Market Reports

03Feb2001 THAILAND: More fish and fowl on the menu. 

Fish or fowl, but no beef, please. Rising health consciousness, not least fear of mad-cow disease, rising prices, and, to some extent, religion, are changing the consumption habits of Thais. Those past their mid-30s, especially, are eating less beef. The shift is threatening to drive at least one major fo od company in Thailand out of business. The Burger King fast food chain has reportedly closed nine restaurants and plans to shut its remaining five outlets due to poor sales. The changing preference in the local palate is attributed to the increased awareness of the relation between diet and health from greater public exposure to the media. For instance, reports about the mad-cow disease in Europe have generated concern here after a recent report said Thai cattle could be stricken with the disease because Thailand bought animal feed from Britain at the height of the epidemic. Responding to fears that the disease could be imported into the country, Thailand yesterday also banned all beef products from Europe, including the beef concentrate Bovril and canned soup, among a list of 98 items. Food and Drug Administration secretary-general Vichai Chowiwat told The Nation newspaper that Thai authorities had confiscated Bovril from supermark et shelves and arrested the distributor who allegedly smuggled the product in from Britain. Distributors and importers of beef products from banned European countries face a penalty of up to two years in prison. But it is not all fear of catching the deadly disease that is keeping Thais away from beef. Staying healthy is the main reason why most have cut out red meats from their diets. An emerging generation of health conscious Thais were cutting down on high-protein red meat which are believed to contain toxins harmful to the body, said Ms Suwan na Subhimaros of Chulalogkorn University's Food Technology Department. In recent years, more Thais were suffering from heart diseases - a major killer in this country - which are caused partly by one's diet, she said. The high cost of pork and beef was another deterrent. 'More people are beginning to realise that they can get by with fish and chicken for the same amount of money,' said Ms Suwanna. Thais, predominantly Buddhists, are generally meat-eaters, but many abstain from beef because of their belief in the Goddess of Mercy. The rejection of beef is giving fast-food chains like Burger King a headache. According to a report, the local franchisee tried to lobby for more fish and chicken items to be put on the menu but it was rejected by management. McDonald's, which is more established in Thailand, apparently does not have the same problem because it offers a wide range of meat burgers. KFC is reportedly doing a roaring business. Sales at all its Thai outlets have risen, cheered on by increased chicken consumption nationwide which jumped to 11 kg on a per capita basis from 8 kg five years ago. 

In China
30Jan2001 CHINA: Balanced diet: Consumption of health food, junk food to grow In the new millennium. 

Food is the largest living expense in Chinese life, accounting for approximately 40 percent of total household expenditures. While the Chinese are consuming more and more natural foods and health foods, they are also consuming more convenience foods and highly processed foods, according to the Jan. 21 Yangcheng Wanbao (Yangcheng Evening News). 
Food authorities identify eight high-growth categories in the food industry: holiday and recreational foods, foods to be presented as gifts and foods used in ceremonies and weddings, fast foods, travel foods, tea house and bar foods, gourmet and specialty foods, food products used to enhance flavor, and health foods. 
Chinas food industry has grown at an average annual rate of 10 percent over the past 10 years, according to government statistics. Food is the largest industry in China. In 2000, the national food industry posted an estimated output of 3 trillion renminbi (US$413.79 billion), the article said. 

01Feb2001 CHINA: Chinese Dairy Producer Goes Global. 

Beijing Sanyuan Food Co., Ltd. is going global after striking an acquisition deal with U.S. dairy giant Kraft on January 12 in Beijing. 
According to the contract, Sanyuan paid 9.3 million U.S. dollars for an 85-percent stake in Beijing Kraft Food Corp., Ltd. to become the full stake-holder of the company, after aiready possessing a 15-percent stake in the company. 
Sanyuan is the largest dairy producer in the Chinese capital, offering varieties such as milk powder, yogurt, cheese, and fresh milk. 
The Beijing dairy giant realized a sales return of some 800 million yuan (approximately 96.4 million dollars) in 2000. 
Sources with Sanyuan said that the company is not in a position to meet future market demands with its current production capability. 
The acquisition deal is expected to help Sanyuan to bridge the production gap with Beijing Kraft's 200-ton daily producing capacity. 
Meanwhile, Sanyuan is to take full advantage of Kraft's international brand equity in order to tap the global dairy market. 
Beijing Kraft was established in 1993 and its milk products have been very popular with Chinese customers. 

01Feb2001 CHINA: Cofco sets dedicated food arm in motion. 

China National Cereals, Oils & Foodstuffs Import & Export Corp (Cofco) is expanding its restructuring by injecting about HK$1.15 billion-worth of edible oil refineries and wineries into its SAR-listed subsidiaries. 
Under the deal, Cofco's wholly-owned SAR window company Cofco (Hong Kong) will sell its entire 100 per cent stakes in Cofco Oils & Fats Holdings and Cofco Wines & Spirits Holdings to its associate red chip, China Foods Holdings, for HK$1.1 billion. 
Cofco is the mainland's state-owned food-trading conglomerate. 
China Foods vice-chairman Liu Fuchun said the acquisition would enable his company to consolidate its business and increase domestic market share. 
The red chip, intended to be Cofco group's food and beverage flagship, will pay for the assets by issuing about 692.66 million new shares at HK$1.60 to Cofco (HK). It will change its name to Cofco International. 
To reinforce the move to separate government and business, Cofco is also selling its 40 per cent stake in soyabean oil refiner Great Ocean Oil & Grain Industries to China Foods. 
China Foods, which will issue about 24.2 million new shares, worth HK$38.7 million, to Cofco (HK) to pay for the stake, will hold it through Cofco Oils & Fats. 
The consideration for the deal may be increased by up to HK$23.7 million in cash equivalent for any further investment made by the Cofco group before the deal is sealed. 
Analysts said the exercise would give the red chip a clearer business focus. 

31Jan2001 CHINA: CHINA SETS TARGETS FOR MEAT INDUSTRY. 

The Chinese government said it plans to increase the production of meat products with a high feed conversion rate in the 2001-2005 period, particularly the output of grass-eating animal and poultry products. 
The China Food Industry Association said that China's meat output is currently 59.5 million tons, of which 67 per cent are pork, 20 per cent are fowl and 13 per cent are beef and mutton. By the end of 2005, China's total meat output will exceed 72 million tons and the proportion of pork will drop further. 
Over the next five years, meat products will be diversified to meet demand of customers of different consumption levels; meat products will be processed deeper; more convenient products such as cooked meat products and meat sausages will be produced; product mix of tinned meat will improve; and exports will be expanded. 

05Feb2001 SINGAPORE: SINGAPORE'S ZAGRO ASIA LTD DISPOSES OF SUBSIDIARY. 

