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NEW UPDATES Asean Affairs 28 July 2014  

Unilever remains flat, Indofood surges in H1

Consumer goods giant Unilever ended the first half of the year (H1) with a stagnant bottom line, despite an earlier forecast that this year’s big events would push up consumer consumption.

The country’s noodle maker, Indofood Sukses Makmur, on the other hand, managed to boost its profits in the second quarter (Q2) of the year by raising its selling prices, after taking a dip of more than 20 percent in the first three months of the year.

The local arm of Unilever, an Anglo-Dutch multinational company based in London, reported an almost 14 percent year-on-year (y-o-y) increase in revenue, hitting Rp 17.58 trillion between January and June.

Its bottom line, however, sat at Rp 2.85 trillion (US$246.17 million) in H1, only slightly increasing from Rp 2.82 trillion a year before.

Reza Priyambada, Trust Securities’ head of research, said it was forecast that the consumer goods sector would enjoy good business this year in line with a number of major events, such as the FIFA World Cup soccer tournament and the legislative and presidential elections.

However, Reza said, firms had fallen short of reaping satisfying profits due to currency volatility as most of them imported their raw materials.

“Rising sales could not be directly translated into a profit surge because [consumer goods firms] also had to face rising costs and foreign exchange [forex] losses,” he explained.

Unilever saw its cost of goods sales increase by nearly 20 percent from Rp 7.46 trillion between January and June last year to Rp 8.95 trillion in the same period this year, while its forex losses skyrocketed from Rp 639 million to Rp 5.08 billion.

“To tackle the challenges, firms either had to increase their prices to book profit growth with a potential risk of losing customers, or to let their margin narrow to maintain their customers,” Reza added.

Publicly listed food producer PT Indofood Sukses Makmur booked Rp 2.3 trillion in net profits, a 34 percent increase during the first half of this year compared to the same period last year, thanks to the increase in net sales and the average selling prices of its products.

Indofood booked Rp 34 trillion in net sales during the first six months of 2014, increasing by 26.5 percent y-o-y, according to the company’s statement released on Friday.

Run by the Salim family, Indofood now has five strategic business units, namely consumer branded products (CBP), Bogasari, agribusiness, distribution and cultivation and processed vegetables.

From the five units, CBP contributed to Indofood’s net sales the most with 44 percent, followed by Bogasari (24 percent), agribusiness (17 percent), cultivation and processed vegetables (8 percent) and distribution (7 percent).

Sales in CBP rose 24 percent to Rp 15 trillion, those in Bogasari rose 13 percent to Rp 10 trillion and in agribusiness 8 percent to Rp 7 trillion, mainly driven by the increase in average selling prices of their products, the statement says.

Meanwhile, the distribution unit recorded a 15 percent increase to Rp 2.5 trillion in its sales because of CBP’s sales increase.

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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






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