Indonesia: Brewer Delta Jakarta expects sales to pick up by the end of the year

Indonesian beer producer Delta Djakarta expects sales to pick up by the end of this year despite weak figures in the first half caused by restrictive government regulation and weak purchasing power, the Jakarta Globe reported on November 13.

The company plans to expand its export market, improve business efficiency and apply a different marketing strategy to counter Indonesian customers' weakening purchasing power.

Delta — famous for its iconic beer Anker — expects its revenue to grow by 5 percent to 7 percent by the end of the year.

The Jakarta City Administration has a 23.3 percent stake in Delta, which produces and holds licenses for seven beer brands, including Philippine-produced San Miguel and Denmark-based Carlsberg.

The beer producer booked sales of Rp 723.45 billion ($53.4 million) in the first half of 2017, 11.8 percent lower than in the same period last year. However, its net income expanded by 18.23 percent to Rp 125.96 billion during the period.

"Weak sales in the first half of this year were due to government regulation [that bans sales of alcoholic beverages in minor retailers] and weak purchasing power," Delta marketing director Ronny Titiheruw told reporters in October.

In April 2015, The Trade Ministry issued a regulation that bans convenience stores from selling beverages containing less than 5 percent of alcohol by volume.

Ronny said the regulation still badly affects the alcohol industry and that sales still have not recovered to the level they were in 2014.

According to Industry Ministry data, local production of beverages with alcohol content of less than 5 percent dropped by 24.3 percent to 198.7 million litres in 2015 from 311 million litres in 2014.

Ronny said despite lower revenue the company was still able to increase its net income from improving its operational efficiency.

However, to drive sales even further, Delta plans to expand its export market to Australia and other Asian countries. It is currently in talks with a company in these regions.

"We'll keep increasing our export market. Currently, we're in the process of finding a partner in Australia," Ronny said.

Aside from expanding its export market, the company will also try a new marketing strategy by partnering with national golfer Danny Masrin as a brand ambassador for its San Miguel product range.

Danny signed a one-year partnership deal with Delta in August this year. Under the deal, San Miguel's logo will be printed on Danny's golf outfits until August 2018.

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