investment opportunities in food and beverage industry

INVESTMENT OPPORTUNITIES IN FOOD AND
BEVERAGE INDUSTRY
Asia – Africa Summit 2015, Jakarta Indonesia
Jakarta Convention Center
INTRODUCTION
FACTS:
 Strategic geographic location
and strong global presence
 Abundance
of
natural
resources
 Total land area Indonesia is
around 1.910.931 km² and sea
area is around 3.544.744 km²
 Estimated
250
millions
populations,
with
socio
economic level :12% high, 40%
medium, 48% low class
 GDP US$ 3.531,45/capita
 Dynamic
and
youthful
population (55% < 25 years old)
 Average expenditure for food
per capita 51.08%, in which
12.72% is contributed by
processed food
6,435 Km (3 time zone)
2
POTENTIAL RESOURCES
 Indonesia has the potential of natural resources that comes from
agriculture, fishery / marine, livestock, crops and forestry , which can
be exploited by the food industry. Some of these natural resources,
include :
Palm Oil Pepper Cacao Seaweed (30 Million ton)
(88 thousand ton)
(0,45 Million ton)
(0,25 Million ton)
No.1 in World
No.3 in World No.3 in World
No.1 in World
Coconut
Coffee
Fish & Shrimp
Tea
(3,3 Million Ton)
(0,692 MillionTon)
(10,5 Million Ton)
(0,136 Million Ton) No. 1 in World
No. 3 in World
No. 2 in World
No.5 in World
3
CONTRIBUTION OF FOOD, BEVERAGE AND TOBACCO INDUSTRY IN THE NON
OIL AND GAS GDP IN 2013 AND 2014
B. KONTRIBUSI SEKTOR INDUSTRI MAKANAN,
Textile , Leather 2013
2014
Textile , Leather Goods and Goods and MINUMAN
DAN
TEMBAKAU
TERHADAP
PDB
Footwear, 2%
Footwear, 7%
Wood and Forest INDUSTRI NON
MIGAS
Wood and Forest Product , 4%
Others , Rubber, Rubber Goods and Plastics , 5%
Chemical, Pharmacy and Traditional Medicine, 9%
Others , 1%
Product , 4%
1%
Paper and Printing, 4%
Food and Beverage , 29%
Metal and Electrical Equipment, 11%
Food and Beverage , 30%
Paper and Printing, 4%
Rubber, Rubber Goods and Plastics , 4%
Metal and Electrical Equipment, 10%
Chemical, Pharmacy and Traditional Medicine, 10%
Tobacco, 5%
Non‐Metallic Minerals , 4%
Tobacco, 5%
Non‐Metallic Minerals , 4%
Machinery , 2%
Machinery , 2%
GROWTH of NATIONAL GDP, GDP OF NON ‐ OIL AND GAS INDUSTRY AND GDP OF FOOD AND BEVERAGE INDUSTRY
12%
%
10%
8%
6%
4%
2%
0%
2011
2012
2013
2014
National GDP
6.17%
6.03%
5.58%
5.02%
GDP of Non ‐ Oil and Gas
7.46%
6.98%
5.45%
5.61%
GDP of Food and Beverage Industry
10.98%
10.33%
4.07%
9.54%
Year
4
FOOD AND BEVERAGE INDUSTRY
INDICATOR
Growth (%) base 2010
2011
2012
2013*
2014**
10,98
10,33
4,07
9,54
29,52 Export Value (US$ Billion)
28,90
4,51
4,65
29,01 5,38
29,77 5.51
Import Value (US$ Billion)
6,85
6,16
5,80
5,76
Investment
• Domestic Investment (IDR trillion)
• Foreign Investment (US$ Billion)
7,94
1,1
11,16
1,78
15,08
2,12
19,59
3,14
66
68
72 71
742.195
884.602 832.411 780.220
Contribution of GDP Non ‐ Oil and Gas Industry (%)
Utilities (%)
Workforce (People)
5
STRATEGIC ISSUES
1.
2.
3.
4.
5.
6.
Need further development of F&B industry to fulfill low consumption beverages
product :
 milk 12.85 lt/cap/y (Ina), 50.9 (Mal), 140 (Swiss)
 cocoa 0.2 kg/cap/y (Ina), 0.27 (Mal), 8.1 (Swiss)
Need to narrowing gap between import and domestic production, such as :
sugar, meat and salt.
Developing infrastructure to fullfill food safety and quality that refer to Indonesia
National Standard (SNI), Good Manufacturing Practices (GMP), Hazard
Analysis Critical Control Point (HACCP) and ISO 22000, such as laboratory,
certification body, etc.
Creating downstream product with a higher value added by further processing
agricultural commodities.
Developing food ingredient industry to fulfill domestic requirement
Improving the productivity of human resources and research & development of
food and beverage industry.
6
INVESTMENT INCENTIVES
1. Tax Holiday; based on Ministry of Finance Decree Number 130/2011 (Peraturan Menteri
Keuangan Nomor 130 Tahun 2011) and the procedure for application Guidance by Ministry of
Industry Decree Number 93/2011 (Peraturan Menteri Perindustrian Nomor 93 Tahun 2011). The
Cocoa processing Industry is categorized as renewable resources manufacturing industry that
entitled to obtain Tax Holiday Incentives.
2. Tax Allowance: based on Government Decree Number 52/2011 (Peraturan Pemerintah Nomor 52
Tahun 2011) which covers on certain product and industry field only in certain provinces (preferred
to North Sumatera, Riau, and West, Central, and East Kalimantan) in form of:
– 30% (thirty percent) net tax deduction of the total investment charged for 6 (six) years for 5%
(five percent) annually
– Accelerated amortization & depreciation
– Income tax charged to overseas tax-payer on dividend with the
according to the Double Taxation Avoidance Agreement
rate of 10% or lower,
– Carry forward of losses for longer period but no longer than 10 years
3. Tariff Exemption based on Minister of Finance Decree Number 176/2009 (Peraturan Menteri
Keuangan Nomor 179 Tahun 2009) for Capital Goods Importation with the conditions:
– Capital Goods which have not been developed in domestic area
– Sophisticated Machineries with high license-technology content.
– Tariff Exemption valid only for the first 2 (two) years on investment.
7
REMARKS
1. The growth of food and beverage industry, mainly product
of "consumer goods“, is predicted to remain stable and
always contributes to the biggest share of non oil and gas
GDP. It is supported by vigorous domestic demand from the
increasing number of middle-class consumers in Indonesia.
2. Huge domestic market will pose a challenge of the entry of
similar products from other countries. Therefore,
Government along with private sectors should undertake
serious efforts to enhance industry competitiveness, such
as infrastructure, labor competency and productivity,
investment climate and technology, as well as bureaucracy.
8