Zagro Asia Limited (ZAL) (SGX:ZAGO), a manufacturer and distributor of animal healthcare products, announced that it has signed a conditional agreement with Diethelm Keller Holding Ltd, a Swiss-incorporated company and Vitamex, a Belgium-incorporated company, in order to dispose of ZAL's entire interest in its wholly-owned subsidiary, Zagro Asia Co Ltd (ZAT), for a cash consideration of SGD2.55 million (US$1.46 million). 
ZAL was approached because the other companies expressed interest in buying over ZAT's existing plant in Tianjin China, in order to expand the purchasers' existing network for the manufacture and sale of specialized vitamin premix in Northern China, it said in a statement. 
Since the Zagro Group's entry into China, the concentration of ZAT's key customers has been mainly in southern China with limited customer activity from Northern China. The company's prudent approach towards granting credit restricted ZAT's ability to generate sufficient volume of business to fill its excess production capacity, ZAL said. 
The sale will enable ZAL to redeploy its resources by seeking an alternative plant in Southern China to service its key customers. ZAL intends to continue its presence in China but as the license to operate in Tianjin cannot be transferred to Southern China, the disposal of ZAT as a going concern has enabled the company to secure a higher selling price as opposed to merely disposing of the existing plant. 

05Feb2001 CHINA: CHINA'S FOOD INDUSTRY DEVELOPS PLANT PROTEIN RESOURCE PLAN. 

In view of current developments of plant protein products, experts of China Food Industry Association propose that China should rely on technological advances to realize comprehensive utilization of plant protein resources, especially plant protein from soybeans. 
Their proposal falls into four parts: 
- To speed up development of soybean powder, milk powder and milk. 
China's annual output of soybean powder is about 1.6 million tons at present and the prices of the products are fit for current consumption level in China. The main task at present is to strengthen advertisement of the products and explore market among the middle-and old-aged population. 
Soybean milk is a kind of convenient product, and the emphasis should be put on fresh keeping and packing. 
- To expand the production of plant protein raw materials. 
China now has about 30 enterprises separating protein from soybeans at present and the designed annual capacity is 60,000 tons and the actual annual output is 30,000 tons. Their output of other protein products is about 100,000 tons a year. Meanwhile, more than 2,000 oil-processing firms are producing seven million tons of bean dregs a year as by-products of edible oils. The present task is to make comprehensive utilization of soybean protein separation and oil production and increase the added value of products. 
- To speed up development of soybean food. 
- To develop traditional soybean products. 
China now produces more than 100 kinds of soybean products in nine series. But most of these products are sold in bulk and there are not convenient packages. Considering limited shelf life of soybean products, experts suggest small packages. 

04Feb2001 JAPAN: Suntory targets Chinese beer lovers. 

Struggling to survive in the saturated domestic market, Suntory Ltd. has stepped up its operations in China in a bid to capture the hearts of beer lovers in the world's most populous country. 
"We have been accumulating know-how in the beer business in China from an early stage," Hitofumi Oiwa, who heads Suntory's international business section, said in expressing confidence about further successes in the Chinese market. 
The major Japanese brewer set up a beer factory with the Chinese government in Lianyungang, Jiangsu Province, in 1984 to become the first foreign beer maker to enter the country. 
It first achieved major success in Shanghai, with a plant it established in another joint venture in 1995. 
With production reaching 133,000 kiloliters in fiscal 1999, Suntory overhauled Heineken NV of the Netherlands to become the No. 1 beer producer in the city with a 30% market share. 
Suntory expects its share in Shanghai to expand to 34% in fiscal 2000, company officials said. 
The success encouraged the company to establish a plant in Kunshan, close to Shanghai, which will start operations this spring. 
The Shanghai and Kunshan plants will have combined annual beer production capacity of 220,000 kl, which will be raised to 350,000 kl next year, the officials said. 
Suntory is also working to beef up its sales operations, they said. 
In fiscal 2001, the company will increase the number of its sales staff by around 100 in fiscal 2001, bringing the total workforce to some 500, the officials said. 
Suntory will also set up a new control system for orders, shipments and production. 
Analysts said that Suntory has achieved its success by making "light" beers to meet Chinese tastes and by advertising its products effectively through TV commercials and airships. 
But uncertainty remains over whether Suntory can continue to make gains in the Chinese market, where an estimated 60 foreign breweries are present but many are starting to scale down or move out. 
The foreign concerns include international majors such as Carlsberg, Bass, Budweiser, San Miguel and Guinness. 
Meanwhile, other major Japanese brewers such as Asahi Breweries Ltd. have started to tap into China. 
Suntory's China strategy coincides with its recent efforts to bring its beer division into profitability in 2001 for the first time since the division was founded in 1963. 
The company is Japan's biggest whiskey distiller, but places third for beer following Asahi and Kirin Brewery Co. 
"We can bring the beer division into the black in 2001," Suntory director Hirofumi Maruyama said last month. 
Suntory has been enjoying relatively healthy beer sales on the heels of strong shipments of its "happoshu" sparkling low-malt beer-like liquor. Happoshu sells for less than regular beer due to the lower tax. 
Happoshu sales account for roughly one-fourth of Japan's beer market. 
Suntory's program for 2001 targets raising domestic sales of beer and happoshu by 6% to 61 million cases of 20 633-milliliters bottles. 
The company had a 10.4% market share for beer and happoshu in 2000, eclipsing the 10% line for the first time. 

01Feb2001 CHINA: Jusco plans to open more stores, close losing units. 

JUSCO Stores plans to open two to three new outlets in Hong Kong over the next two to three years, but at the same time is also contemplating closing unprofitable stores. 
Managing director Sozaburo Yamazaki revealed that parent company Aeon's policy requires the company to evaluate whether to close a franchise after three consecutive years of losses. 
Another concern of the company is rental costs. Many of their leases were signed before 1997 when property was more expensive. The company is currently negotiating with landlords to lower rental rates by at least 8 per cent but is aiming for double-digit reductions. 
It also is looking at possibly moving to less expensive locations. 
The company said it continued to thrive in Hong Kong with its eight outlets in a market that has been less kind to other large Japanese retailers. 
Daimaru, Matsuzakaya, and Yaohan are only some of the names of large Japanese department stores that have been forced to leave Hong Kong in recent years, while Causeway Bay landmark Sogo continues to struggle after seeing its parent company go out of business in Japan last year. "We have recorded moderate growth this year and full recovery in the retail sector is still on its way this year," Mr Yamazaki said. 
The company posted 5 per cent gains over last year's Christmas and New Year's figures, and Chinese New Year sales were similar to last year. 
Mr Yamazaki said the Chinese New Year gains were not as significant because there was a closer timeframe between Christmas and Chinese New Year this season compared to 2000. He also noted that clothing sales were down, blaming it on the warmer Christmas experienced last year compared to the previous one. 
Mr Yamazaki noted the difficulties the retail market faces in Hong Kong, which had to cope with salary freezes and the implementation of the MPF last year. 
"Jusco still maintained its distinct positioning in the market by providing a wide range of unique products, creating a strong consumer base," he said. 
Still, the company posted double-digit turnover growth in September to November last year compared to the same period in 1999. The company has invested $9 million in renovations at its Kornhill store last year, 90 per cent of which is already paid for. Jusco is also spending $6.5 million on the Lok Fu branch's renovations later this year and reports it currently has a positive cash flow, putting it in a better financial position now than it was in August 2000. 
Expansion into China is a priority, with an outlet expected to open in Shenzhen. 
Sales at the Guangzhou outlets are satisfactory and the company continues to look for other opportunities in southern China. Mr Yamazaki said that sales at the Guangzhou shops has been satisfactory and a double-digit growth this year is expected. He said the company remains cautious yet optimistic about the performance of its supermarkets amid fierce competition. 

01Feb2001 CHINA: E-Ticketing and Fresh Food. 

In addition to getting bigger, FamilyMart also plans to get better. This year, it aims to broaden its services and cut costs by linking its stores in an e-business network. It also aims to expand its offering of fresh, ready-to-eat food in the year ahead. 
By the end of 2001, all of the FamilyMarts in Taiwan will offer online shopping and ticketing services. They will also serve as delivery points for merchandise ordered over the Internet, Pan says. 
In another cost-cutting initiative, FamilyMart is tying up with three other convenience chain stores to integrate their supply channels, form joint purchasing agreements, and develop new products. 
For instance, FamilyMart will buy its mineral water, soft drinks and instant noodles jointly with Life-Mart, OK-Mart and Nikomart after Taiwan enters the World Trade Organization (WTO), which is expected in the middle of the year. Borrowing a page from President Chain Store, jointly purchased goods will continue to bear the respective brands of the four operators. 
Under the joint development program, the Tai San Group, the parent company of Nikomart, is likely to produce mineral water for the three other chain stores on an original equipment manufacturer (OEM) basis. The four stores have yet to hammer out details of the OEM plans. 
The Kuang Chuan Group, the parent company of Life-Mart, might also produce dairy products and other goods for the three partner chains on an OEM basis. 
Life-Mart projects its revenue to grow sharply this year. It plans to add 121 stores to its chain this year, bringing the total to 830 outlets. It also forecasts revenue to rise 26.3% to NT$12 billion (US$368 million) in 2001, up from the NT$9.5 billion (US$291 million) it posted last year. (SST, Jan. 2000) 

31Jan2001 SINGAPORE: People's Food gets okay for mainboard listing. 

CHINA'S biggest meat products manufacturer, People's Food Holdings, received in-principle approval yesterday to list on the mainboard of Singapore Exchange. 
People's Food Holdings is the holding company of Loampit, Linyi Xincheng Jinluo Meat Products Co and Champ Base. 
The group was incorporated in Bermuda in August last year but has been operating in Shandong since 1994. 
It has factories in Sichuan, Hunan and Inner Mongolia. 
Linyi Xincheng Jinluo Meat Products produces frozen and fresh pork, ham, sausages and frozen chicken, sold throughout China under the Jinluo brand. 
Its executive director Zhou Lian Kui said: "Our Chinese customers have come to trust the Jinluo brand for high-quality meat products. People's Food has facilities located throughout the northern, southern, western and central parts of China. We are able to ensure speedy delivery of our products, thereby ensuring freshness and transferring cost savings to customers." 
People's Food posted a net profit of 302.6 million renminbi (S$63.5 million) on turnover of 2.3 billion renminbi in 1999. 
For 2000, net profit is expected to rise to 408 million renminbi on turnover of 3.2 billion renminbi. 

News Updates

02Feb2001 PHILIPPINES: RFM, Uni-President ink instant noodle venture. 

Concepcion-led food and beverage firm RFM Corp. has agreed to tie up with Taiwanese food giant Uni-President Enterprises for the manufacture of instant noodles in the country. 
RFM assistant corporate secretary Cristina D. Reyes said the parties have entered into an agreement to form a joint-venture firm for the new business undertaking. 
Ms. Reyes said the joint-venture company will be majority-owned by the Taiwanese company with 65% stake. The Uni-President Group is Taiwan's largest food firm. It is also Taiwan's largest investor in mainland China. Last year, subsidiary President Chain Store Corp. (PCSC) took over local 24-hour convenience store firm Philippine Seven Corp. for P991.85 million. 
The Uni-President group was the first foreign group to establish presence in the country after the government removed the ownership restriction in the retail sector. 
Earlier, the company said it will explore a possible buy-in deal with two more Philippine companies engaged in food manufacturing after acquiring Philippine Seven. 
RFM's noodles business is currently being handled by wholly owned subsidiary RFM Foods Corp. 
Formerly RFM-Indofoods, the company is 60% owned by RFM Corp. and is solely engaged in the instant noodles business. 
The company used to be a 60-40 joint venture with the Salim Group. The Indonesian conglomerate decided to divest its stake in the food firm in 1999 after the economic crunch in that country affected its operations. Aside from RFM Foods, the group operates poultry firm Swift Foods, Inc.; soft drink company Cosmos Bottling Corp.; and ice cream maker Selecta Dairy Products, Inc. 

30Jan2001 VIETNAM: A Shrimp Hatchery Brought Into Operation. 

Duyen Hai Aquaculture Company has opened a shrimp hatchery worth VND3 billion ($206,896) in Hiep Thanh commune, southern Bac Lieu province. The farm is capable of producing 200 - 400 million shrimp larvae per annum, the biggest farm of this kind in the province. 
The company is the biggest foreign-owned aquaculture enterprise in Vietnam with total capital of $5 million. Last year, the company produced 13 million prawns and reported a net profit of VND10 billion ($689,655). 

05Feb2001 AUSTRALIA: PHILIPPINES SAN MIGUEL TO ABSORB DEBT OF COCA COLA AMATIL UNIT. 

San Miguel Corp has confirmed that it will take on debt from the Philippines unit of its part-owned Australian subsidiary Coca-Cola Amatil Ltd (ASX:CCL) (CCA) under a proposed share swap deal. 
Australian bottler CCA is negotiating with its two largest shareholders San Miguel and US-based The Coca Cola Company (TCCC) over the proposed sale of Coca-Cola Bottlers Philippines Inc (CCBPI). 
"The company confirms that it is in talks with CCA and TCCC for the joint acquisition of CCBPI in exchange for the cancellation of CCA shares and the assumption of debt," San Miguel said in a statement today. 
"However, the company is not prepared to make any announcement at this time because the negotiations are still ongoing. 
"When agreements have been reached, the company will make the proper disclosure as required by law." 
The San Miguel board last week authorised its management to proceed with negotiations with CCA and Coke to acquire the Philippines unit. 
CCA's independent directors are expected to be called to a meeting this week to discuss the proposal. 
CCA, Coke and San Miguel were believed to have reached broad agreement on the future of Coca-Cola Bottlers Philippines and were understood to be close to finalising the details. 
But each of the parties have yet to confirm that a deal has been reached. 
The terms of the deal were believed to be for San Miguel to swap its 21.5 per cent stake in CCA for 65 per cent of the Philippines operation. 
US-based Coke would gain the remaining 35 per cent, in exchange for 18 per cent of its current 37.4 per cent holding in CCA. 
San Miguel and Coke were believed to have agreed to pay the $A2.1 billion ($US1.15 billion) book value for the Philippines operation, but some reports suggested a $2.3 billion sale price. 
CCA paid $3.4 billion for the Philippines operation in 1997, acquiring 70 per cent from San Miguel and later the remaining 30 per cent from Coke. 

03Feb2001 PHILIPPINES: San Miguel deal on track. 

The new Arroyo Administration in the Philippines is to reorganise the board of San Miguel Corp in a move that is unlikely to affect its re-acquisition of Coca-Cola Bottlers Philippines from Coca-Cola Amatil. 
Philippines congressman Mr Wigberto Tanada, who is allied to the administration of the President, Mrs Gloria Macapagal Arroyo, and speaks for coconut farmers who are seen as the underlying owners of a large chunk of San Miguel, indicated that the new government-controlled board would not re-examine the Coca-Cola Bottlers re-acquisition. 
"The new board members will see to it that the interests of San Miguel will not be prejudiced," he said. 
On Thursday, the current 14-member board authorised management to sign an ABN Amro-packaged deal with Coca-Cola Amatil, the majority shareholder of Coca-Cola Bottlers Philippines. 
San Miguel's senior vice-president, Mr Alberto Manlapit, said it was the first time the board had discussed the proposed re-acquisition of Coca-Cola Bottlers Philippines. 
He said San Miguel could now start the due diligence audit of the company, which might take four weeks. Once finalised, he said, the deal would enable San Miguel to make a strong comeback in the soft-drinks industry. 

30Jan2001 MALAYSIA: MALAYSIA'S BERNAS APPOINTS NEW MANAGEMENT TEAM. 

Padiberas Nasional Bhd (BERNAS) announced a corporate restructuring exercise today involving the appointment of a new top management team, effective Feb 1, 2001. 
In a statement Tuesday, Bernas said the restructuring was in line with the group's direction to strengthen its position to become a leading player in the food industry. 
Under the new structure, Bernas' current group managing director Mohd Ibrahim Mohd Nor has been appointed group deputy chairman and adviser to the group. 
The deputy group managing director for rice business Yahya Abu Bakar will be the new group managing director. 
Ahmad Fuad Abdul Wahab will continue to assume the post of deputy group managing director for Corporate Services and Other Business and Mamat Daud, currently the Head of Rice Business Support and Import and Trading, will be appointed as the deputy group managing director for Rice Business. 
Bernas said the new structure, coupled with the group's experienced board of directors will see the group being streamlined into a focused and dynamic food conglomerate. 
In addition, the immediate and long-term strategies of Bernas group will still be based on the integration of the national food industry concentraing on developing an intensified, systematic and efficient distribution network, it said. 

30Jan2001 SINGAPORE: YHS gets approval for sale of food business. 

Yeo Hiap Seng Ltd has finally received the nod from Malaysia's Securities Commission to sell most of its food and manufacturing business to its listed Malaysian associate in a $58 million deal. 
But the approval, which comes six months after Yeo Hiap Seng Malaysia (YHSM) made its appeal, is subject to several significant conditions. 
Under the deal, parent Yeo Hiap Seng, through Yeo Hiap Seng Singapore Pte Ltd (YHSPL), will sell its entire stake in YHS Beverage International Pte Ltd to YHSM. In return, the latter will issue 44.3 million shares at RM2.96 each to YHSPL, amounting to a 20.7 per cent stake. The deal is conditional on YHSPL also acquiring Yeo Hiap Seng's direct 40 per cent interest in YSHM, which will bring YHSPL's stake to a total of 60.7 per cent. 
The deal was rejected last June on the grounds it exceeded a 25 per cent limit imposed by Malaysia on the acquisition of foreign assets by listed companies. 
Put together by adviser Nicky Tan of Arthur Andersen, it was one of the first major corporate restructures in Malaysia involving foreign interests. 
The transaction has been approved on condition of a staggered moratorium on the YHSM shares and on YHSPL's award of a 15-year manufacturing contract to YHSM. Given the 60.7 per cent interest, a general offer waiver was also obtained, provided YSHM shareholders are in concurrence at an EGM where interested parties will have to abstain from voting. 
Yeo Hiap Seng managing director Leong Horn Kee told BT the group has no problems with these conditions. "We have no intentions at all of selling our shareholding in Malaysia," he said. 
He also said manufacturing equipment will be moved from Singapore to Malaysia. 
Mr Leong said the deal would result in a 20-30 per cent savings in manufacturing costs. The Malaysian operations will manufacture numerous non-carbonated drinks, sauces and canned food under the Yeo's brand. 
It is not known how much manufacturing costs contribute to the group's overall expenses. 
Yeo Hiap Seng Ltd sank into the red with a loss of$2.3 million for the six months ended June 30, despite a 30.4 per cent rise in turnover to $239 million. 

30Jan2001 PHILIPPINES: PHILIPPINES TO BUILD ABBATOIR IN LEGANES. 

The Department of Agriculture through its Agricultural Credit Enhancement Program (ACEF) executive committee has approved the P12 million loan for a class "AA" abattoir of the municipality of Leganes and the Iloilo City Farmers Multi-Purpose Cooperative. 
This is one of the six approved projects of the DA-ACEF in the whole country with the Land Bank of the Philippines (LBP) as the implementing bank. A memorandum of agreement has already been signed by the proponents and the DA administration to effect the release of this fund. 
The class "AA" abattoir will be put up in the town of Leganes to provide hog farmers a place with the needed sanitary facilities when butchering the hogs. Hogs farmers can already meet the required standard in exporting the meat outside of the region. 
This abattoir has been raised as a needed facility of hog farmers during the outbreak of the foot-and-mouth disease in Iloilo two years ago. 
According to DA information office chief Velma Encanto, ACEF is a credit facility of DA which is interest and collateral-free. It is intended to help the agricultural sector become globally competitive, viable, efficient and sustainable. 

31Jan2001 THAILAND: Project Orange generates fizz. 

COCA-Cola (Thailand) has become the first of the softdrink giant's Asian bottlers to relaunch its Fanta drink with new-look packaging. 
The marketing campaign, which has the name "Project Orange", aims to create public awareness of the design change, said Malin Ponteerasatian, group brand manager for flavour. 
As part of the campaign, the project's mascot, Dr Som Sud-za (Dr Orange Veryfizzy) of the Fizzy Research Agency, revealed yesterday the results of his "investigation" into what was inside the four giant mysterious orange objects that apparently fell to the ground in Bangkok recently. The answer was 30 bright orange Fanta Tuk-Tuks designed to paint the city orange. 
The four mystery objects could be seen at Center Point, the MBK bus stop, the MBK main entrance, and the Planetarium. The Dr Som Sud-za character conducted on-site investigations, television shows covered the campaign, and teens from around the city guessed and joked about what the strange new landmarks were, the company said. 
Malin called the campaign the company's most innovative to date. "We wanted to give teens across Bangkok a new and unique Fanta experience, creating a sense of mystery and discovery so that we could connect directly with them," she said. The marketing campaign is targeted at Fanta's core customers, who are children aged between 8 and 15. 
Malin said the campaign was launched to support the change in the design of Fanta's packaging, starting with the cans and then moving on to other containers. 
She added that the new Fanta packaging design was rolled out recently in Europe, starting in Germany. Thailand will be the first country in Asia to get the new-look bottles and cans. 
"The new artwork will reflect the 'bold fruit taste' of Fanta as well as the fun characteristics of the brand. The design change is also in keeping with Coca-Cola's new marketing policy of 'think local, act local', which allows each licensee the freedom to develop their own marketing and product campaigns to suit the local consumers," she said. 
Malin said that the company is working hard to understand Thai consumers and their requirements. All the marketing campaigns and TV commercials the company runs will be based on its research into consumers and their needs. 
"We have to step forward and look beyond what our consumers want and what is interesting to them," Malin said. 
She said that Fanta has a strong brand image. It controls about 70 per cent of the flavoured drinks market, an increase of many market share points during last year, according to AC Nielsen's research. 
Malin said that as part of the Project Orange campaign, which is costing more than Bt35 million to stage, the 30 tuk-tuks will tour Bangkok for the next four weeks, stopping at schools and teen hang outs weekday afternoons and weekends. Rides are free to teens - the only "fare" they must pay is to scream 'WOW!' - as in the Fanta TV commercials. The driver will take the teens' pictures and enter them in a weekly contest to win a mobile phone. 
Malin said that the campaign also includes a community aspect. At the launch event yesterday, slum children from Father Joe's Human Development Foundation and Samakkee Songkrao School were entertained by MC Shahkrit Yamnarm and Dr Som Sud-za. They then became the first kids in town to ride in the Fanta Tuk-Tuks, which formed a colourful convoy as they took the children home through the Bangkok traffic. 
Over the next month, the Fanta tuk-tuks will take more than 2,000 underprivileged children for Fanta fun days out. Every weekday morning, the tuk-tuks will take orphans and slum children to Dusit Zoo to visit the animals and take part in the Fanta Young Explorers walk. 

02Feb2001 PHILIPPINES: La Tondena net income jumps 34 pct in 2000. 

La Tondena Distillers Inc's net income grew 34 percent year-on-year to 1.35 billion pesos ($27.55 million), with record volumes seen across all product categories, the beverage company said on Friday. 
A unit of food and beverage giant San Miguel Corp , La Tondena engages in water, juice and hard liquor businesses. 
Analysts have said La Tondena is seen as a major contributor to the parent's net income in 2000, which they expect could be high as 6.9 billion pesos. 
"While non-liquor emerged a much stronger business, liquor clearly remained the company's lifeline, contributing 73 percent of consolidated revenues and 77 percent of consolidated gross margin," the company said in a statement. 
Consolidated sales revenues for the full year reached 14.2 billion pesos, 34 percent higher than the 10.6 billion pesos made in 1999. 
Double-digit revenue growth was registered across all product categories: 14 percent for liquor, 47 percent for bottled water and 318 percent for juice, it said. 
Operating income rose by 23 percent to 2.9 billion pesos, from 2.3 billion, reflecting the impact of higher volumes combined with improved operating efficiencies. 
The company's attempts to increase market penetration and push distribution synergies with selected San Miguel beer dealers helped to improve market share to 56 precent, four percentage points higher than a year ago. 
"The highly-successful 'One Barangay' and 'Magpapainom Ako' advertising campaigns contributed to strong sales of Binebra San Miguel, particularly in Luzon," it said. 
"In the Southern Philippines, Vino Kulafu reinforced its leadership position in the chinese wine market with a significantly increased market share of 66 percent." 
In the water segment, the combination of the Wilkins and VIVA! brands brought its bottled water volumes to a peak, with robust PET sales driving growth. 
La Tondena said it now topped the juice industry with the consolidation of powdered juice firm Sugarland Beverage Corporation (SBC) into its juice business. 
Since it began operations as a La Tondena subsidiary last May, Sugarland has increased its volumes by 35 percent, driving revenues to two billion pesos, the company said. 

Investment News

01Feb2001 INDONESIA: Food, drug control office gets new name. 

