percent,” Adhi noted during the virtual hearing.
On the question of how much they projected sales would drop in the next two months, 9.5 percent of 63 respondents said they expected a 10 percent drop; 19 percent projected a 10 to 20 percent drop; 33.3 percent estimated 20 to 30 percent; and 38.1 percent estimated a drop of between 30 and 40 percent.
