Indonesian government put a
target of economic growth at about 5.7-5.8 % (based on RAPBNP in 2015) in spite
of slower economic growth at the last two years. On other hand, government sets
inflation rate at 5.0 %, currency exchange rate at IDR 12,200 and oil price at
US 70 per barrel and income from tax at about
Rp 1,484 billion or up about 20 % than last year.
There are also increases in price
of important goods and services for Indonesian people include rice, soybean, transportation
and etc. As a result of that, consumption may decrease compared to last year.
Meanwhile higher interest rate in US which is predicted in 2015 will weaken
rupiah currency and as a result of that, inflation will increase as Indonesia’s
manufacturing sector still need material from oversea.
Accordance to Bloomberg, the fed
fund rate in about June 2007 was above 5 % and the Fed started to decrease its
rate in that time gradually. In near February of 2009 the Fed had set its rate
at almost zero percent. The Fed may increase its fund rate gradually until at 5
% once upon the economic condition is getting better and unemployment rate is
decline. According to Paul kruggman in the early April 2015, the inflation rate
in US is still low and that means the consumption is not growing significantly
yet.
Among of countries across the
world are afraid if the Fed will raise its fund rate to its rate in 2007 which
was about 5 %. It will strengthen dollar and weaken other currencies include
rupiah.
Infrastructure project: 5 % of
GDP
Government expects that its
infrastructure project master plan could drive the economic growth although
there are many obstacles to execute the project such its project financing.
State companies may take big portion in its various projects that is why
government has changed almost all directors and commissioners in state
companies and government started to issue its bonds in capital market both in
domestic and oversea such as Japan. The fund rising may be the key issue in its
project, some experts said that domestic bank is difficult to give loan for
infrastructure project as its size and long term financing although they have
state company for infrastructure financing, SMI.
According to Indonesia
infrastructure finance, Indonesia plans to increase its infrastructure project
from about 2 % GDP in to 5 % of GDP. The huge spending will be allocated in Sea
transportation (IDR 496 trillion), residential (IDR 384 trillion), roads (IDR
340 trillion) and water resources (IDR 275.5 trillion). The sectors which are related with those main
projects may increase significantly in next 5 years.
Second Most Optimistic consumers
Based on Guilaume de Gantes,
Partner of Mckinsey, Indonesian consumer is at the second of the most
optimistic consumer of the world after India in 2013. The consumer tends to be
family oriented, purchase good or service base on family’s advice or request,
Favors local brand and emotionally engaged to the product.
Due to higher inflation rate the
consumption may decline and if government intends to maintain consumption
government should make effort to decrease inflation rate.
Based on national statistic in
2013, the prepared food and beverage was the biggest portion of average monthly
spending per capita of commodity (food category). It was 26 percent of total
average monthly expenditure in 2013. Meanwhile for non food category, the
biggest portion was housing and household facility which was more than 40
percent of its total expenditure. For period of 2007 until 2012, the CAGR of
average monthly expenditure of education cost is the highest growth and the
second is tax and insurance cost.
That means consumer spends more
money for prepared food and beverage product than cereal product such rice or
grain in average.
Manufacturing industry in food,
refreshment, household may still have good potential to grow.
In conclusion, the government
tends to focus on its infrastructure project due to the lack of infrastructure
facilities in Indonesia and strong dollar weakened rupiah and because of that,
the economic growth may decline than last year. In 2008 – 2014 the consumption
section takes the highest part of gross domestic product and it could be a
slightly change in recent government. Self full filling in energy sector and
food sector will also make government reduce or stop import goods in those
sectors.
Company Analysis: Biggest skin care product in Asia
The company is owned by foreign
investment as its biggest share holder, Unilever Indonesia holding BV with 85 %
of total share. Commonly each brands of the company is the market leader in
each market in Indonesia. UNVR is one of
reputable company in Indonesia with strong performance; it was having two digit
growths in its revenue in the past 4 years. UNVR has been operating its
business in Indonesia for over 30 years and it acknowledges political and macro
economic situation Indonesia.
In 2014 the revenue was rising
12.2 % up compared revenue in 2013. The company could maintain its brand as the
market leader in the market. The famous brand for skin care such as ponds,
dove, Vaseline and etc are key drivers of its incremental sales in 2013. Skin
Care product is one of the main business cores of the company in Indonesia; the
company has established the biggest factory of skin care product in asia in
cikarang, west java.
The revenue in 2014 consists of
home and personal care product ( 71 %) and also food and refreshment product
(29%). Other top brands are buavita,wall’s,Zwitsal, rinso and etc. food and
refreshment product experienced double digit growth which was at about 19 %.
In 2014 the gross margin
decreased slightly from 51 % to 50 % due to higher cost of transportation and
higher price of imported raw material. The net profit margin also slightly
decline from about 17 % to about 16 % of total sales. Despite those ratios
slump slightly the activity ratios such as day receivable and day inventory had
been improved.
The company has strong internal
cash resources, it does not have any long term loan and it has good financial
leverage. Its free cash flow is also positive due to strong margin and
available internal source of fund.
In 2015 revenue growth may slow
down than 2014, there is a certain trend that incremental sales follows the
economic growth since 2011 as it can be seen at the table. The acceleration of
revenue tend to follow acceleration of GDP.
Opinion
I do not know the exactly
business operation of the company, the idea is very simple, how the company
could engage customers more?
Skin Care product
Each person has each physic
character include skin character. Among of the customers usually do not know
each type of skin character, dried skin or oiled skin
The company will provide product
based on its skin parameter such as humidity or something else.Firstly, the consumer will do
such a skin test for knowing which product is suitable for their skin. There
will be various parameters appear and the options of the suitable products for
their skin.The equipment for skin test will
be installed at big shopping center or etc.
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| source : BI and Bloomberg |
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| source : BI & Annual Report |
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| Source : Annual Report 2013 |
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| Source : Annual Report 2013 |
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| Source : Annual Report 2013 |
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| Source : BPS 2013 |
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| Source : Annual Report 2013 |
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| Source : Annual Report 2013 |
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| Source : Annual Report 2013 |
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| Source : Annual Report 2013 |
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| Source : Annual Report 2013 |