Directorate General for Food and Drug Control (POM) on Wednesday became an independent institution separated from the Ministry of Health and Social Welfare and was renamed as the Food and Drug Control Agency (BPOM). 
The new agency, as stipulated in Presidential Decree No. 166/2000, will be put directly under the President's supervision and will coordinate with the ministry of health and social welfare. 
"By becoming an independent body, the BPOM will be more effective in dealing with complex problems concerning drugs and food and how to supervise it. 
"It will function like the FDA (Food and Drug Administration) in the United States," Minister of Health and Social Welfare Achmad Sujudi said after the enactment ceremony of the new body on behalf of President Abdurrahman Wahid in Kuningan, South Jakarta. 
"Many people don't know that actually we already have generic medicines for 90 percent of drug supplies in the country.. so actually patients do not have to pay for expensive drugs with the same healing capabilities. Now BPOM can handle that," the minister said. 
Former POM director general Sampurno is appointed as chairman of the agency, which will employ some 2,500 employees from the former office and the ministry of health. 
"Thanks to the House (of Representatives) members, this new agency is allotted a budget of Rp 44 billion. "We will start revising the policy on food and drugs in a rational way as well as intensifying surveillance and protection for consumers," Sampurno told the media. 
The agency will work with related institutions and non-governmental organizations in handling various matters on food and drugs. 
The existing POM offices will function as usual and there will be more branches up to the regional level, he said. 
"In sensitive areas such as airports, ports and borders, there will be POM offices as we know that the transportation of drugs and food pass through these gates. In Soekarno-Hatta Airport for instance, we will work with the director general for customs and excise and the quarantine office," he said. 
It will also be essential to place a unit of POM's personnel in every airport, seaport and border such as in West Kalimantan and Riau to prevent the smuggling of medicines and food, he said. 
"We want to give maximum protection and avoid health risks among people with a high level of standards and security," said 50-year-old Sampurno, a graduate from Yogyakarta-based Gadjah Mada University's school of pharmacy. 
The new agency will also set up a committee for public service, a center of illegal food and drugs investigation, an information center for drugs, food and beverages, a 24-hour hotline for public complaints and a center for food, drugs and beverages poisoning cases. 
"We have no choice but to start ordering existing food and drugs circulating in the country. Indonesia, for instance, is home to thousands of traditional medicines and we have never really had an effective way of supervising them. 
"There are many drugs passing into and out of the country and people tend to use them without knowing their ingredients," Sampurno said. 
Local governments have enough resources to perform a supervisory role. "Laboratories and equipment in the regions are relatively competent, such as those at the Irian Jaya capital of Jayapura. We've tried to fulfill the equipment needs for every lab over the past three years," Sampurno added. 

02Feb2001 MALAYSIA: INDONESIA'S JAMBI/RIAU OFFER INVESTMENT OPPORTUNITIES. 

Two districts in Indonesia, Jambi and Riau are offering high scale investment opportunities for investors, particularly members of the Indonesia-Malaysia-Singapore Growth Triangle (IMS-GT), in the area of oil palm plantation. 
The chairman of IMS-GT (Malaysia) Business Council Dr Arshad Ayub said the governors of the two areas had recently announced the investment apportunities there and invited Malaysians interested in opening their plantations there. 
"In Jambi, the governor has confirmed the availability of a land area measuring 400,000 hectares that can be developed into an oil palm plantation, while in Riau there is an area of 25,000 hectares available," he said during a press briefing here following a IMS-GT (Malaysia) Business Council meet here today. 
Currently, the Johor State Development Corporation, which is active in the agriculture sector, has many of its oil palm plantations in Indonesia. 
On the land problems faced by the IMS-GT members, Arshad said his department always carried out discussions with the rulers and people of the respective areas. 
"Hopefully, we will find a solution in the next five or six months," he said, refering to the problem faced by Johor in Kabupaten Lahat, Palembang. 
The problem involved the take over of an area measuring 400 hectares from a 15,000-hectare piece of land that had been marked for oil palm planting. The locals had demanded for higher compensation from that received in an earlier agreement. Some had also claimed that they had not received their compensation yet. 
The problem first surfaced in April 1999. To date, a total of 3,000 hectares of the land has been planted with oil palm. 
Asked on the effects the current political situation in Indonesia was having on Malaysian investors, Arshad said investors have to be careful with every investment they undertake. 
Arhad said the meeting today had also discussed the development of the precision agriculture project expected to take off this May and the flight transportation project between Malaysia and Indonesia. 

02Feb2001 INDONESIA: Indonesia May Approve Ajinomoto's New MSG Product 

An Indonesian Islamic religious organization that certifies food products may approve Ajinomoto Co.'s (J.AJN or 2802) new monosodium glutamate taste enhancer, the Jakarta Post reported Friday. 
Officials from Ajinomoto's Indonesia unit were released from questioning earlier this year after President Abdurrahman Wahid said political forces aimed at inciting Muslim unrest had unjustly blamed the Japanese food giant for breaking Islamic food-purity laws in making MSG. 
Wahid said forces aiming to incite Muslim unrest unjustly accused PT Ajinomoto Indonesia of selling a flavor enhancer containing enzymes grown on pork fat. 
Muslims are not allowed to eat pork or pork by-products. 
The new product uses enzymes extracted from soya beans, the report said. 
Representatives of Ajinomoto submitted a request to the Ulemas Council on Tuesday, said chairman Umar Shihab. 
"We are now in the process of testing the validity of the product," he said. 
Aside from a scientific investigation, a fatwa committee will also look for any conflicts with Islamic law. 
Approval may be issued within three to four weeks, said Mr Umar. 
The council supports the economic benefits that production of the new MSG will bring, but it also has to protect Muslims from consuming haram (forbidden) items, he added. 

31Jan2001 INDONESIA: AJINOMOTO PRODUCTS TO BE EXPORTED. 

The controversial food taste enhancer, Ajinomoto, will be exported to countries which do not require the "halal" certificate, under the tight supervision of the Industry and Trade Ministry, head of the Food and Drug Supervisory Board, Sampurno, said Wednesday. 
As of Jan 24, the producer of the monosodium glutamate product has withdrawn 2,750 tons of Ajinomoto, 585.7 tons of Masako, and 68 tons of Sajiku from market shelves across the country. 
Sampurno said the government gave the company until Jan 24 to withdraw its products from the domestic market. "Traders who still have Ajinomoto (in their stores) will have to return them to the distributors and the producer will return their money," he said. 
Meanwhile, Sampurno said the lawsuit filed by the Indonesian Consumers Foundation (YLKI) against Ajinomoto will be pursued. He urged the company to replace the pork enzyme it has been using to manufacture Ajinomoto with another enzyme called "mameno" which could be produced from soybeans. However, the new food taste enhancer which will use "mameno" will still need the "halal" certificate from the Indonesian Ulemas Council (MUI) before it is marketed in the country. 
In December last year, the MUI urged the Mojokerto-based PT 
Ajinomoto to withdraw all its products from the market after it was found out that the company has been using pork enzymes in its production, making the product unfit for consumption under Islamic laws. 

30Jan2001 THAILAND: Ban sought for German sausages 

Imported German sausages should be taken off supermarket shelves urgently as a precaution against the mad cow disease, the Livestock Development Department said yesterday. 
The Food and Drug Administration (FDA) should follow the example of German authorities and remove the products due to the high risk to health, said department boss Rapeepong Vongdee. 
Last week the FDA banned imports of beef and beef products from five more European countries - Luxembourg, Liechtenstein, Denmark, Spain and Italy. The ban will take effect once approved by the public health minister. 
The FDA on Dec 29 banned beef and beef products from Britain, Portugal, France, Ireland, Switzerland, the Netherlands, Germany and Belgium, following reports of fresh cases of bovine spongiform encephalopathy (BSE) or mad cow disease. 
Mr Rapeepong said he learned sausages were included on the banned list but wanted the agency to take a more urgent action. 
He urged the FDA to invoke the existing consumer protection law to immediately ban food that could be made from livers and spleens, which might carry the disease. 
FDA officials were confident local consumers would not be affected since most beef imports are from Australia. 
The extension of the ban follows reports from Europe the disease might be more widespread than previously thought. They warned the disease could spread to Asia in three or four years. 
Mr Rapeepong said it was reported the disease was spreading to Texas. US embassy officials in Bangkok were asked to report the situation and outline measures to solve the problem. 
Thailand imports meat and bonemeal from the US for the animal feed industry. However, Mr Rapeepong warned that since the US was Thailand's key trade partner, any action to ban US products should be carefully considered. 

