Indonesia's economy has demonstrated surprising resilience in the face of the global economic slowdown, outperforming many of its regional counterparts. However, despite the country's growth prospects, Q309 has seen little merger, acquisition or expansion activity as companies continue to exercise caution in such an uncertain environment. Where expansion activity is taking place it has been primarily focused in the mass grocery retail sector. Q309 has seen mixed financial results from a number of the country's food and drink producers. Indonesian food giant Indofood Sukses Makmur announced that for Q109 sales climbed by just 0.7% to IDR8.91trn while net profit plummeted a shocking 70% to IDR110.4bn.
The company has cited the rising cost of raw ingredient imports as a result of the depreciating rupiah as the primary cause for such a significant drop in profit. On a more positive note, Unilever Indonesia, the local unit of Anglo-Dutch conglomerate Unilever Plc, posted strong results for Q109 with increases in both net profit and sales revenue. Net profit rose 9.4% to IDR769.1bn while sales climbed 18.4% to IDR4.48trn. Meanwhile in the soft drink sector, Aqua Golden Mississippi, the nation's largest bottled mineral water producer, has also announced strong results. For Q109 the company's net profit rose an impressive 96.8% to IDR26.3bn. Despite the current global economic uncertainty the company remains positive expecting sales for FY09 to rise 11.6% to reach IDR2.6trn.
This optimism would not appear to be misplaced as increasing health consciousness is fuelling interest in bottled water. This quarter Aqua Golden Mississippi stated its intention to de-list itself from the stock market. Moving to the mass grocery retail sector, Indonesian retailers Matahari Putra Prima and Ramayana Lestari Sentosa both announced expansion plans. The former intends to open a further nine hypermart outlets and five more Foodmart outlets in 2009, while the latter intends to open an additional two outlets. Both companies are hoping to take advantage of the expected increase in sales through modern retail outlets, which BMI estimates will increase 10.7% to IDR54.9trn in 2009 before rising to IDR82.1trn in 2013. Despite some disappointing results this quarter, the long-term outlook for Indonesia remains positive, a view that is further supported by the country's fourth-place position in BMI's Asia Pacific Business Environment Ratings.
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