PT Makro to expand Indonesian operations
PT Makro to expand Indonesian operations
JAKARTA (JP): Netherlands-based chain wholesaler PT Makro
Indonesia said on Monday it would expand its operations in the
country by opening more new outlets in various areas outside
Jakarta.
Company president Matthijs van der Lely said Makro would open
two outlets in Medan, North Sumatra, and Jakarta this year and
planned to open three outlets per year in the future.
"We're looking forward to opening new stores in prospective
areas such as Semarang, Bandung, Palembang, Batam, Makasar and
Balikpapan. We're now in intensive talks to acquire some land in
certain areas for our next outlets," he said.
He said the company expected to finalize the land deals
immediately so that it could start the construction of two new
stores this year.
He declined to reveal the amount of investment Makro had
allocated to finance its expansion plan, but said that it cost
about US$10 million to develop one outlet.
Makro Indonesia, which is 83 percent owned by the Dutch retail
chain operator SHV Holdings, started it operation in 1992 when
its first outlet opened in Pasar Rebo, East Jakarta.
Van der Lely said Makro's business was currently concentrated
in Jakarta, where it operated six outlets.
He said that outside Jakarta, Makro had three other stores,
located in Surabaya, Bandung and Bali.
Makro will open next week a newly built outlet in Medan, North
Sumatra, as well as an outlet in Ciputat, in southern Jakarta,
which was burned down during the 1998 riot. The Ciputat outlet is
scheduled to open on the week end.
He said retail market in Indonesia was expected to continue to
pick up after being depressed, especially during the political
crisis in 1997 and 1998 when mobs attacked and burned a
significant number of retail outlets.
He said several new foreign retailers planned to enter
Indonesia to take advantage of the predicted growth in the local
retail market.
Among the potential foreign retail chains soon to enter
Indonesia, he said, were British hypermarket chain Tesco and
Germany's diversified retail chain Metro International AG.
"Tesco, for example, is already operating in some Asian
countries like Malaysia and Thailand. It will eventually come
here as well," he said, adding that new foreign retailers would
likely come here through mergers and acquisitions.
Van der Lely also predicted that the existing foreign
hypermarket chains would further expand their operations here by
opening more new stores in the coming years.
He said in order to anticipate the influx of other giant
foreign retailers, Makro would move deeper into its targeted
market, the local smaller retailers.
The company's plan to expand to outer islands is also part of
the strategy to anticipate fiercer competition from foreign
wholesalers, he said.
He said Makro's plan of expansion would not necessarily
threaten major local retailers like Matahari and Hero.
"We are not their competitor," he said.
Major local retailers have been accusing foreign hypermarkets
of destroying small retailers and traditional markets by
developing their huge stores in the heart of the city and selling
their goods at cheaper prices.
Van der Lely said none of the local retailers' criticism was
leveled at Makro, since his company located its stores only in
suburban areas and sold its goods mostly to retailers and
corporate buyers. (cst)