Indonesia Food & Beverages Industry Outlook

Tea and Coffee

Adhi S Lukman
Chairman of Indonesian Food and Beverage Industry Association

Member Gathering GAPMMI

12 May 2017

1
DEVELOPMENT OF FOOD INDUSTRY
Towards GVC
 Master Plan of National Industry Development
1. Fish & seafood (RIPIN) 2015 - 2035
processing industry
2. Refreshment industry
3. Vegetable oil
processing industry
4. Fruits and vegetables
processing industry
5. Flour industry
6. Cane-based sugar
industry

Upstream Agro
Industry
 GDP Growth in 2012 – 2016 (YoY %)
F&B Growth 8.2 % and Contribution 33% to GDP Non Oil Industry Sector
INDICATOR 2012 2013 2014 2015** 2016*** Target 2017
GDP Growth 6.03 5.56 5.02 4.79 5.02 5.1 – 5.4
GDP Growth Non Oil Industry 6,98 5,45 5,61 5.04 4.42 5.2 – 5.4
F&B Growth base on 2010 10,33 4,07 9,49 7.54 8.46 7.5 – 7.8 **Temporary
Contribution to GDP Non-Oil *** very
Industry Sector 29,52 29,01 29,74 30.86 32.84 temporary

Source : BPS , calculated

by Kemenperin
 Distribution of GDP Non Oil Industry Sector 2016 (%)
Industri Pengolahan Lainnya; Industri Furnitur, 1.42
Industri Mesin dan Jasa Reparasi dan Pemasangan
Industri Kulit, Barang dari Kulit
Perlengkapan , 1.78 Mesin dan Peralatan , 0.92
dan Alas Kaki , 1.56
Industri Karet, Barang dari
Karet dan Plastik, 3.51
Industri Kayu, Barang dari Kayu F&B Industry 32,84
dan Gabus dan Barang
Anyaman dari Bambu, Rotan
dan Sejenisnya , 3.55

Industri Logam Dasar , 3.96

Industri Barang Galian bukan

Logam, 3.94
Industri Kertas dan Barang dari
Kertas; Percetakan dan
Reproduksi Media Rekaman
3.95 Industri Barang Logam;
Komputer, Barang
Industri Pengolahan
Elektronik, Optik; dan
Tembakau, 5.19
Peralatan Listrik, 10.71
Textile & Garment
industry, 6.35 Chemical, Pharmacy &
Traditional herbs Industri Alat Angkutan,
5
industry, 9.86 10.47
 F&B Industry (Source: BPS)
Number of Establishment Source : BPS
2014 2015 Growth

Category Medium - Large Small & Micro Medium - Large Small & Micro Medium - Large Small & Micro

Food 5,794 1,198,491 5,438 1,567,019 (6.14) 30.75

Beverages 374 44,694 310 47,130 (17.11) 5.45

Total 6,168 1,243,185 5,748 1,614,149 (6.81) 29.84

% 0.49 99.51 0.35 99.65

Workers Engaged
2014 2015 Growth

Category Medium - Large Small & Micro Medium - Large Small & Micro Medium - Large Small & Micro

Food 877,771 2,324,212 719,116 3,664,208 (18.07) 57.65

Beverages 52681 81,027 46,379 85,167 (11.96) 5.11

Total 930,452 2,405,239 765,495 3,749,375 (17.73) 55.88

 Investment Performance: F&B Investment Realization

2012 2013 2014 2015 2016

INVESTMENT
P I P I P I P I P I
DDI 222 11,166.70 434 15,080.90 493 19,596.39 879 24,533.99 1,169 32,028.50
(Rp. Billions)

FDI 347 1,782.90 797 2,117.80 1,054 3,139.60 886 1,521.18 1,947 1,620.88
(USD million)

