Mayora eyes more than 10% sales growth

JAKARTA. Publicly listed food giant Mayora Indah (MYOR) expects to expand its sales by more than 10 percent this year as it is optimistic about Indonesia’s positive prospects in the fast-moving consumer goods (FMCG) sector.

The sales growth target set by the company, popularly known as the Mayora Group, is above the country’s FMCG industry growth prediction as it saw a positive performance last year, according to its executive.

Mayora Indah global marketing director Ricky Afrianto Gunadi said the company was convinced that it could achieve its goal, even though a recent Nielsen survey showed that Indonesia’s FMCG sector growth was predicted to go through a tough period in the first quarter of this year.

“We are aiming for at least 7 percent sales growth or above the government’s economic growth target of 5.7 percent, while also hoping to grow double digits or above 10 percent,” Ricky told The Jakarta Post on Tuesday.

The group’s financial report reveals that it posted an 18 percent increase in sales to Rp 14.2 trillion (US$1.09 billion) last year. A number of Mayora’s products are popular in Indonesia, such as Kopiko candy, Energen cereal drinks and Torabika instant coffee.

Despite being an attractive industry, Indonesia’s FMCG is facing tight competition as local and multinational manufacturers often launch dozens of new brands almost every day, according to Ricky.

However, Ricky said the Mayora Group had an advantage amid the competition since it is an export-oriented company, with more than 30 percent of its sales abroad. Ricky referred the export-oriented condition as “when half of the group’s marketing job has been done.”

Ricky said the group currently had 28 brands in eight product categories — wafers, chocolates, biscuits, candy, instant food, coffee, cereal and beverages — exported to more than 80 countries, 20 of which have been penetrated by its coffee brands.

“In some countries, our presence is quite huge as we manage to beat multinational companies, such as in the Philippines and China where our instant coffee brand Kopiko is popular, while Lebanon and Russia prefer Torabika Cappucino,” Ricky said.

Despite an increase in sales, the Mayora Group suffered a decline of more than half its net profits last year to Rp 404 billion because of rising costs, especially in its operating expenses and foreign-exchange losses.

The group saw a 27 percent increase to Rp 11.6 trillion in the cost of goods last year. Meanwhile, its foreign-exchange loss was recorded at Rp 18.5 billion last year, down from a Rp 308 billion gain a year earlier.

In an effort to reach its goal this year, the group is expecting a sales boost from its coffee division,
Torabika Eka Semesta, which was Indonesia’s first producer of instant coffee in sachet packaging, with several popular variants such as Torabika Duo, Torabika Kopi Susu and Torabika Cappuccino.

“Currently, Torabika contributes more than 20 percent, or above Rp 2 trillion, to Mayora’s total sales,” said Noegroho Moeshartanto, Torabika’s marketing manager.

In order to snatch opportunities amid tight competition, Noegroho said the company has launched a new instant coffee brand, called Torabika Creamy Latte, which was expected to attract young coffee drinkers in Indonesia, where Southeast Asia’s largest middle class population is growing.

“The new brand offers a differentiation in the feature of a separate, yet attached sugar container on the sachet, along with a new flavor favored by young coffee drinkers. Those are Indonesia’s first innovations in an instant coffee product,” Noegroho said.

As one of the world’s coffee producers, Indonesia is expected to see a 33 percent surge in coffee demand to 400,000 tons by 2016 from 300,000 tons estimated last year, in line with a coffee consumption per capita that will surge to 1.54 kilograms from 1.19 kilograms, according to the Indonesian Coffee Association (AEKI). (Grace D. Amianti)