GarudaFood plans to boost sales by 30%, but delays IPO

Ika Krismantari, The Jakarta Post, Jakarta | Wed, 02/25/2009 1:52 PM  

Food producer, PT GarudaFood, is seeking to increase its sales by 20 percent this year as demand for food and beverages is expected to remain robust despite the global financial crisis. 

Managing director Hartono Atmadja said Tuesday that he was upbeat about the company' prospects, saying sales are targeted to hit Rp 3.65 trillion (US$306.6 million), from Rp 3.04 trillion last year. 

"The growth will be supported by *the sales from* biscuits and beverage products," Hartono said. 

Sharing his optimism, the company forecasts that the country's food industry will grow by up to 15 percent this year, as the demand for food will never stop. 

"We have not even incorporated the *additional* revenue the industry would get from the decline in imported products," Hartono said. 

The government has introduced limitations on the imports of unnecessary products earlier this year by cutting down the number of seaports and airports eligible as the entry point for certain products, with the aim of controlling smuggling products as well as the protecting of domestic markets. 

Under the policy, five categories of goods, namely garments, footwear, toys, electronics, food and beverages can only enter the country through five designated ports and some international airports. 

The Indonesian Food and Beverage Association (Gapmmi) has said that local industry would benefit from the import limitation policy and this could boost local sales by up to 15 percent. 

On the company's plan to go public, Hartono said the company has decided to delay the plan until the first semester of 2010, to wait for a better market environment. 

Garuda had planned to offer a 15 per cent stake to the public in the third semester of last year through an initial public offering (IPO). 

Garuda financial director Samuel Triswandi said the company would still expect to secure Rp 1 trillion from the IPO. 

Last year, Garuda booked a 23 percent rise in revenue up to Rp 3.04 trillion, whilst pushing up its net profits by 74 percent. 

The company however, refused to mention the value of its net profits. 

Data from the Central Statistic Agency (BPS) show that as of the third quarter in 2008, the food industry grew by 10.4 percent from the same period a year earlier. 

Garuda is a subsidiary of Tudung Group, a holding owned by businessman Sudhamek AWS. 

Tudung Group was established three years ago after Sudhamek decided to expand its business to other business sectors, including palm oil.

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UNILEVER INDONESIA OPTIMISTIC ITS SALES WILL HOLD UP

Textile Producers Flooded with Election Orders

Tuesday, 24 February, 2009 | 13:08 WIB 

TEMPO Interactive, Jakarta:The sales of textile and textile products have increased by almost 15 percent because of the 2009 Election momentum. 

Ernovian G. Ismy, the Indonesian Textile Association Secretary General, said that orders from the elections had gone up by between 10 percent and 40 percent compared to the previous election. 

“The demand previously increased by 30 percent,” said Ernovian at the Industry Department in Jakarta, yesterday (23/2). 

According to Ernovian, one party that has ordered in large quantities is Gerindra, which has ordered tee shirts and banners. 

The party ordered five million tee shirts--costing Rp7.000 each--from a textile producer in Bandung, West Java. 

Benny Soetrisno, the Indonesian Textile Association Chairman, said he hoped members would earn Rp5 trillion from the election. 

He stressed however that his association members have requested cash payments. 

“We do not accept payment in installments. We only make orders according to the amount paid,” said Benny. 

The reason for this, he continued, was because in the previous election many textile producers suffered financial losses as there were some parties that failed to pay the amounts required. 

NIEKE INDRIETTA

Japan textile market to grow

The Jakarta Post, JAKARTA | Tue, 02/24/2009 11:04 AM 

The textile sector may double its market share in Japan by 2010, helped by the Indonesia-Japan economic partnership agreement (EPA). 

“Our exports to Japan in 2008 were around US$650 million, we hope that the value will increase to around  $1 billion to $1.5 billion by the end of 2010,” Industry Ministry’s director general for metal, machinery, textile and miscellaneous industries, Ansari Bukhari said Monday.

 

JP/IRMA

He was speaking at a seminar on the Indonesia-Japan EPA. 

The value of last year’s textile exports to Japan was about 7.8 percent higher than the one recorded in 2007, which was about $603 million. 

As for the target for 2009, the industry targets exports to Japan will reach around $700 million.

The Indonesian Textile Association (API) hopes that the IJ-EPA, a free trade agreement between the two countries signed last year, will facilitate that Indonesia’s textile industry can achieve ambitious targets even during difficult times. 

“We hope that with the IJ-EPA (in place), it will be easier for us to take a greater share of  the Japanese market, now dominated by China,”  API chairman Benny Soetrisno said. 

Ministry data shows China  dominating the Japanese textile market with a market share over 75 percent. 

Benny also hopes that with IJ-EPA the Japanese government can help Indonesian textile business owners to access credit to help fund capital expenditure on Japanese machinery and technology, especially as Japanese textile machinery exports declined by more than 25 percent last year due to the crisis. 