Total 569 1,231 1,547 1,765 3,116

Source: BKPM
 INDONESIA in the World Rank

Ease Of The Global Logistic Labor Global Food The Global

Doing Competitiv Performanc Productivit Security Innovation
Business eness Index e Index y per Index 2016 Index 2015
Index 2016 – 2016 worker GDP
2016 2017
63 0f 160 2012 71 of 113 97 of 141
# 91 of 190 41 of 138 (53 of 160) Countries Countries
(109 of 189) (37 of 140) Countries (76 of 113)
Countries Countries
#4 in #4 in #5 in #5 in
#6 in #4 in
5/3/2018 ASEAN ASEAN ASEAN ASEAN ASEAN 9
ASEAN
 Trade Balance of Semi processed & Processed Food in 2014-2017
In USD . Source: BPS/ Ministry of Trade

Indonesia – World – ASEAN - RCEP

Export Import Balanced
2014 2015 2016 2017 Feb 2014 2015 2016 2017 Feb 2014 2015 2016 2017 Feb
6,353,427,439 6,002,001,194 6,175,076,936 1,019,532,999 7,304,062,157 6,278,094,256 7,063,482,891 987,583,998 (950,634,718) (276,093,062) (888,405,955) 31,949,001

Export Import Balanced

Country
2014 2015 2016 2017 Feb 2014 2015 2016 2017 Feb 2014 2015 2016 2017 Feb
MALAYSIA 813,305,570 785,566,583 735,373,054 111,115,838 392,852,447 331,810,997 386,036,415 67,169,222 420,453,123 453,755,586 349,336,639 43,946,616

PHILIPPINE 456,899,018 468,351,572 558,369,049 95,768,459 29,956,751 25,143,725 29,910,789 4,976,027 426,942,267 443,207,847 528,458,260 90,792,432

SINGAPORE 309,196,623 268,166,469 284,769,913 50,897,919 215,983,590 186,202,973 184,752,446 28,006,415 93,213,033 81,963,496 100,017,467 22,891,504

VIETNAM 223,762,918 231,197,147 295,461,970 36,871,371 24,189,870 49,755,636 37,885,175 5,718,569 199,573,048 181,441,511 257,576,795 31,152,802

CAMBODIA 307,079,757 271,217,783 284,468,926 34,810,944 18,170 22,817 404,570 0 307,061,587 271,194,966 284,064,356 34,810,944

THAILAND 187,767,449 186,750,794 203,215,126 33,634,721 870,044,570 856,477,952 1,134,814,892 194,984,602 (682,277,121) (669,727,158) (931,599,766) (161,349,881)

BRUNEI
13,244,236 13,901,646 14,187,345 1,945,846 0 0 0 0 13,244,236 13,901,646 14,187,345 1,945,846
DARUSSALAM
MYANMAR 10,596,204 14,715,019 23,578,338 7,199,278 2,463,692 3,879,744 4,170,781 44,200 8,132,512 10,835,275 19,407,557 7,155,078

LAOS 123,094 152,381 184,638 22,905 50,617,818 741,902 54,885 54,720 (50,494,724) (589,521) 129,753 (31,815)

Sub TOTAL 2,321,974,869 2,240,019,394 2,399,608,359 372,267,281 1,586,126,908 1,454,035,746 1,778,029,953 300,953,755 735,847,961 785,983,648 621,578,406 71,313,526

JAPAN 250,862,770 226,707,352 228,669,665 32,927,255 19,085,240 19,799,056 20,473,454 2,780,002 231,777,530 206,908,296 208,196,211 30,147,253

PR of CHINA 284,715,924 311,181,650 329,658,422 50,004,818 711,277,907 560,982,575 742,865,199 110,512,697 (426,561,983) (249,800,925) (413,206,777) (60,507,879)

SOUTH KOREA 266,142,310 149,784,454 172,911,123 30,718,552 107,400,680 99,083,843 104,600,674 16,909,425 158,741,630 50,700,611 68,310,449 13,809,127

NEW ZEALAND 191,879,150 130,146,361 114,724,343 28,571,062 79,783,943 64,563,264 54,751,252 6,184,681 112,095,207 65,583,097 59,973,091 22,386,381

