The Ministry of Industry set target growth of 8% for F & B industry this year, uplifted by public consumption related to General Election 2014. Data of the Ministry had it that production capacity of F & B industry in 2012 was posted at 63 million tons. Today there were 1,952 companies being active in that sector. Total production of 2012 was posted at Rp 712 trillion, up by 8% compared to previous year at Rp 60 trillion.
The Secretary General of the Association of Indonesian F & B Producers [GAPMI] Franky Subarani stated in Jakarta on Monday [24/2] that he agreed on Government’s target. Franky was expecting that money circulation during General Election might come to Rp44 trillion and could be benefited by F&B traders. By year end, Franky was optimistic return of F&B industry could break through Rp789 trillion or increasing by 6% against returns of 2013 at Rp745 trillion.
GAPPMI estimated that F&B consumption would be much absorbed by events run by the political parties. The activities were expected to help to increase sales of F&B products. However, Franky said that many challenges had to be faced by the F&B industry this year. He showed as an example increase of Basic Electricity Tariff of I.3 category which came to 38.9%. Price of gas would increase too while Dollar was still strong. “This is a challenge we all have to face. How to keep all obstacles from lowering performance of the F & B industry” he said.
Therefore Franky said, players of the F & B industry might increase their product price by 10% - 15% due to increased production cost. Franky said that the challenge of election year was increase of production cost, which was on account of several factors like increased BI’s benchmatk rate which had come to 7.5%. Increase of production cost might jack up selling price of the F & B products would think twice before reducing the content of product.
The same was disclosed by Tryono Priyosoesilo, Chairman of the Association of Light Drink Producers [ASRIM]. He believed that the 2014 political year would jack up demand of fast food products by up 9% against 2013. Producer of light drink products estimated consumption of fast food products in Indonesia might come to 24 billion litres due to demand for fast food products.
Drinks for fast food restaurant included among others packaged tea, carbonated or soda drinks, packaged drinking water in the form of juice, coffee, milk and isotonics. Triyono estimated the projected profit from F & B industry was too measly. Electricity tariff increase and depreciation of Rupiah had their impact on the industry. He was expecting that the Government realized that the condition of domestic was unfavorable due to many factors. The recommended step to be taken, Triyono said was to suspend increase of electricity tariff which would be in effect gradually per May 2014. (SS)
Business News - February 28, 2014