Indofood Reports 10 Percent Growth in Net Sales Due to Domestic Consumption
Indofood Sukses Makmur (Indofood), Indonesia's largest food processing company and the world's largest producer of instant noodles, posted net sales of IDR 50.06 trillion (US $5.1 billion) over 2012, a 10.4 percent increase compared to 2011. Its Consumer Branded Products Group (CBP) continued to be the largest contributor to its net sales, contributing around 43 percent, followed by Bogasari (25 percent), Agribusiness (24 percent) and Distribution (8 percent).
Pefindo, Indonesia's credit rating agency, affirmed the idAA+ rating for Indofood as well as for its Bond V/2009 and Bond VI/2012, meaning that the outlook for Indofood's corporate rating is stable. According to Pefindo, Indofood's "superior market position in packaged food industry, its well diversified business portfolio and vertically-integrated business operations, as well as its strong cash flow protection" were reasons for the upgrade. Tight competition in the industry, however, constraints the rating.
In early March, it was announced that Indofood increased its stake in China Minzhong Food Corporation Limited (CMFC) from 14.95 to 29.33 percent of CMFC’s total issued share capital. It indicates that Indofood is looking beyond Indonesia for corporate expansion.
This year, Indofood has allocated IDR 7.6 trillion (US $779 million) for capital expenditure.
Indofood's shares have gained 28.45 percent this year due to investor confidence in the company as well as in Indonesia's domestic consumption brought on by the country's economic growth.
The company, which has operations in all stages of Indonesia's food manufacturing process, forms part of the Salim Group, Indonesia's biggest conglomerate, founded by Sudono Salim.