Indonesian Ice Cream Companies in Focus: Campina Ice Cream Industry
Indonesian ice cream producer Campina Ice Cream Industry targets to see a 10 percent year-on-year (y/y) increase in sales in 2018 supported by business expansion in the form of new products and rising ice cream consumption amid several big events that are staged in 2018. This year the company plans to launch up to six new ice cream products in an effort to lure consumers.
Adji Andjono, Marketing Director at Campina Ice Cream Industry, said the launch of new ice cream products will also "refresh" the Campina brand in the eyes of the consumer. This year the company plans also optimize the use of licenses it obtained from Nickelodeon and Walt Disney for the use certain cartoon characters (Ninja Turtles and Spongebob Squarepants) for several of the company's ice cream lines. Considering these ice cream products are likened by many children, the company has high hopes for new products with images or shapes of popular cartoon characters.
This year the company will also focus on expansion of its distribution and sales network, particularly outside the island of Java, in an effort to boost its market share in the ice cream market. Currently, Campina Ice Cream Industry is estimated to control about 20-25 percent of Indonesia's ice cream market. The company now has 30 distributors across the country but Andjono said it now targets to penetrate the smaller cities.
For its business expansion plans, Campina Ice Cream Industry allotted IDR 50 billion (approx. USD $3.8 million) to its 2018 capital expenditures (capex) budget, up around 10 percent compared to last year's budget. Part of capex will be used to replace its freezers.
Campina Ice Cream Industry, which was established in 1972, is also considering to build a new ice cream factory in West Java. Currently, the company has one factory, located in Surabaya (East Java) with an installed production capacity of 30 million liters of ice cream per year. It is also studying plans to renovate its existing factory in order to increase its capacity.
Andjono is convinced that sales of Campina Ice Cream Industry can pass beyond IDR 1 trillion (approx. USD $75 million) in 2018 as there are a couple of factors at play that should impact positively on the company's performance. Firstly, there is the plan to raise regional minimum wages in Indonesia by an average of 8.71 percent, hence boosting people's purchasing power across the Archipelago.
Secondly, there are several big events to be staged in Indonesia this year, most notably the local elections and the Asian Games. During these events (or in the case of elections: ahead of the event, namely during campaigning when many mass gatherings are held) people consume more food and drinks, including ice cream.
Financial Highlights Campina Ice Cream Industry:
| Per June 2016 |
Per June 2017 |
|
| Sales |
434.8 | 480.8 |
| Gross Profit | 256.5 | 285.2 |
| Net Income | 23.9 | 10.0 |
| Operational Income | 49.7 | 34.7 |
| Total Equity |
552.8² | 564.6 |
| Total Assets | 1,091.9² | 1,031.0 |
| Total Liabilities | 478.2² | 572.3 |
| Earnings per Share¹ | 119,45 | 49,91 |
in billion rupiah unless stated otherwise
¹ in IDR
² per December
Source: Kontan
Regarding the future, Andjono sees great growth potential for Campina Ice Cream Industry as well as for the entire ice cream industry because Indonesia has a huge population (around 260 million) that is young with the median age in the late 20s. Moreover, temperatures are high throughout the year in Indonesia and therefore ice cream companies in this tropical country are not affected by the changing of the seasons. Lastly, Indonesia's per capita ice cream consumption is still low at 0.8 liter per year.
Andjono also believes that ice cream consumption is increasingly becoming a part of young people's lifestyle in the urban regions of Indonesia. However, due to the attractive perspectives of Indonesia's ice cream market, there is a rising number of competitors. But with its strong fundamentals and variety in ice cream products, Andjono believes Campina Ice Cream Industry is well prepared to take on rivals. He added that the company wants to focus on the domestic market and therefore has no ambitions yet to engage in the exporting of its ice cream products.
After completing its initial public offering (IPO), Campina Ice Cream Industry made its trading debut on the Indonesia Stock Exchange on 19 December 2017, releasing 885 million new shares, equivalent to 15.04 percent of the company's total issued and paid-up capital, at a price of IDR 330 a piece. On Monday (22/01) the company's shares surged 9.59 percent to IDR 800 per share. Since its trading debut the company's shares have surged 142.4 percent. However, after touching a high at IDR 1,485 on 28 December 2017, the company's shares rapidly declined due to profit taking.
Stock Quote Campina Ice Cream Industry - CAMP: