Capturing Market Share of the Baking Industry outside Java
Medan, September 30, 2011 – Breads were first introduced in Indonesia during the Dutch colonial period. Since that time, Indonesians have begun to accept breads as snacks. Today, consumers eat bread as an alternative meal due its practical nature and nutritious ingredients. The market share of baking industries may seem small, but the facts indicate its consistent growth.
“The bakery and bread markets are growing consistently each year. The annual growth rate ranges from 5 to 7 per cent. Our production capacity is approaching its maximum limit between 70-80 per cent. With market demand growing consistently throughout Indonesia the company is compelled to expand its production capacity,” Yusuf Hady, the Director of Operations at PT. Nippon Indosari Corpindo, Tbk explained during the official opening ceremony of SARI ROTI Production Plant in Medan.
The 5th production plan is officially opened by Ms Wendy Yap, the President Director & CEO of PT. Nippon Indosari Corpindo, Tbk. Mr. Kaneyoshi Morita, Senior Managing Director of Shikishima Japan and the Board of Directors of PT. Nippon Indosari Corpindo, Tbk were also present.
“This new production facility is constructed in order to capture market opportunities in Sumatra region, especially in Medan and Aceh. Additionally, the presence of SARI ROTI in these areas represents our commitment to distribute high quality, healthy, and halal foods at affordable price for the majority of Indonesian people,” added Yusuf.
According to Yusuf Hady, the investment on the expansion of production facility in Medan is worth IDR 70 billion and it took 6 months to complete. Since its initial operation, the facility which occupies an area of 14,730 m2 at Medan Star Industrial Estate have been producing 72,000 loaves of white bread and 144,000 pieces of buns daily. Beads are produced using sophisticated equipment and under the supervision of Shikishima Japan.
“Since the Initial Public Offering (IPO) and listed under “ROTI” stock symbol in Indonesian Stock Exchange in 2010, the stock movement of PT. Nippon Indosari Corpindo, Tbk has indicated positive movements. 19% of the shares have been publicly traded and PT. NIC has generated an ROI of up to 165% for shareholders. Additionally, with the construction of the new production plant, more local workforces will be absorbed which ultimately, we hope, will help to boost the company growth,” added Yusuf.
The new production plant in Medan is supported by a distribution network which includes 63 supermarkets, 224 mini markets, 22 agents, 991 shops, and 140 hawkers on bicycle throughout the areas of Medan City, Binjai, Stabat, Tebing Tinggi, Brastagi, and Kabanjahe. Starting from October 1, 2011 the network will be further expanded to include such areas as Asahan, Labuhan Batu, and Banda Aceh.