Sariguna Primatirta (CLEO) Prepares Capex of IDR 300 Billion, for What Purposes?

CORPORATE STRATEGIC - JAKARTA. The bottled water producer, PT Sariguna Primatirta Tbk (CLEO), is implementing several strategies to achieve growth in CLEO's performance. In addition to strategies, CLEO is also preparing capital expenditure or capex of IDR 300 billion.

CEO of CLEO, Melisa Patricia Tanoko, revealed that this capital expenditure is allocated to expand CLEO's network throughout Indonesia by developing more factories, distribution networks, and adding new machines to enhance operational capabilities.

The plan is for the company to build three new water factories in Palu, Pontianak, and Pekanbaru to strengthen its performance in 2024. The construction of these factories is accompanied by the addition of fleets and distribution branches.

"In 2024, the company will add 3 factories so that the total number of factories will be 35 by the end of 2024. The company realizes that the key to growth in the bottled water industry is the availability of the product, so it strives to be closer to the community," Melisa told KONTAN, Monday (19/2).

Melisa explained that the construction of new factories this year is driven by financial performance during 2023, where from quarter to quarter, CLEO's sales and profits have increased throughout the year and generally the highest increase occurs during the holiday season, Ramadan month, and the end of the year.

"Therefore, it is not impossible that the momentum of Chinese New Year and Ramadan 2024 will also be a driver of growth for the Company. This is due to the many activities outside the home during this period, which makes CLEO ready to meet all the drinking water needs of the community with a variety of products offered," she continued.

As an illustration, the drinking water industry in Indonesia continues to grow every year, and she claims that CLEO always achieves growth far above its industry growth.

In 2024, CLEO projects it will be a challenging year but has great potential for bottled water. The beginning of this year is marked by elections, coinciding with the fasting month and Eid. However, CLEO views each year as a new opportunity and is able to adapt quickly, adjusting to the needs of the community in the market.

In addition to product expansion, CLEO also focuses on expanding market penetration. Currently, the majority of CLEO's market, as much as 80%, is in Java and Bali. The company is now starting to target cities outside these regions that have great potential.

She explained, the expansion of CLEO's factory outside Java and Bali provides strategic advantages by opening doors to markets that have not been fully tapped.

By expanding into new regions, the company can expand its geographical coverage, reach a wider consumer base, and increase resilience to regional market fluctuations. This directly supports the double-digit growth target set for the company's revenue and net income.

Expansion to areas outside Java and Bali also makes CLEO more responsive to local consumer preferences and needs. By entering markets that may have different dynamics and characteristics, the company can present products that are more in line with the desires of customers in each region.

"Overall, the expansion of CLEO's factory is an integral part of the company's sustainable and diversified growth strategy, positioning CLEO strongly to achieve ambitious financial targets, including consistent double-digit growth in sales," she said.

From a capacity standpoint, the current total national beverage capacity for bottled and non-bottled water in Indonesia is about 31 billion liters per year. Meanwhile, CLEO has about 5% market share with production of about 1.5 billion liters per year.

Therefore, the Company is always optimistic in targeting double-digit growth per year both in terms of sales and net income throughout 2024.