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Indofood Group a giant in food industry.


The Indofood Group is the country's largest producer of manufactured food with main products including instant noodle, wheat flour, cooking oil, margarine and vegetable fats. In instant noodle and wheat flour industries Indofood is the largest in the world in capacity. With integrated facility, Indofood operates with high efficiency. Its production capacity for wheat flour and other food products is among the lowest in the world.

Indofood is a sub group of the Salim Group, once billed as the country's largest conglomerate. The 1997 crisis served a big blow to the Salim group but it manage to survive and regains part of its strength. The Indofood Group even has settled a big debt of US$ 1.2 billion.

The Sudono Salim Group, the owner of founder of the Salim Group is now in control of the Indofood Group after Anthony Salim took over as the president director of PT. Indofood Sukses Makmur (PT. ISM) replacing Eva Riyanti Hutapea in 2004.

In 2007, the Indofood Group sets aside Rp 1.6 trillion for capital expenditure including Rp 1.2 trillion for business expansion (Rp 480 billion for instant noodle capacity expansion, Rp 320 billion for oil palm plantations, and Rp 400 billion for other business units) and Rp 400 billion for maintenance.

Consolidated net sales of the Indofood Group rose 17.1% from Rp 18.7 billion in 2005 to Rp 21.9 billion in 2006. The increase in the net sales was attributable to larger sales in volume and price hikes recorded in three divisions--instant noodle, wheat flour and vegetable oil (cooking oil, margarine and shortenings).

By the end of 2007, the group hopes to complete the process of acquisition of 64.4% of a large oil palm plantation company PT PP London Sumatra Indonesia Tbk (Lonsum) in North Sumatra.

Information said the Salim Group has also taken control of consumer and distribution sectors in Asia through new investment and acquisition of consumer goods companies. Through Universal Integrated Corporation Consumer Products Pte Ltd., The Salim Group has acquired Food Empire Holdings in August 2006.

The Salim Group, through Fisrt Pacific Pte. Ltd acquired 6 consumer goods companies in 2004-2006. The companies included Zhongguo Jilong Limited, China Food Industries Limited, Junan Nengxing Food, and Shandong Xinquan. In the distribution sector the Salim Group acquired Tat Seng packaging Group.

China Food Industries Limited is an investment holding company based in China. Its subsidiaries operate in food and beverage industries and pig farming. The company ahs acquired Thye Seng Trading Co. Pte Ltd and Junan Hengxing Foodstuffs Co., Ltd. On May 25, China Food Industries Limited acquired Shandong Xinquan Grain & Oil Company Ltd, which operates in vegetable industry.

Zhongguo Jilong Limited is an investment holding operating in food and beverage industry base din China. Its products have been sold in China, Malaysia, Singapore and Taiwan. This company has 100 distributors and 300 supermarkets.

The business of the Salim Group in the consumer sector will grow after its subsidiary Ambica Jute Mills Limited (a subsidiary of the Kankarai Group) operates a noodle and milk factory in India occupying an area of 500 hectares in Howrah in that country. Earlier the Salim Group built a satellite city and a motorcycle plant with a total investment of US$ 580 million under the flagship of Kolkata West International Private Limited. In 2006, the consolidated income of the Salim Group from its consumer business was valued at US$ 3.3 billion with a net profit of US$ 239 million.

Food industry to become core business

PT. Indofood Sukses Makmur (ISM) operates in food industry and as an investment holding. Previously the company was named PT. Pangan Jaya Intikusuma established in 1990 by Soetojo Koerniawan and Mr. Herryjanto Setiadi.

In 1994, ISM was merged with 18 other companies operating in the same line of business producing instant noodle. They were Intipangan Persada, Karyapangan Intisejati, Panganjaya Abadi, Karina Saricipta, Citrapratama Sentosa, Ultrasari Wahana, Pandanwangi Nusantara, Asokacahaya Indah, Foodtech Utama International, Ciptaloka Bumisarana, Indofood Interna Corp, Lambang Insan Makmur, Kurumaya Citrarasa, Sarimi Aski Jaya, Anekapangan Dwitama, Sanmaru Foods Mfg, Multi Guna Agung and Indocipta Pangan Makmur.

