So great is the dependence on the use of imported raw materials, both for fragrance and aroma/flavor that the expansion or establishment of a new factory in this field will reduce a lot of import dependence. Vice Minister of Industry, Alex S.W Retraubun, when inaugurating PT Firmenich Aromatics Indonesia (FAI) plant expansion in Karawang, West Java on Friday (October 25) stated that to produce fragrance, it takes approximately 1.500 raw materials, and to produce aroma/flavor, it takes approximately 3,400 raw materials.
“Therefore, the inauguration of FAI factory is in line with downstreamization spirit in order to optimize and strengthen domestic and international market domination. Moreover, those who are utilizing this industry is about 3 billion people in the world. Thus, the utilization of these natural resources will increasingly strengthen Indonesia’s position, because to Indonesia, these products can be applied with industry standards as criteria of fulfillment of product category”, Alex said.
The increase of food and beverage industry ranging from large industry, small and medium industry to household industry, small and medium industry to household industry causes an increase of demand of flavor for food and beverages. Food and beverages industry sectors are heavily dependent on the availability of flavor. With an additional investment of USD 33 million that generates a production capacity of 27 thousand MT/year, it will strengthen the structure of the food and beverage industry.
And, the establishment of the new factory Durarome will put Firmenich Group as one of the world’s largest producers and flavor. As an illustration, Durarome is an encapsulated flavor applied to the food, beverage, and pharmaceutical industry as powder soft drinks, confectionery, nutrition & dietary, savory (in citrus tonalities), hot drinks and pharma. According to Alex, the investment climate in the country was increasingly improving, supported by the increase of purchasing power. Therefore, the company is expected to continue to strengthen supply chain network with upstream producers as well as partners in the user industries in the downstream sector.
As stated by Deputy of Investment Implementation Control at BKPM (Investment Coordinating board), Azhar Lubis, Firmenich is one of 150 Swiss companies that invest in Indonesia. Indonesia’s conductive investment climate is proven by the expansion of a number of automotive factories and also a number of cement plants, such as Holcim, which is estimated that as nearly as 40% is in the form of investment and business expansion or addition of plants.
Reduce Raw Materials
Advisor of Indonesian Essential Oil council (DAI), Wien O. Gunawan, told Business News that roughly about two years after the plant was officially established, import of flavor raw material can be reduced up to 50%of the needs that so far has been imported from Europe and United States. Even, with its operation that will make Indonesia as a production base for fragrances in Cileungsi and flavor in Karawang, in addition to meet the needs in the Asia-Pacific region. Even later, it is estimated that import can be reduced up to 95%, he said.
With utilization of production that has reached a series of industries, in addition to utilizing natural resource potential, the resulting efficiency is quite high, so that this industry is ready to compete in facing the ASEAN Economic Community 2015.
Business News - October 30, 2013