PT Indofood Sukses Makmur Tbk (INDF),the integrated food manufacturers and soft drink, is expanding in the upstream and downstream sectors, by exploring into potato seeding, and add four instant noodle factories.
Indofood is expanding in potato seeding with PT East West Seed Indonesia. The cooperation includes research, development, production, and marketing of hybrid potatoes seeds. In the first stage, Indofood and East Weed will invest US$ 10 million.
“The US$ 10 million investment is only the beginning; it will be greater with more variety of seeds being developed,” said Anthony Salim, the President Director of Indofood.
The company and East Weed is targeting that their potato seeds will help to increase farmers productivity up to 25 tons per hectare, or double from the current average productivity that are only 10-15 tons per hectare.
Related to the expansion in the production segment of instant noodles, Anthony stated that Indofood plans to build three to four new plants this year. But it does not rule out the possibility of the plants will be used for another Indofood’s business segments.
Anthony claimed that the construction of a factory in Cirebon alone will cost US$ 300-400 billion for the three lines. So for all four new plants, Indofood requires a minimum fund of Rp 1.6 trillion.
On the other hand, Anthony added Indofood gearing ratio is still low and will be managed at low levels. Because of the funding will be prioritized capital expenditure from internal. “We want to have a conservative balance sheet when the condition of the world is uncertain. So it is better reinforced internally first, “he said. (*)
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