In 1994, ISM became a public company listed on the Belgian Stock Exchange and Jakarta Stock Exchange. PT. ISM sold 20% of its share in the Belgian Stock Exchange valued at US$ 500 million and 2.75% valued at Rp 21 billion on the Jakarta Stock Exchange. After experiencing change in shareholders several times, in 206 the shareholders of ISM included CAB Holdings Limited, Mauritius (51.53%) and investing public 48.47%. CAB Holding Limited, Mauritius is based in Hong Kong owned by Anthony Salim.

Its main food product is instant noodle produced by PT. ISM and its subsidiaries PT. Nissin Mas, PT. Surya Pangan Indonesia and PT. Myojo Prima Lestari with a total annual capacity of 13 billion packs from 17 factories located in Jakarta, Bandung, Tangerang, Cibitung and Lampung. Three of the factories have been granted the quality certificate of ISO 9002.

Indofood produces instant noodle in a number of brands including Indomie, Sarimi. Supermie, Sakura, Pop Mie, Super Cup, Anak Mas, 3 Ayam, Pop Bihun and Pazto. Its instant noodle with the brand of Indomie is quite popular in the country and it has been exported to 35 countries. Its instant noodle division contributed 33.3% to the sales earning of the Indofood Group in 2006.

In 2006, its instant noodle production was sold in 11.28 billion packs valued at Rp 7.33 trillion. Its share of the instant noodle market fell to 77% from 80% earlier after the appearance of other products especially Mie Sedaap, its closest competitor in the market.

PT. Indosentra Pelangi produces food seasoning with a production capacity of 58.3 million liters of ketchup and 10 million liters of chili and tomato sauce, 855 tons of instant spices and 1.425 tons of powder condiment per year.

Since 1999, the Indofood Group has sold 34 food seasoning products with the brands of Kecap Manis Indofood, Saus Sambal and Saus Tomat Indofood. The company has a 36% share of the domestic market for food seasoning. It has exported food seasoning to countries like Japan, Hong Kong and Middle East.

PT. Indofood Frito-Lay has 2 factories with a total production capacity of 17,690 tons of snack per year. Its products of snack is sold with the brands of Chiki, Chitato, Cheetos, Jetz, Tenny, Lays and Tradia.

PT. Ubindo Aneka Sarana and PT. Prima Aneka Berjaya produces biscuit with a total capacity of 5,000 tons per year. Its biscuits are sold with the brands of Canasta, Dueto, Trenz, and Indofood Biscuit and part of which have been exported such as to Britain, South East Asia and South Africa.

PT. Gizindo Prima Nusantara produces baby food in the form of baby instant porridge and baby biscuit. This company has an annual production capacity of 11,940 tons.

In 2000, the company cooperated with the government under the in the program of UNICEF providing food for babies of poor families. This company has received appreciation of HACCP system from SGS International for international food quality standard. Baby food produced by the Indofood Group is known with the brand of SUN for middle to low income brackets of the people and PROMINA for higher income people.

Dominating wheat flour market by 66.4%

Bogasari Flour Mills (BFM) is producer of wheat flour. In 1994, Bogasari was merged into PT. ISM and it became a division of the Indofood group. Before the merger, Bogasari Flour Mills was acquired by PT. Indocement Tunggal Perkasa in 1992.

Later PT.ISM split Bogasari Flour Mills into four subsidiaries--PT. Bogasari Sentra Flour Mills and PT. Intisari Flour Mills which operate in flour milling and PT. Inti Abadi Kemasindo in packaging and PT. Indobahtera Era Sejahtera in cargo shipping.

The Indofood Group produces various types of wheat flour in more than 20 brands including Segitiga Biru/Gunung Bromo, Lencana Merah/Semar and Cakra Kembar/Kereta Kencana. . Its wheat flour factories are located in Jakarta and Semarang with a total capacity of 3.57 million tons of flour and 60,000 tons of paste.

