Indonesian food and beverage producers are betting on lower energy costs and improved consumer purchasing power to help boost sales in 2016.
Sales next year are expected to grow by 8 percent to around Rp 1,350 trillion ($96.2 billion), according to Adhi Lukman, the chairman of the Indonesian Food and Beverage Association, or GAPMMI.
“This is the chance for the industry to boost its growth,” he said in Jakarta on Tuesday. “The higher costs in wages will be balanced out by lower [energy] costs.
“We hope the government will not issue other uncertain regulations,” he added.
The government in one of the seven policy reform packages issued this year to stimulate growth, set the price of natural gas from new fields at $7 per million British thermal units (mmbtu) for selected industries, lower than the current $9 per mmbtu average price.
“Lower electricity costs will help a lot,” Adhi said. “We hope prices will not rise too much, so that we can boost sales in keeping with the people’s purchasing power.”
He added that GAPMMI expected food and beverages price next year to rise by less than 5 percent next year, after an increase of 10 to 15 percent this year on higher fuel prices and a decline in the rupiah.
The local currency has lost 13 percent of its value against the US dollar so far this year.