To tap growing demand for soft drinks in Indonesia, PT Asahi Indofood Beverage Makmur (AIBM), a joint venture between Indonesia’s PT Indofood CBP Sukses Makmur (ICBP) and Japan-based Asahi Group Holdings Southeast Asia Pte. Ltd. (Asahi), has opened a plant in Sukabumi, West Java.
Axton Salim, a director of ICBP, said the new plant, with total investment of Rp 700 billion (US$54.3 million), was expected to produce 100 million liters per year. It occupies a 59,000 square-meter compound in the Cicurug industrial area.
Axton attributed the new plant to the country’s lucrative beverage industry, which could reach Rp 100 trillion a year. The new plant will produce bottled tea Ichi Ocha and bottled coffee Cafela as its flagship products.
“The [beverage] market continues to grow with regard to the growth in income per capita and middle-income segments,” said Axton.
Meanwhile, Asahi Group CEO Naoki Izumiya added that AIBM, aiming to earn ¥700 million (US$5.82 million) in 2017, had two other packaged beverages in the pipeline.
Izumiya added that his company was currently outlining strategies to further strengthen its grip on the market, including by launching a low-sugar and low-calorie beverage marketed toward women.
“Some women like sweet drinks but don’t want to gain weight,” he said, citing that the product is produced and widely consumed in Japan.
In addition to the newly produced Ichi Ocha and Cafela, the firm also produces Pepsi soft drink and bottled mineral water Club.
AIBM, aiming to expand its product portfolio in the non-alcoholic beverage market, has made several investments in the past three years, including acquiring PT Pepsi-Cola Indobeverages in September 2013, in partnership with another joint venture, PT Indofood Asahi Sukses Beverage (IASB).
AIBM and IASB, which both are business projects of ICBP and Asahi, engage in non-alcoholic beverage production and marketing and distribution.
ICBP has a vast network in the domestic market with its well-known food products, including instant noodles, dairy products, snacks, food seasonings and nutrition and special food. Meanwhile, Asahi, which was first established as a beer company 126 year ago, produces non-alcoholic beverages, alcoholic beverages, and packaged food, and runs its business in over than 80 countries.
Last month, the Indonesian Food and Beverage Association (GAPMMI) scaled back its forecast for this year to 6 percent, down from an earlier growth forecast of 8 percent, citing many corroborating factors hampering the industry, such as fuel-subsidy cuts, sluggish exports, weakening purchasing power amid low commodity prices and a weak rupiah.
Last year, turnover in Indonesia’s food and beverage industry was Rp 1.0 quadrillion, up from Rp 940 billion in 2013.