The Indofood Group exports wheat flour to various countries such as Singapore, Brunei, Malaysia, Thailand and Timor Leste with the brands of Triangle and Taj Mahal. The wheat flour division contributes 33% to the income of the Indofood Group. In 2006, wheat flour sales of the group totaled 2.6 million tons valued at Rp 9 trillion.

CPO Industry

The cooking oil, margarine and shortening division has three main lines of business i.e oil palm plantation, trade and processing industry.

In 1997, the Indofood Group consolidated its business in agribusiness through internal acquisition. ISM acquired four agribusiness companies previously under the Salim Group.

PT. Salim Ivomas Pratama (SIP) operates oil palm plantations in Riau and has 6 units of palm oil processing plants.

Currently the Indofood Group has 240,000 hectares of oil palm plantations including 16,000 hectares acquired in March, 2007. Around 65,552 hectares of the plantation have been cultivated. In 2005 the plantation division of SIP produced 297,000 tons of CPO.

In 2006, PT. SIP acquired 60% stake worth Rp 125 billion of Rascal Holdings Limited in three companies--PT Mentari Subur Abadi, PT Swadaya Bhakti Negaramas, and PT Mega Citra Perdana. The three have 85,500 hectares of oil palm plantations in South Sumatra, East Kalimantan and Central Kalimantan.

ISP targets to have 250,000 hectares of oil palm plantation in 2015 and produce 1 million tons of CPO a year. The Indofood Group has been able only to meet 50% of its CPO requirement to produce cooking oil. In 2010, it hopes to be able to meet its entire requirement. The group also plans to expand operation to biodiesel industry through PT SIP, after its oil palm plantations have been able to meet its CPO requirement to feed its cooking oil industry. PT SIP will start planting in 2007 over 20,000 hectares of oil palm plantations.

Indofood Agri Resources Ltd (Indo Agri), which raised Rp 2.4 trillion in fresh fund through rights issue in the Singapore Stock Exchange in February 2007, acquired 64.4% of PT PP London Sumatra Indonesia Tbk (Lonsum) at a price of Rp 5.7 trillion. The process of acquisition is to be completed by the end of 2007. Lonsum has 387,000 hectares of oil palm plantations in North Sumatra and 160,000 hectares of which have been cultivated.

PT. Intiboga Sejahtera is a producer of cooking oil, margarine and fats with a total production capacity of 651,000 tons of CPO based cooking oil and 226,200 tons margarine & shortenings a year.

PT. Bitung Manado Oil Ltd and PT. Argha Giri Perkasa (PT. AGP) in Manado, North Sulawesi operate in copra extraction and coconut oil processing industry with a capacity of 300,000 tons of copra a year. The brands for its cooking oil Bimoli, Bimoli Special, Bimoli Crispy, Sunrise, Delima, Borneo and Mahakam. The brands for its margarine and shortenings are Simas, Simas Special, Amanda, Palmia, Delima and Amanda.

In 2006, the CPO and cooking oil division of the company posted an income of Rp 1.30 trillion contributing 4.5% to the income of the group. In July, 2007, Intiboga Sejahtera, Bitung Menado Oil Industry, Sawitra Oil Grains, Pratiwimba Utama, and Gentala Artamas were merged for efficiency with PT SIP as the surviving company.

Distribution Business

Distribution of 60% of the products of the Indofood group is handled by its distribution division which is made up of a number of subsidiaries.

The distribution division of Indofood Group consist of PT. Indomarco Adi Prima, PT. Tristara Makmur, PT. Intra Nusa Citra, PT. Putri Daya Usahatama, PT. Cereko Reksa Corporation and PT. Cemako Mandiri Corporation (for instant noodle, snack, biscuit and baby food), PT. Salim Oil Grains (for cooking oil, margarine).

The distribution division posted an income of Rp 3.13 trillion in 2006 or 14.3% of the group income.


The Indofood Group dominated the country's food processing industry through PT. ISM, which has a 77% share of the market of instant noodle in the country. The market share fell from 80% four years earlier. Part of the loss in market share was taken over by the Wingfood Group with its Mie Sedaap. In a bid to recover the loss in market share Indofood has spent Rp 480 billion to finance capacity expansion to 14.5 million packs of instant noodle from 13.5 billion pack earlier.