“Japan needs to provide us with better payment schemes to rehabilitate our textile machinery. In return, Japan will be able to improve its machinery exports and prevent employee dismissals,” Benny said. 

In common with Japanese industry, the textile industry in Indonesia faces a less than favorable period, but the IJ-EPA gives an advantage. 

Industry Minister Fahmi Idris said textile exports would certainly decline overall during the crisis.

“It is very likely that the industry’s  overall volume of exports will decline in 2009 because of the global crisis, but hopefully the value of exports will not fall below $8 billion.”  

The value of the country’s textile exports was estimated at US$10.8 billion last year (2008), a modest improvement on the $10.3 billion recorded in 2007.  

“Japan is the third largest importer of our textiles after the US and the EU countries. There will always be a need for clothing in four-season countries like Japan. We also believe we will still be able to export our products to (EU and US), but not as much as we used to,” Fahmi said. 

“To improve our market share in the Japanese market, we need to improve our market research as well. Japanese consumers have high standards on quality and designs, and their tastes change constantly.”  

It was felt the IJ-EPA, along with access to special credits, would favor greater exports to Japan even if exports to the EU and US might fall. 

Fahmi said the government is also looking at new markets in the countries of the Middle-East region. “The crisis impact is not so severe in the oil rich countries,” he said. (hdt)

Retail boom drives $12bn regional textile industry

AMEinfo

Rising consumer spending, increased tourism and rapid growth in new malls and shopping centres is driving massive growth in the Arabian Gulf clothing market, say the organisers of the region's biggest garments and fashion accessories event

The United Arab Emirates and Dubai in particular, is leading the way as it vies to become one of the world's fashion capitals and bids to attract 15 million tourists annually by 2010. Dubai is already the major regional hub for textile imports and re-exports.

Recent statistics from UK-based research company Retail International confirm Dubai's dominance with 30% of the total retail space in the Gulf Co-operation Council (GCC) region. In 2008, Dubai will also become home to five out of the world's seven largest shopping malls.

Motexha, an interactive platform for industry professionals which this year takes place at the Dubai International Exhibition Centre from 31 March to 2 April 2008, continues to drive the region's textiles industry, estimated to be worth over $12bn

'The world's fashion and textile industry cannot ignore the stellar growth taking place in the Middle East market with the UAE the biggest textile fashion market in the GCC,' said Jim Meltz, Show Manager for Motexha at IIR Middle East.

Dubai has secured its position as the regional textile trading hub according to a recent report by the Emirates Industrial Bank. In 2006, Dubai's textile imports were valued at $3.75bn - an average increase of 11% over 2002. Dubai saw an even higher surge in terms of re-exports with 13.3% growth during the period from 2002 to 2006 to almost $2bn.

'The opening last year of the six million square feet Dubai Textile City gives a further boost to the textile trade in Dubai,' Meltz added. 'Fabrics are mainly imported from South Korea, Japan, China, India, Indonesia and Thailand. These products are further re-exported to countries including Iran, Iraq, Saudi Arabia, East Africa and former Soviet Union states.'

Dubai Textile City is expected to become the Middle East point of reference for trade to and from Europe, China, India and even the USA and is spread over six million square feet just ten minutes from Dubai International Airport. The zone's tax-free status will attract global players, giving the $3bn market a boost. Setting up business there entitles owners to 100% import and export tax exemptions, no corporate taxes for first 15 years, no personal income taxes as well as additional support services such as sponsorship and housing.

'The excellent contribution of the emirate's entrepreneurial free zones is an important part of Dubai's phenomenal growth rate,' Meltz said. 'Textiles are regarded as Dubai's second biggest re-export commodity and Motexha continues to support industry growth.'

More than 250 exhibitors from over 25 countries are expected to participate in Motexha 2008 a 12% increase over 2007 with ladies' wear and fashion accessories continuing to dominate the industry mix. The show also features PURE - a dedicated arena for international brands and franchise labels, showcasing mid to high-end brands and new designers.

Motexha has received wide international industry support including from the Apparel Export Promotion Council of India and the Taiwan Textile Federation. Turkey will be among 10 country pavilions participating at Motexha with government supported participation.

SME expo organized to boost local products

The Jakarta Post, Jakarta

A five-day expo featuring the products of more than 300 small and medium enterprises will open Wednesday in a new trade center in Tanah Abang, Central Jakarta.

The annual event, which will take place in Mall UKM on Jl. KH Mas Mansyur, has been organized by the city administration for the second time to boost local products.

The expo will offer handicrafts, batik clothing, garments, furniture, souvenirs, accessories, leather products, herbal products and food and beverages.

Fashion shows, musical performances and talks on SME will also be held during the event, which will open to the public from 10 a.m. to 5 p.m.

Head of the Jakarta Cooperative and SME Agency, Mara Oloan Siregar, hopes the expo will benefit both entrepreneurs and visitors, while at the same time promote Mall UKM, which accommodates more than 500 SMEs in its six-story building.

