Hero to open 36 outlets next year

Hero to open 36 outlets next year

Anissa S. Febrina, The Jakarta Post/Jakarta

Consumer spending continues to drive the Indonesian economy and
retailers are positioning themselves to take advantage of the
situation.

Despite fears that people's purchasing power could begin to
decline amid high inflation and interest rates, retailer PT Hero
Supermarket is so confident in the market that it plans to open
36 new outlets next year.

Among the 36 planned outlets are six new hypermarkets under
the Giant name and 10 Hero supermarkets.

According to a study by AC Nielsen, the country's retailers
shared a profit of about Rp 660 billion (about US$66 million)
last year.

"We are still focusing mainly on Java because the market here
is still open," Hero corporate secretary Vivien Goh said on
Thursday.

Hero president director Ipung Kurnia said the expansion would
require about Rp 260 billion in capital expenditures, half of
which would come from bank loans, with the rest coming from the
company's internal reserves.

In addition to opening new hypermarkets and supermarkets, the
company, established in 1971, will also open 20 additional
Starmart minimarkets.

The company reported that in the first nine months of 2005,
sales grew by 13.6 percent to Rp 3 trillion, compared to Rp 2.6
trillion in the same period last year.

PT Hero currently has a total of 260 outlets across the
country.

Aside from its major expansion plan, the company has also
reportedly accepted a tender offer from Pan-Asian retail group
Dairy Farm, through its subsidiary Nalacca BV.

The tender offer resulted in a change in Hero's ownership
composition.

PT Hero Pusaka Sejati now owns 50.10 percent of the company's
shares, while the Mulgrave Corporation BV -- another subsidiary
of Dairy Farm -- holds 12.23 percent, Nallaca BV holds 32.31
percent and retail investors the remaining 5.36 percent.