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JAKARTA (TheInsiderStories) – Indonesia’s food & beverages producer, PT Indofood CBP Sukses Makmur Tbk (IDX: ICBP) announced that Japan’s Asahi Group Holdings Ltd it plans to divest its interest in a beverage joint venture to refocus on its core alcohol business. Indofood said has agreed to acquire 49 percent of Asahi’s unit shares Asahi Group Holdings Southeast Asia Pte Ltd (Asahi Singapore) on Oct. 2.

A unit of Salim Group said in announcement at Indonesia Stock Exchange on Monday (3/10), Asahi Singapore has agreed to divest all its stake in PT Asahi Indofood Beverage Makmur (AIBM) and PT Indofood Asahi Sukses Beverages (IASB), a joint venture between two companies. Currently, Indofood have 49 percent in AIBM and 51 percent in IASB.

It said, the terms remain to be negotiated. Currently, the combined worth of the two companies is 2.5 trillion rupiah (US$185 million).

“The Company is considering accepting the transaction plan as we believe the prospects of non-alcoholic beverage business in Indonesia in the future remain promising as the growing middle-income segment and the increase in income per capita,” said Gideon Saputro, Corporate Secretary of ICBP.

Recently, ICBP conducted a stock split of shares from the old nominal of Rp100 to the new nominal of Rp50. With the par value split, the number of shares of the company to 11,661,908,000 shares from the previous 5,830,954,000 shares.

President Director and CEO of PT Indofood Sukses Makmur Tbk (IDX: INDF) as the holding company of ICBP Anthoni Salim once said that intend to penetrate the European market after establishing Indomie factory in Turkey since 2014.

“Turkey is expanding its Indofood products. Indomie has become one of the global. The brand is one of pride too. Korea has Samsung and K-Pop we have Indomie, “said Anthony.

Food and beverage makers projection that the industry this year could grow at a similarly strong pace to last year, with revenue seen rising by more than 8 percent to Rp 1.4 quadrillion (US$103.70 billion). The steady growth projection is based on increasing investment last year compared to 2015 as well as on a recovery in consumer spending.

Indonesian Food and Beverage Association (Gapmmi) chairman Adhi Lukman has sees revenue is estimated to keep growing, profit margins are projected to decline amid competition with imported products.

“Our homework is to increase the quality of our goods. The government, especially regional administrations, need to also facilitate investment in the industry, so that more can simply be produced locally,” he added.

Asahi has been focusing back on its alcohol business after acquiring a group of Central and Eastern European beer brands from Anheuser-Busch InBev in late 2016. In June, it announced the sale of its stake in a beverage joint venture in China, but still has a milk drink business in Indonesia.

Indofood dominates the domestic noodle market, which is maturing as consumers move on to more protein-based foods. The company is also facing growing competition in its dairy and snack businesses.

Writing by Linda Silaen, Email: