Enseval expects 20% growth in 2004 despite election uncertainty

Enseval expects 20% growth in 2004 despite election uncertainty

PT Enseval Putera Megatrading is a leading distributor of
health products and consumer goods. The company has four
divisions, that is pharmacy, consumer goods (cosmetics, health
food and drinks), medical devices and raw materials for medicines
and consumer goods, with the pharmacy division contributing most
of the company's revenue. Enseval's president director Budi
Dharma Wreksoatmodjo accompanied by managing director Teddy Iman
Soewahjo talks with The Jakarta Post's Fitri Wulandari on the
company's strategy and outlook for 2004.

Question: How did the company perform in 2003?
Answer: In 2003, our business grew by 20.5 percent. We expected
higher growth, but there was a slight correction on consumers'
purchasing power in the second semester of the year so that we
didn't grow as we had expected.

In 2002, we grew by more than 40 percent because we received
new suppliers, which boosted our sales. Most of the products in
2002 were leading products such as Extra Joss, milk products from
the Sustagen Group and products from Sara Lee.

But the 20.5 percent growth was above average because many
similar companies could not reach double digit net sales.

Our net sales for 2003 was Rp 3.75 trillion (US$443 million)
and net profit was Rp 160 billion.

Has your company had progress with its debt restructuring?
We owe a total of $30 million to international and local banks,
namely Royal Bank of Scotland, Summitomo-Mitsubishi, Mitzuho,
Indosuez and Lippo Bank. We have submitted proposals to repay the
loans in five years instead of seven years. And we are now
awaiting their answer.

How will the current macroeconomic stability affect your
business?
Business in health-related products and consumer goods is a bit
low because consumers' purchasing power is weakening. But we hope
to get a multiplier effect in the consumer goods sector from
lower interest rates. Lower interest rate would prompt people to
reinvest in new businesses, which would create employment. From
the employment created we would expect more purchasing power to
follow.

How does the company survive competition?
Compared to other companies, we can survive because we have
strong infrastructure. This supports our commitment to our
customers. We have two kinds of customers: suppliers and buyers,
or outlets who buy products supplied to us. We try to deliver
products entrusted to us by our suppliers as close as possible to
the buyers.

We have 40 branches across Indonesia and 1,468 delivery
vehicles. Each branch has its own warehouse and delivery
vehicles.

But most important to our customer service is information
technology. In 2002, we invested some Rp 15 billion in hardware
and software to support our information technology
infrastructure. With IT support, customers can track sales and
inventory of their products in every area in Indonesia.

It also help us dispatch within 24 hours medicines, for
example, to hospitals, clinics or outlets that run out of stock.
In some areas, products can be delivered within four hours.
Customer satisfaction is our focus.

How many suppliers do you have?
About 70 suppliers, from small to big suppliers. We are
distributors for leading products such as L'Oreal, which is one
of the largest cosmetics producers, and other products such as
Sustagen and Morinaga. We got new suppliers in 2003, but in terms
of sales they are not too significant.

Of the number, 70 percent are international suppliers such as
Mead Jhonson and L'oreal. The remaining are locals. But local
suppliers dominate sales in terms of volume as their products are
market leaders, such as Extra Joss and Procold.

We offer an opportunity for potential local suppliers to
benefit from our infrastructure, which has helped make many
products successful.

Do you prefer certain suppliers to others?
Basically, we welcome any supplier, whether international or
local, to work together with us. But we prefer aggressive
suppliers who use our infrastructure to make their product more
successful. In short, we prefer suppliers who have commitment to
market their products in Indonesia.

Additionally, we distribute products that can improve the
quality of life.

Brand is also part of our consideration. But famous brands are
usually unable to expand to become more successful.

What is your outlook for 2004?
We anticipate business growth of between 15 to 20 percent in 2004
and net sales of Rp 4.5 trillion. It is a conservative projection
in anticipation of various events this year, including the
general election. Under these circumstances, business would
normally have the brakes on for a while, but the impact won't be
that significant because most of our products are prime ones.
These products are only used by people on the top level of
society who are relatively not vulnerable to any (social and
political) upheaval.