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EDIBLE OILS & FATS REVIEW
OVERVIEW
The Edible Oils & Fats (EOF) Division manufactures and markets
IndoAgri's downstream products, which include cooking oils,
margarine, shortening, crude coconut oil (CNO) and other by-
products derived from oil palm refining, fractionation and crushed
copra. The Group owns and operates five refineries, with total
processing capacity of 1.4 million tonnes of CPO per year. These
refineries are located strategically in major Indonesian cities and/
or near deep-water ports, which are logistically advantageous for
transportation.
Our Bimoli, Bimoli Spesial, Delima, and Happy range of cooking
oils are leading brands in the Indonesian market. Our consumer
margarine and shortening are marketed under the Palmia and
Amanda brands, while our industrial margarine and shortening
are branded under Palmia, Simas, Amanda, Malinda and
Delima. According to market research, our products continue to
dominate Indonesia's consumer market for branded cooking oils
and margarine.
In 2013, our branded products accounted for over half of the
Division's revenue, while sales to industrial customers and third-
party brands accounted for the balance. Our industrial pack cooking
oil is mainly sold, on an unbranded basis, to the Indofood Group
and other industrial food manufacturers, while our industrial pack
margarine and shortening are promoted under our own brands to
confectioneries, bakeries and other food manufacturers.
Supported by IndoAgri's vertically integrated agribusiness model,
the EOF Division is able to minimise on third-party purchases by
obtaining CPO raw materials from internal sources. Approximately
59% and 65% of the CPO used in the production of cooking
oil, margarine and shortening were produced by the Plantation
Division in 2013 and 2012 respectively.
We also leverage the distribution channels of our parent company
to supplement our market penetration efforts. Together, our
products are sold through direct channels as well as local and
national distributors serving approximately 326,000 retail outlets
across Indonesia.
We have achieved platinum level for the Indonesia Best Brand
Award from 2002 to 2013, and Diamond level for the Indonesia
Customer Satisfaction Award from 2000 to 2013.
2013 REVIEW
In 2013, the EOF Division reported total revenue of Rp8.6
trillion, a 9.8% decline over 2012. The softer sales reflected the
combined effects of lower sales volume of bulk oil and copra-
based products. The Division processed approximately 869,000
tonnes of CPO (including 59% from our own plantations) in 2013,
a 6% decrease over 2012.
The sales volume for edible oil products (which comprise cooking
oil, margarine and crude coconut oil) in 2013 declined 2% year-
on-year due to lower coconut oil and bulk oil sales, nonetheless
this division registered strong volume growth in underlying
branded products.
In terms of sales contribution, this Division accounted for 65% and
69% of the Group's external sales in 2013 and 2012 respectively.
In 2013, 90% of our revenue was derived in Indonesia, while the
balance was derived from exports to 50 countries, including the
United States, China, Netherland, Singapore, Italy, Nigeria, Spain,
East Timor, the Philippines and South Korea.
The Group strengthened the brand identity of its products and
brand loyalty amongst its customers through the rejuvenation
of product packaging and quality in 2013. Among others, the
Group re-launched its core brands, Bimoli and Bimoli Spesial,
by introducing new bottle and pouch-packaging designs, and
the range of industrial and consumer margarine under the
Palmia brand.
34 INDOFOOD AGRI RESOURCES LTD • ANNUAL REPORT 2013