02Feb2001 CHINA: Pork Kings sees good future for exports to Malaysia. 

Pork Kings hopes to export more pork to Malaysia since the Malaysian government has made it more difficult for pig farms to do business, according to a report in Krungthep Turakij. 
Pork Kings initiated sales of butchered pork to Malaysia with a shipment of 18 tonnes. There is rising demand for Thai pork products in Malaysia since the Malaysian government reformed its pork production laws following an outbreak of encephalitis. Many pigs were destroyed as a result of the epidemic, and the new laws make it much more difficult for farmers to invest in pig raising. Pork is a popular product among Malaysia's Chinese population, and is especially in demand during Chinese holiday 

02Feb2001 THAILAND: Beef products banned. 

THE Food and Drug Administration yesterday announced an extensive ban on beef products from European countries where it is feared cattle are prone to mad-cow disease. 
FDA secretary-general Dr Vichai Chowiwat said the agency had recently arrested the distributor of the beef concentrate "Bovril" which had been smuggled in from the UK for sale to supermarkets on the outskirts of Bangkok. 
The ban is on products from the UK, Ireland, The Netherlands, France, Spain, Germany, Belgium, Denmark, Portugal, Switzerland, Spain, and Italy. 
The distributors of banned products from those countries would face fines of up to Bt5,000 and six months in prison. Smugglers would face fines of up to Bt20,000 and/or two years in prison. 
Members of the public can check the names of the banned products on the website www.fda.moph.go.th or call 590-7354-5. To report the sale of banned products, they should call 1556. 
Vichai said those who had consumed Bovril should not be too worried as they were unlikely to have become infected. 

31Jan2001 THAILAND: B600m sought to absorb raw milk surplus 

Dairy farmers' co-operatives will request 600 million baht from the government to help solve the milk surplus problem during school holidays. 
Local raw milk production was 1,400 to 1,500 tons a day but dairies were buying only 1,300 tons, said Surachai Sirimai, vice-chairman of the co-operatives. 
One reason for the drop in purchases was the increased use by dairies of whey to blend with whole milk in finished products, he said. 
"There is more demand in the market. I have learned that the actual amount needed by milk processors is as high as 1,700 tons," he said. 
If the government approved the farmers' request, the funds would be used to buy surplus raw milk for 60 days during the school holidays starting on March 15, when consumption drops. 
A similar request was made yesterday by a committee to promote the dairy industry, which proposed a budget of 540 million baht to buy 3,000 tons of milk from farmers over two months. 
However, Mr Surachai said this year the problem would be more serious, and he believed that taking 10% or 600 million baht from the six-billion-baht school milk budget was reasonable. 
The Dairy Farming Promotion Organisation would buy the milk, process and package it for sale. 
Rapeepong Vongdee, chairman of the dairy promotion committee, agreed that the dairies' practices needed to be examined more closely. He said whey imports last year were 30,000 tons, triple the level of 1999. 
"It is possible that manufacturers bought whey and cut the use of whole and skimmed milk to save money as whey costs only 5.60 baht a litre compared with 12 baht for raw milk." 

30Jan2001 INDONESIA: C SULAWESI'S FROZEN SHRIMP EXPORTS DOWN. 

Central Sulawesi's frozen shrimp exports in 2000 produced only 1.4 million US dollars in foreign exchange revenue, a 65.53 percent decline compared to 4.255 million dollars in 1999. 
The foreign exchange earning came from the export of 170 tons of frozen shrimp to Korea, Japan, France and Hong Kong, head of foreign trade at the Central Sulawesi office of the Ministry of Industry and Trade Muhammad Champang said here on Tuesday. 
The drop in foreign exchange earnings was the result of a 64.50 percent decline in the export of fresh-water shrimp compared to 479 tons in 1999. 
One major cause of the drop was the tectonic quake of 6.5 on the Richter scale which rocked Banggai regency on May 4, 2000. Banggai regency in the past few years was known as a major frozen shrimp exporter in the province. In the 1994-1999 period the frozen shrimp exports from the region had always been the second biggest contributor of foreign exchange for the region. 
But in 2000 the exports dropped sharply as the result of the natural disaster and disease which killed thousands of young prawns belonging to and being bred by PT Banggai Sentra Sulawesi Shrimp. 
Another factor which caused the decline was the protracted sectarian clashes in Poso regency, which caused the area to stop its shrimp exports. 

Retail Bites

05Feb2001 THAILAND: Europe to get another taste of Thailand. 

S&P Syndicate, the leading local bakery and Thai-restaurant chain, is to launch a new Thai restaurant chain in Europe aimed at middle-class food-lovers. 
The new outlets will target a different market to the company's first overseas Thai venture, Patra, which is aimed at higher-income customers. 
The first branch of the new chain, provisionally named Pat Thai, will open this year in either England or Switzerland, said S&P director Pravesvudhi Raiva. 
He said that the move was part of the company's policy of more aggressive expansion in the overseas market. 
The new eateries will be aimed at middle-class consumers who prefer individual servings of Thai dishes and who enjoy a casual eating atmosphere. 
S&P Syndicate's Patra restaurants have already successfully targeting up-market clients. There are now six branches, two in England, one in Switzerland, two in Singapore and one in Taiwan. 
"Visitors who come to dine out at Patra experience a formal atmosphere and are served quite expensive dishes," said Pravesvudhi, "while the new restaurants will have a different target, focusing on casual visitors who like individual servings," he said. 
Pravesvudhi said that the company had opened two Thai restaurants called Siam Kitchen in Singapore to test the Asian middle-class and lower-income markets. 
"Siam Kitchen is more Singaporean in style. It needs to be adjusted and have a change of name to meet the different eating habits of consumers in Europe," he said. 
"We are in the process of drawing up the concept for the new restaurants. The first will be opened this year in either England or Switzerland," he said. 
As for Thailand, Pravesvudhi said that the company would open only two S&P restaurants this year, one of them at the World Trade Centre. Each will cover 150 to 200 square metres. 
"We will focus on opening small bakery outlets this year instead as they require low investment and business risk," he said. 
S&P will open 20 small bakery shops this year. The company already operates 103 bakery outlets and 47 restaurants in Thailand. 
S&P is also developing a new local restaurant chain called Patio to serve upper-middle-class or "B-plus" consumers. The new chain will serve an international menu at prices 30 per cent higher than at S&P's regular restaurants. 
Two Patio restaurants have already opened in Bangkok, and two more will this year. Each will cover 120 square metres. 
S&P Syndicate achieved a 15-per-cent increase in revenue last year, up from Bt1.7 billion in 1999. The company's a long-term target is to double its annual revenue in 10 years. 
Pravesvudhi said that the company had recently invested Bt150 million in a vacant factory building bought from Mulch Manufacturing, an electrical-appliance maker and subsidiary of Mitsubishi. 
On a 38-rai plot at Bangna-Trad Road kilometre 23.5, the 10,000-square-metre factory will play a part in the company's 10-year plan to triple bakery production. 
The company will move all bakery facilities to the new site by April. The capacity expansion will support the company's rapid growth in the bakery business, which has increased by 15 per cent every year. 
The existing factory on Sukhumvit Soi 62, which has reached full capacity, producing 3,500 tonnes of baked goods a year, will be turned into a logistics centre or office building. 