AUSTRALIA 156,792,692 171,938,542 153,012,001 27,850,184 534,128,428 511,516,419 525,902,863 70,537,151 (377,335,736) (339,577,877) (372,890,862) (42,686,967)

INDIA 73,159,685 80,753,824 89,522,243 12,149,147 177,847,853 90,199,505 80,040,579 16,514,921 (104,688,168) (9,445,681)
10
9,481,664 (4,365,774)

TOTAL 3,545,527,400 3,310,531,577 3,488,106,156 554,488,299 3,215,650,959 2,800,180,408 3,306,663,974 524,392,632 329,876,441 510,351,169 181,442,182 30,095,667
 Q1 2017 would be the bottom
Total Indonesia Market | 55 Categories
11.3 13.6 13.1 10.1 7.7
7.7 7.6 9.7 5.9
8.5
5.8 5.5 4.0 6.2
3.9 8.3 8.1 3.0 2.9 2.6
3.4 6.2 2.6 5.2 6.1 3.8 1.6 5.0 1.8 2.0 2.3
4.4 5.1 0.6
3.3 5.3 5.0 5.0 4.4 4.0 3.9 4.4 3.4 4.0 3.6 0.4 3.8
3.7 -0.8 3.9 -0.3
3.2 -0.2
2.8
Total Indonesia Modern Trade | 55 Categories
17.6
11.8 11.7 13.1
8.6 9.8 10.3
3.7 14.4 6.1 6.2 6.4 5.8 7.5 4.2 5.8 4.4 5.6
4.6 8.3 8.9 2.2 6.3 7.0 11.1 2.3 2.4 4.8 0.8 2.2 1.1
3.9 3.5 0.7
3.0 3.2 2.9 3.9 3.6 3.3 2.0 3.9 4.1 2.3 3.4 2.7 3.4 3.5 1.0 2.7 3.2
3.4 -1.6 2.5
14.0
11.0 11.0 Total Indonesia General Trade | 55 Categories
8.4 9.5 10.0 10.1
7.2 7.6
5.0 4.1 4.3 7.7 3.1 4.4 5.5 3.8 5.6 6.0 5.9 4.2 3.9 4.3
2.5 2.0 0.3 1.1 3.5 0.7
4.7 6.0 0.6
3.5 6.6 6.3 5.3 5.1 4.6 4.0 1.6 4.0 4.1 3.9 3.9 0.1 3.8 3.8 4.1 0.9
3.4 2.6
-0.1 -2.7 -2.0
2016 Q116 Q117 Jan'16 Feb'16 Mar'16 Apr'16 May'16Jun'16 Jul'16 Aug'16Sep'16 Oct'16 Nov'16Dec'16 Jan'17 Feb'17 Mar'17

2016 2017

Source: Nielsen Indonesia

Raw Material:
• Availability, continuity and
sustainability
• Quality, Time Delivery,
Price competitiveness
• Planning upstream –
downstream
• Regulations and
government policies must
support sustainable raw
materials and business
friendly
• Innovation is a must
Added Value Products:
• Market more open &
difficult to stop Global
Sourcing
• Competition is tougher
• Food Products must be
innovative with new
products to meet
consumer’s needs and
lifestyle
• Anticipation of rapid
changes in the global
market
Challenges Along the Food Supply Chain
Tariff
Quality
Food loss
Nutrition
Food
waste Healthier
Choice
Profitability
Competitiveness Standard
Limit
Label
Resources & Added
Innovation Regulation &
Value Govt Policy

Ethnic Logistic
& Time
Habits. delivery
 What industry need? Creating a Competitive Product

Natural
•Technology
•Innovation Resources
ADDED
•Consumer’s VALUE
preference PRODUCT,
•Marketing
SAFE , Halal
purpose
COMPETITIVE
Gov. Policy
& other
supporting

CONSUMERS
5/3/2018 14
 Thank you

5/3/2018 15