Indofood to boost output to meet higher demand

JAKARTA (JP): Publicly listed food giant PT Indofood Sukses Makmur plans to raise its instant noodle production by 6.25 percent to 8.5 billion packs next year to meet an expected higher domestic and overseas demand.

Indofood's chief executive officer (CEO) Eva Riyanti Hutapea said on Friday that about 14 million packs of planned production would be exported.

"We plan to raise our production capacity to 8.5 billion packs of instant noodles annually next year. With the increase in production, we also plan to raise exports," she said after the ceremony in which the company received an ISO 9002 certification.

Eva said the increase in production capacity would come from Indofood's plants throughout the country, including from its biggest plant in Cibitung.

"Our plant in Cibitung owns 23 production lines, one of the biggest instant noodle plants in the world," she said.

She said exports had become an attractive alternative to Indofood following sluggish domestic demand since last year as a result of the economic crisis.

In the past three years, Indofood has exported instant noodles to the United States, Canada and European countries, such as the Netherlands, Germany, Greece, the United Kingdom, Malta and Russia.

The company also exported noodles to South Africa, Uzbekishtan, Kazakhtan and Middle East countries.

Exports to the Asia Pacific region have reached Taiwan, Hong Kong, Malaysia, Brunei, Singapore, Papua New Guinea, Australia and New Zealand, Eva said.

"Our plants were built in different places to suit our export destinations. For example, exports to Singapore, Malaysia and Brunei come from our plant in Pekanbaru, and our plant in Cibitung supplies the domestic demand," she said.

To reduce distribution risks and costs, Eva said, the company built processing plants in 11 provinces in Sumatra, Java, Kalimantan and Sulawesi.

Currently, some local instant noodle manufacturers are trying to emulate Indofood's distribution strategy by building plants in places closer to customers, she added.

Eva said Indofood would continue to improve the quality of its products to maintain its existence on the world market.

The Ministry of Industry and Trade has said that Indonesia should be able to export more instant noodles in the coming years following the government's approval for the operation of 13 new noodle companies next year.

Director General of Chemical, Agricultural and Forestry Products Gatot Ibnu Santosa said earlier this year that Indonesia could not export significant amounts of noodles due to the fast growth of domestic consumption in the past.

Indonesia, the world's second largest instant noodle producer after China, has 16 producers operating in 11 provinces, producing 8.6 billion packs or servings per annum with more than 50 brands. The giant PT Indofood Sukses Makmur dominates the market with more than 90 percent.

In Indonesia, instant noodles first hit the market in 1969 with the Supermi brand produced by PT Lima Satu Sankyu Industri Pangan. But instant noodles did not achieve wide popularity among people until the early 1980s when local flavor products were introduced.

Since then consumption has grown at the rate of about 10 percent per annum, reaching a high point in 1997 at about 8.7 billion packs before sinking to about 8 billion packs last year when the economic crisis affected the industry.

Indonesia's instant noodle consumption per capita stood at 39.1 packs last year, down from 42.3 packs in 1997. The figure is expected to recover slightly to 41.9 percent this year.

According to Indofood, popular flavors are onion chicken, special fried noodles, chicken soto and special chicken, followed by meatballs and chicken curry. (gis)