Unrest hampers distribution, causes increased costs: Eva<\/p>\n
NUSA DUA, Bali (JP): PT Indofood Sukses Makmur expressed
\nconcerns on Thursday over increasing political and social tension
\nin the country, saying that it could hamper distribution of the
\ncompany's products.<\/p>\n
Indofood president Eva Riyanti Hutapea said on the sidelines
\nof the second World Ramen (Noodle) Summit here that social unrest
\nhas penalized the company with increasing costs.<\/p>\n
\"We have no problems with the recent political developments
\nunless there is unrest. If there is unrest, that's terrible,
\nshops are closed, and people cannot do anything,\" Eva told
\njournalists.<\/p>\n
\"When an insecure situation occurs, it's difficult to get
\ntransportation. If we want to go anywhere, we have to wait and
\npay a much higher price.\"<\/p>\n
Eva hoped the government can finally restore security and
\norder in the country, which has been rocked by a series of
\nreligious and ethnic-related riots.<\/p>\n
To reduce distribution risks and costs, Eva said, the company
\nhad built noodles processing plants in 11 provinces in Sumatra,
\nJava, Kalimantan and Sulawesi.<\/p>\n
The chairman of the Indonesian Food and Beverage Producers
\nAssociation, Thomas Darmawan, supported Indofood's argument and
\nsaid the government should help the private sector to address the
\nproblem.<\/p>\n
Thomas said the government could consider turning the National
\nLogistics Agency (Bulog) into a profit-orientated distribution
\ncompany.<\/p>\n
Bulog's vast network and warehousing facilities would make it
\na competitive distribution company when managed professionally,
\nhe said.<\/p>\n
In an uncertain situation like now, he said, producers with
\nvast distribution networks would excel.<\/p>\n
Indofood, therefore, would continue to dominate the domestic
\nmarket until a new competitor with a better distribution network
\nemerged, he said.<\/p>\n
Currently some local instant noodles manufacturers are trying
\nto emulate Indofood's distribution strategy by building plants in
\ndifferent places closer to the customers, he went on.<\/p>\n
Indofood controls more than 90 percent of the domestic instant
\nnoodle market.<\/p>\n
Distribution, nevertheless, is a delicate issue in a vast,
\nimpoverished country like Indonesia, said T. Tjeng, a delegation
\nfrom China.<\/p>\n
Bureaucratic procedures and licensing often became hurdles for
\ndistribution companies to reach all parts of the country, he
\nsaid.<\/p>\n
Indonesia, as the most efficient producer of instant noodles,
\ncould sell the products at much lower prices to consumers if
\ndistribution was smoother.<\/p>\n
Koki Ando of the Nissin Food Co Ltd of Japan said at the
\nopening of the noodles producers summit here that distribution
\nwould not be a problem for popular products.<\/p>\n
Products sought after by the people would easier reach the
\nconsumers as people would automatically build their own
\ndistribution networks. Producers would need to distribute to
\nmajor cities only, and people would then distribute them to
\nremote areas.<\/p>\n
But for products less known by the people, distribution was of
\nprime importance for producers. They must cooperate with
\ndistributors with good networks or build their own top notch
\ndistribution systems. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/unrest-hampers-distribution-causes-increased-costs-eva-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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