"We hope the expo will provide the chance for entrepreneurs to meet local and foreign buyers," Siregar said Monday, adding the expo would also allow participants to get to know their customers' tastes and needs.

Siregar said SMEs play an important role in the country, constituting 99.98 percent of the total economic players, with 90 percent of the economic activity in Jakarta involving SMEs.

"That's why such an event is important to boost local products, especially when many people now prefer to buy imported products," he said.

He added the expo and the new trade center would offer buyers cheaper prices, as the latter could purchase items directly from the producers.

"We guarantee customers will get high quality products at reasonable prices," he said.

For example, Siregar said, batik clothing that is sold at Sarinah Jaya department store for around Rp 750,000 (US$ 81) a piece can be purchased at the UKM Mall for only Rp 250,000 a piece.

Siregar said his team carefully selected the participating entrepreneurs. The participants had to pass several assessments before they could display their products in the expo and run their businesses in the mall for a period of two to three years for free.

"We selected those who are hardworking, persistent, target-oriented and who have the ability to produce high quality items."

He said one of the constraints facing SMEs is finding places to promote their products. Taking part in an exhibition is costly and entrepreneurs are only able to promote their products there for a few days.

"That's why we provide free-of-charge spaces for the SMEs to display their products in the mall, where people can go everyday," he said.

One of the entrepreneurs participating in the expo is Lindawati, who runs a marquisa (passion fruit) syrup business. Before the mall was opened, she had been selected by the city administration to participate in an exhibition in China.

"I had the chance to promote my products on the international market and got some export offers," said Linda, who started her business in 1998.

"This is much better. I used to take my products from one shop to another," she said, adding the city administration also provided her and other entrepreneurs with several workshops on marketing, management and technology. (dia)

Indonesia to build textiles city in West Java

Jakarta (ANTARA News/Asia Pulse) - The Indonesian government and private investors plan to make Majalengka in West Java a textiles city under a program to cost Rp1.7 trillion (US$190 million).

Majalengka would be the country's first industrial estate specially for textiles and textile products, Metal, Machine, Textile and Multifarious Industries Director General Ansari Bukhari said.

The central and regional administrations and the Indonesian Textile Association (API) are serious about carrying out a feasibility study on the project, to be completed in three years.

Many textile factories in areas prone to flooding south of the West Java capital of Bandung would be moved to Majalengka, he said.

Fix quality, garment producers told

The Jakarta Post, Jakarta

Indonesia's garment producers have to improve productivity, service and, most importantly, quality, if they want win a bigger share of the world market, particularly in the United States, a consultant suggests.

"Price is no longer a major issue in the world garment market, but product quality is," Senada global marketing consultant Andreas Saldias Pozo told a media conference Thursday.

Senada recently conducted a two-week survey, which was financed by the U.S. Agency for International Development (USAID), on the prospects for Indonesian garment exports in the U.S. after the removal of the export quota for Chinese garments at the end of December 2008.

The study found that Indonesian manufacturers had the potential to grow sales in the U.S. market, but lacked efficiency.

Pozo said the survey showed that only half of Indonesia's garment producers had an efficiency rating of between 80 and 85 percent.

Pozo suggested that local garment manufacturers improve their competitiveness through improving workers' skills and reequipping.

The government has allocated Rp 255 billion (US$246 million) in subsidies and low-interest loans this year to help textile producers purchase new machinery.

"There is still more room for improvement to anticipate the global race with leader China, and others that have only recently become players, including Vietnam, following the lifting of the Chinese quota," said Pozo.

China, the world's leading garment supplier, exports its garments to the U.S. based on quotas extended by that country. The three-year quota system will expire on Dec. 31 next year.

Other major exporters are the Eastern European countries, Pakistan, Tunisia, Korea, Vietnam, Thailand, Bangladesh and Indonesia.

In addition, Pozo suggested that local garment manufacturers provide more services to buyers, and develop the home market to reduce their dependence on exports.

"Garment manufacturers need to provide more services to buyers, such as arranging on-time shipments and payment at the buyers' warehouses instead of the producers' warehouses," he said.

"In this face-to-face business, manufacturers also need to negotiate directly and build good relations with buyers in their home countries. Go to the U.S. and don't wait for buyers' agents to place orders," he added.

Indonesian garment producers, whose exports were worth 4.5 billion last year, ship about 47 percent of their total exports every year to the U.S. -- the world's second largest market after the E.U. -- but control only between 3 and 4 percent of the U.S. garment market, which is worth $75 billion a year, according to the study.

U.S. clothing companies that buy garments from Indonesia include Banana Republic, G.A.P. and ESPRIT, according to Pozo.

Major U.S. garment suppliers are Mexico, with 20.7 percent of the market, worth around $8.1 million, followed by Honduras with 13.4 percent and El Salvador with 5.05 percent.

Worldwide, the value of the garment trade stands at $300 billion, and is growing by 7-10 percent per year.