With shrinking demand from the main buyers of Indonesia’s exports, such as the United States and the European Union, the country’s food and beverage producers urgently need to diversify their markets, the head of an industry association says.
“Our members say that China, India and Russia are among the most promising alternative markets for our food and beverage products this year,” Thomas Darmawan, the chairman of the Indonesian Food and Beverages Association or Gapmi, said on Friday.
Food and beverage export volumes in 2009 will decrease slightly to around $2 billion from $2.3 billion last year, he predicted.
“Besides exporting to China,” he said, “this year should also provide an opportunity for Indonesian food and beverage producers to win some of China’s export markets following the melamine scandal, which has affected overseas demand for Chinese food products.”
He said that both large and small Indonesian producers were relatively well-positioned this year as they had introduced various efficiencies in the utilization of machinery and raw materials.
“However, it will be difficult this year for the industry to maintain exports, but we hope we can compensate for any decreases by upping our efforts in the domestic market in line with the government’s decision to prioritize domestic products this year,” he said.
The new government policy envisages the slapping of restrictions on imports, which should result in higher demand for domestic products, thereby helping local food and beverage producers maintain production levels, he said.
However, he admitted that it would be a challenge for local industry to match the quality of imported products.
Separately, the Ministry of Industry’s director general of small industries, Fauzi Azis, said that food and beverage producers needed to focus on continually improving efficiency and product quality by complying with the government’s industrial standards and product certification and accreditation rules.
“Firms need to improve their food-processing technology, prioritize the use of locally produced raw materials and upgrade their human resources,” he said.
In its recently published December review, the Industry Ministry focused on the wheat flour, fresh milk and mineral water sectors.
The ministry said that the country’s six wheat flour producers sold 3.7 million metric tons of flour on the domestic market in 2008, with the remainder being exported.
Meanwhile, fresh milk production increased to 658,971 tons in 2008 from 637,314 tons in 2007, and bottled mineral water production to 14.5 billion liters from 13 billion liters.