The Indofood Group also plans to strengthen its business in the sector of CPO, cooking oil and biodiesel. Indofood targets to expand its oil palm plantations to 250,000 hectares and produce 1 million tons of CPO in 2015. Currently its oil palm plantations totaled 240,000 hectares with CPO production around 700,000 tons a year.

Since 2006, Indofood has acquired a number of oil palm plantation companies including PT. PP Lonsum with 168,000 hectares of oil palm plantations in North Sumatra and Rascal Holdings Limited, which has 85,000 hectares of oil palm plantation in South Sumatra, East Kalimantan and Central Kalimantan.

Consumer industry and distribution networks of Indofood in Indonesia are indirectly affiliated to the Salim Group (holding group of Indofood). The Salim Group has stake consumer and distribution business China and a noodle factory in India through the Kankarai Group.

Parent company PT. Indofood Sukses Makmur Tbk

Address Ariobimo Sentral Building, 10th
 Floor Jl. HR. Rasuna Said X-2
 Kav. 5 Kuningan South Jakarta

Phone(s) (021) 5228822

Fax. No. (021) 5226094

Number of subsidiaries 29 companies

Chief commissioner Manuel V. Pangilinan

Commissioners Benny Setiawan Santoso
 Edward A. Tortorici
 Ibrahim Risjad
 Graham L. Pickles
 Robert Charles Nicholson

Independent commissioners Utomo Josodirjo
 Torstein Stephansen
 Wahjudi Prakarsa
 Juan Bernal Santos

President Director Anthoni Salim

Vice President Cesar M. dela Cruz
 Franciscus Welirang
 Darmawan Sarsito

Directors Aswan Tukiaty
 Taufik Wiraatmadja
 Philip S Purnama
 Mulyawan Chandra
 Thomas Tjie
 Homggo Widjojo Kangmasto

 Divisions of Indofood Group

Instant noodle Div.: Indofood Sukses Makmur Tbk, PT

Wheat flour Div.: Bogasari International Pte. Ltd.
 Bogasari Sentral Flour Mill
 Intisari Flour Mill, PT

Cooking Oil, Margarine: -

Oil palm plantation: Salim Ivomas Pratama, PT
 Indriplant, PT
 Gunung Mas Raya, PT
 Serikat Putra, PT
 Cibaliung Tunggal Plantation, PT
 Indofood Agri Resources Pte Ltd

Trading: Sawitra Oil Grain, PT
 Putri Daya Usahatam
 Prima Intipangan Sejati, PT
 Intranusa Citra, PT
 Tristara Makmur, PT
 Manggala Batama Perdana, PT

Other processed food products Indofood Fritolay Makmur, PT
& Distribution :
 Gizindo Primanusantara, PT
 Arthanugraha Mandiri, PT
 Indomarco Adi Prima, PT
 Inti Abadi Kemasindo, PT
 Cipta Kemas Abadi, PT
 Indoagri Inti Plantation, PT
 Indobahtera Era Abadi, PT
 Purply Holding BV
 Indofood International Finance Ltd
 Witty East Holding Co. Ltd.
 Indosentra Pelangi, PT

Financial Highlights
PT. Indofood Sukses Makmur Tbk

 (in Rp billion)
Description 2005 2006
 (31st Dec.) (30th Sep.)

a. Current Assets 6,471 7,457
b. Non Current Assets 8,314 8,655
Total Assets 14,786 16,112

a. Current Liabilities 4,413 6,273
b. Non Current Liability 5,636 4,247
c. Equity 4,737 5,592
Total Liabilities + Equity 14,786 16,112

a. Total Revenue 18,765 21,942
b. Net Profit 124 661

Source: PT. Indofood Sukses Makmur
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Title Annotation:COMPANY PROFILE
Comment:Indofood Group a giant in food industry.(COMPANY PROFILE)
Publication:Indonesian Commercial Newsletter
Article Type:Sound recording review
Geographic Code:9INDO
Date:Jul 1, 2007
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