02Feb2001 INDONESIA: Indonesia Alfa Retailindo Sees '00 Net IDR20B. 

Indonesian retailer PT Alfa Retailindo (P.ALR) expects to post a full-year net profit of 20 billion rupiah ($1=IDR9,515) for 2000 on surging sales as consumer spending returns to pre-crisis levels, the company said Thursday. 
Alfa's higher earnings, compared with a IDR14.5 billion net profit in 1999, were delivered by a 43% jump in sales to IDR2 trillion. 
The company's executive vice president of finance Surjadi Budiman told Dow Jones Newswires he expects sales to rise a further 20% in 2001 as the company opens up to four new discount stores to add to its current 24 outlets. 
Alfa, which sells grocery items, will also establish at least 60 new minimarts throughout Indonesia as part of a rapid expansion plan for its minimart business, which is cheaper to operate and can be franchised, he said. It currently has 34 minimarts. 
Surjadi said the slower expansion growth for Alfa's larger discount stores - which contribute 70% to 75% of overall sales - is due to lingering caution after the company suffered at the hands of looters during the riots of May 1998. 
Dozens of Indonesian retail stores were destroyed during those riots which led to the downfall of former president Suharto. Retailers had already been suffering due to the sudden financial downturn as consumers tightened their belts when the rupiah plummeted against the dollar. But many retail businesses now report consumer spending has recovered to pre-crisis levels and consumer confidence is rising. 
However, Alfa said despite a sharp turnaround in consumer spending, it will expand its discount stores gradually, with around two to four new outlets every year. 
"For the short term, we are going to expand just a little bit because the political situation right now is still not stable," said Alfa's chief operating officer Eddy Supardi. 

Expansion For East Indonesia 

Alfa expects its greatest growth to come from areas outside the major cities, where it faces little competition from Indonesia's retail giants. 
"The prospects are very good because the market is so big," Supardi said. 
Alfa has its discount stores scattered throughout the densely populated island of Java, as well as stores on the tourist island of Bali, and Sulawesi. 
Supardi admits Alfa remains a long way behind rival minimart operator Indomarco, which has around 500 stores and that they are "trying to catch up". 
Last year, Alfa's parent company PT Hanjaya Mandala Sampoerna (P.HMS) dropped plans to buy Indomarco from the Indonesian Bank Restructuring Agency after the agency opted for an open bidding process. 
There had been market speculation that Sampoerna - if successful in taking over Indomarco - would then merge it with Alfa. 
But with that deal falling through, Alfa now has to compete head-on with the minimart leader. Supardi says Alfa is confident it can do this through its aggressive expansion plans. 
He says with the company's strategy to target areas in east Indonesia where isolated communities don't have access to such stores, Alfa can establish itself before the opposition. 
"We'd rather set up outside of Jakarta, to the east of Indonesia, because there is less competition," Supardi said. 
Alfa also operates wholesale and distribution divisions, although their contribution to Alfa's earnings remain small. The wholesale business contributed IDR303 billion in earnings in 1999, while the distribution division added IDR54.9 billion. 
Alfa listed on the Jakarta Stock Exchange in January 2000 to raise IDR53 billion to develop its minimarts and for working capital. 

02Feb2001 INDONESIA: Indomaret's existence questioned. 

The city administration has questioned the existence of "Indomaret" minimarkets due to their inappropriate locations, as they are mostly found in housing complexes. 
Head of the City Economy Development Office, Dameria Saragih, said on Thursday that her officials, along with the other agencies which had issued the necessary permits for the minimarkets, were evaluating the case. 
"If we find any violations of the regulations, we will close them down," said Dameria on the sidelines of a City Council plenary session on the establishment of subdistrict councils. 
Currently, most Indomaret minimarkets are managed through a franchise scheme by residents in housing complexes. There have been 269 Indomaret outlets opened in Jakarta and 227 others in Surabaya, East Java, and Bandung, West Java, since 1988. 
Each outlet, with an average width of between 60 and 200 square meters, supplies communities with basic needs from 10 a.m. to 10 p.m. everyday. 
However, there has been speculation that most of them have yet to obtain a building utilization permit (IPB), authorizing a change of use from a residence to a commercial premises. 
"I will also check on Indomaret's building permits with the City Development Supervisory Agency, which should have issued the necessary permits," Dameria said. 
Separately, city councilor Sambudi Bakri of the National Mandate Party (PAN) said that the Indomaret minimarkets could spell the death knell for traditional markets and small-scale businesses in housing complexes. 
"It indicates a monopoly which must be eliminated," Sambudi said. 
He said the city council would summon the Indomaret franchise holder, PT Indomarco Prismatama, next week. 
He also questioned the principal licenses required to operate the businesses and their expansion permits, which must be renewed every five years. 
Gubernatorial Decree No. 50 of 1999 stipulates that every privately run market measuring less than 200 square meters must obtain a basic license from the City Secretary. 
Furthermore, the minimarket must obtain a business permit from the Jakarta office of the Ministry of Industry and Trade, and a security permit from the City Public Order office. 
Contacted separately, Indah Suksmaningsih of the Indonesian Consumers' Foundation (YLKI) said that retail outlets like minimarkets have attracted customers due to ease of access, a greater choice of products and relatively cheaper prices. 
Air-conditioned premises, fixed prices and better services have given minimarkets their own place in the life of Jakartans who are too busy to go to nearby traditional markets early in the morning. 
"However, there is a tradition in our society to bargain and to purchase (in traditional markets) specific items that can't be found in minimarkets, such as fresh vegetables and spices," Indah said.