Indonesia’s food and beverage industry including biscuit industry is among the few industries that could well weather the difficult period in the wake of the global financial crisis toward the end of 2008 despite the increase in the prices of wheat flour and double refined sugar , the main basic materials for the industry. The crisis came when the industry was already hit by the difficulties brought about by the soaring oil prices in the world market.
The food and beverage industry has even helped sustain the country’s economy that managed to expand when most other economies suffered a setback and contraction. The survival of the industry is more significance as it is labor intensive.
The year 2008 was marked with the issue of melamine content found in Chinese milk products leading to ban by a number of countries in Asia on Chinese milk and biscuit products. In Malaysia, biscuit producer Khong Guan in Johor was asked to stop production 12 types of biscuit. Foods products including biscuit Soda, Lemon Puff, Pof, Butter Cream, Baby Fish, Health Cracker, Cocoa Puff, Sandwich Oren, Family Crackers, Bentuk Binatang, and Mini Puff produced by Khong Guan of Johor were found to have melamine content beyond the tolerable level. PT. Khong Guan Indonesia , however, announced that its biscuit products are free from melamine content as it has never used milk imported from China.
Buyers have turned to Indonesia as a result of the melamine issue in other countries in Asia. The country’s production of biscuits, therefore, increased 10% to meet growing demand including from other Asian countries and Europe. Meanwhile, the government has tightened control of food products and restricted imports from China to prevent the market form being flooded with products suspected of being contaminated by melamine.
The country’s exports of biscuits rose to 59,900 tons valued at US$ 99, million in 2008 from 50,600 tons in 2007. The country’s production of biscuits rose 8.8% to 248,100 tons from 228,000 tons in the previous year. The increase in production followed the growing demand in export market.
Biscuit market in the country is still dominated by foreign brands like Oreo, Tim Tam, Ritz, etc. Among the foreign producers include Mo-Mo-Gi, PT Amott’s Indonesia, PT Kraft Food Indonesia and PT Kino Sentra Industrindo. Local producers that manage to compete in the market include Khong Guan, Orang Tua Group (GOT), Siantar Top, GarudaFood, Mayora, Indofood, etc.
The foreign domination is stronger with the merger of world class producer and local producer like Arnott’s biscuit Co, Ltd with PT Helios Food, and Nabisco International and PT Roda Mas. The merger made the competition sharper between foreign and local producers such as Khong Guan Group, Mayora, Group Orang Tua, etc.
Acquisition has also taken place among world class producers. Danone of France was acquired by US Kraft Foods. The acquisition and mergers marked the sharp competition in the domestic and global markets as a result of growing number of producers. Acquisition has become a short cut to eliminate competitors and win the competition.
Production capacity growing
The country’s biscuit industry has almost fully utilized its production capacity despite the rising prices of basic materials.
The production capacity of the country’s biscuit industry has expanded from year to year from 296,074 tons in 2005, to 299,035 tons in 2006 and to 314,106 tons in 2008. The production capacity is expected to grow further in 2009 to 326,670 tons.
The ezpansion of the production capacity is partly caused by growing number of producers in addition to expansion by the existing producers. ...