Local pizza chains looking to expand<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Mamma mia, it's a pizza attack! If you believe the restaurants,
\nat least 80,000 people a day in more than 20 Indonesian cities
\nnow prefer the round, thinly sliced Italian bread topped with
\nmeat, sausages and melted cheese, to a traditional rice-dominated
\nmeal.<\/p>\n
The fast-food pizza industry, which first gained a foothold in
\nIndonesia during the mid-1980s, has been rapidly growing.
\nHowever, unlike similar food chains serving fried chicken and
\nburgers, the number of players in the business has not increased
\nsignificantly, with three chains -- Pizza Hut, Papa Ron's Pizza
\nand Izzi Pizza -- dominating the market.<\/p>\n
The chain that claims it serves \"great pizza\", the country's
\nthird-largest international fast-food brand, Pizza Hut, plans to
\nexpand further and will add 1,000 more jobs to the nation's
\neconomy this year.<\/p>\n
The American-affiliated pizza franchise, which began its
\noperation here in 1984, says it serves 70,000 customers a day at
\nits 100 outlets in 22 Indonesian cities.<\/p>\n
\"We are planning to open 20 more restaurants across the
\ncountry this year,\" Pizza Hut Indonesia president director said
\nStephen McCarthy. The company had experienced a steady 20 percent
\ngrowth in sales over the last four years, he said.<\/p>\n
He said the Indonesian market could support double the amount
\nof Pizza Hut restaurants and a total of 200 would be completed in
\nthe coming four to five years.<\/p>\n
Pizza Hut's holding company, the U.S.-based Yum! Brands Inc.
\nruns over 33,000 fast food restaurants worldwide under global
\nbrands like KFC -- the second-largest international fast food
\nchain in Indonesia -- A&W, Taco Bell and Long John Silver's.<\/p>\n
While the business is foreign-owned, much of Pizza Hut
\nIndonesia's supplies -- vegetables, food packages and uniforms
\nfor their 5,000 workers -- come from local businesses.<\/p>\n
Lured by the growth potential of the domestic pizza sales, two
\nother players entered the business after 2000.<\/p>\n
PT Setiamandiri Mitratama opened its first restaurant under
\nthe name of Papa Ron's Pizza in Jakarta in 2001. \"We are aiming
\nto open branches in Malaysia, Singapore, the United Arab Emirates
\nand China this year,\" said Papa Ron's director of marketing Ron
\nMullers.<\/p>\n
\"There are lots of international brands coming in. Why can't
\nwe establish our own local brand that can expand globally,\"
\nMullers, who is also one of Papa Ron's owners, said. Papa Ron's
\npizzas were adapted to local tastes and used 100 percent local
\ningredients, he said.<\/p>\n
The company has opened 40 restaurants in 13 cities nationwide
\nover the past three years.<\/p>\n
\"We plan to open 12 to 15 more this year,\" said Mullers,
\nadding that each restaurant would need an investment of between
\nRp 1.5 billion (US$162,425) and Rp 2.5 billion.<\/p>\n
Currently, the company, employing 1,600 people, runs only four
\nof the restaurants, while the remainder are operated by
\nfranchisees. \"Our sales reached Rp 200 million a month a branch
\nthis year,\" he said.<\/p>\n
Another local pizza chain, Izzi Pizza, entered the market in
\n2002.<\/p>\n
Izzi Pizza president director Robert A. Eskapa said Izzi
\nPizza aimed to satisfy the demand for casual-dining restaurants
\nin Indonesia.<\/p>\n
His seven restaurants in Jakarta targeted the middle- to
\nupper-income bracket by pricing their food between Rp 60,000 per
\nperson, he said.<\/p>\n
Izzi Pizza outlets serve up to 70,000 dine-in customers plus
\naround another 11,000 in deliveries a month. Management plan to
\nopen two more outlets in Jakarta and others in Singapore,
\nMalaysia and China in the near future.<\/p>\n
\"We will open international branches on our own,\" Eskapa said.
\nTo open an Izzi Pizza restaurant would cost between Rp 2 billion
\nand Rp 3 billion with a payback period of one to three years.<\/p>\n
\"As for branches in Surabaya, Medan, Bali and Bandung, we are
\ncurrently looking for franchise partners,\" he said.<\/p>\n
Unlike its competitors, Izzi Pizza, employing 258 people, uses
\nimported supplies for its key ingredients such as flour, cheese
\nand sauce. \"We want to maintain our standards,\" Eskapa says.<\/p>\n
Aside from their differences, the three leading pizza players
\nall agreed that opening pizza restaurants was a profitable
\nbusiness.<\/p>\n
Although fast food chains have been criticized for endangering
\nconsumers' health, the industry is a big buyer of domestic
\nproducts from local farmers and market gardeners, who employ 58
\npercent of the country's 220 million people. (003)<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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