Although The Rupiah Weakened Sari Roti Hope Steady Growth

PT Nippon Indosari bread maker Corpindo saw no signs of slowing business, despite the volatility in both the currency and the price of raw materials, such as the busy lifestyle of urban population has helped increase demand for its products.

"Wheat prices fluctuate and the weakening rupiah would certainly have affected us, but not significant as we have obtained the contract [with the agreed price] with a number of suppliers," said Nippon spokesman Stephen Orlando, Indosari Thursday.

Global wheat prices are expected to skyrocket from the current level of about US $ 5,19 to $ 12 per bushel if weather conditions remained normal, according to U.S. analyst Shawn Hacket Bloomberg was quoted as saying.

Otherwise, the rupiah, the currency used by Nippon Indosari for most transactions, has been depreciating to as low as Rp 12,967 per dollar Friday.

In addition to partnering with a number of suppliers, Nippon Indosari has minimized the risk of commodity price fluctuations by maintaining the optimal inventory level of wheat flour and chocolate as well as passing the price increases on to customers, the company stated in its financial reports.

In addition, more people-especially the towns residents are opting for bakery products for their breakfast because they don't have time to cook before leaving for work, Stephen said.

Nippon Indosari-Best known by the brand Sari Roti intended to order a minimum of 20 percent revenue growth this year, he said.

The company recorded an increase of 24.5 percent in net sales to Rp 1.88 trillion ($ 144.600.000) last year from $ 1.51 trillion in 2013, according to the annual report published on the Jakarta Stock Exchange (idx) site.

White bread sales accounted for 63.8 percent of the company's net sales last year, surpassing the popularity of sugar loaf, which contributes a landslide 75.5 per cent of the company's net sales in 2013.

New products minibun and dorayaki, launched last year, has begun to gain traction among consumers with the contribution of 2.6 percent and 0.9 percent, respectively.

A public company, whose shares are traded on the Stock Exchange under code bread, saw a surge in net profit amounting to 19.3 per cent to $ 188.580.000.000 last year from Rp 158.020.000.000 in 2013.

Stephen says that his company will continue to innovate to provide new variant of bread for consumers having previously launched two new variants in the first quarter of this year.

The company currently has 10 factories located in Java, Sumatra and Sulawesi, with a total production of 4 million units of bread per day.

Stephen said that his company would invest Rp 350 billion capital expenditure (capex) to develop its business this year, with $ 160 billion from previous bond issuance and the remaining Rp 190 billion comes from internal cash.

The company issued Rp 500 billion of bonds in March, the second issuance of bonds as part of its ongoing trillion bond of Rp 1.

Nippon Indosari cash and cash equivalents totaled about Rp 163 billion at the end of last year.

Source : http://www.thejakartapost.com