Required Report - public distribution

**Date:** 12/4/2006

**GAIN Report Number:** ID6029

ID6029

**Indonesia**

**Exporter Guide**

**Update**

**2006**

**Approved by:**

![](media/image1.wmf)Fred Kessel

U.S. Embassy, Jakarta

**Prepared by:**

Fahwani Y. Rangkuti

**Report Highlights:**

This serves as a practical guide for U.S. food exporters in the
Indonesian market. US exports of consumer--oriented products to
Indonesia increased from \$78.9 million in 2001 to \$169.5 million in
2005. Prospects for further economic growth, the rapid expansion of the
modern supermarket and the food service sectors as well as the food
processor industry are expected to continue to boost demand for imported
products.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Jakarta \[ID1\]

\[ID\]

Table of Contents

[SECTION I. MARKET OVERVIEW 3](#section-i.-market-overview)

[Economic Trends and Outlook 3](#economic-trends-and-outlook)

[Market Opportunities 3](#market-opportunities)

[SECTION II. EXPORTER BUSINESS TIPS
5](#section-ii.-exporter-business-tips)

[Business Customs 5](#business-customs)

[General Consumer Tastes and Preferences
6](#general-consumer-tastes-and-preferences)

[Food Standards and Regulation (FAIRS Report ID6020) & Export
Certificate FAIRS Report (ID6025)
6](#food-standards-and-regulation-fairs-report-id6020-export-certificate-fairs-report-id6025)

[General Import and Inspection Procedures
7](#general-import-and-inspection-procedures)

[SECTION III. MARKET SECTOR STRUCTURE AND TRENDS
7](#section-iii.-market-sector-structure-and-trends)

[A. Retail Sector 7](#a.-retail-sector)

[Market Overview 7](#market-overview)

[Future Trends 9](#future-trends)

[Entry Strategy 9](#entry-strategy)

[Best Market Prospects 10](#best-market-prospects)

[B. HRI Food Service Sector 10](#b.-hri-food-service-sector)

[Market Overview 10](#market-overview-1)

[Future Trends 11](#future-trends-1)

[Entry Strategy 11](#entry-strategy-1)

[Best Market Prospects 11](#best-market-prospects-1)

[C. Food Processing Sector 11](#c.-food-processing-sector)

[Market Overview 11](#market-overview-2)

[Entry Strategy 12](#entry-strategy-2)

[Investment Trends 12](#investment-trends)

[Consumption Trends 12](#consumption-trends)

[Best Market Prospects 13](#best-market-prospects-2)

[D. Distribution System 13](#d.-distribution-system)

[SECTION IV. BEST HIGH-VALUE PRODUCT PROSPECTS
14](#section-iv.-best-high-value-product-prospects)

[APPENDIX I. STATISTICS 19](#appendix-i.-statistics)

[A. KEY TRADE INFORMATION FOR INDONESIA
19](#a.-key-trade-information-for-indonesia)

[B. CONSUMER FOOD & EDIBLE FISHERY PRODUCT IMPORTS
20](#b.-consumer-food-edible-fishery-product-imports)

[C. INDONESIA-TOP 15 SUPPLIERS OF CONSUMER FOODS & EDIBLE FISHERY
PRODUCTS
21](#c.-indonesia-top-15-suppliers-of-consumer-foods-edible-fishery-products)

[APPENDIX II. CALENDAR OF ENDORSED TRADE SHOWS IN INDONESIA
22](#appendix-ii.-calendar-of-endorsed-trade-shows-in-indonesia)

# SECTION I. MARKET OVERVIEW 

## Economic Trends and Outlook

The Indonesian economy grew 5.6 percent in 2005. Growth is expected to
be 5.8 percent in 2006, and 6.3 percent in 2007. The Indonesian economy
must overcome numerous challenges before achieving a sustainable
foundation for long-term growth. Indonesia still faces a lot of
difficulties in its effort to boost its economic growth. The most
serious challenges include a weak banking sector, large public and
private sector debt, widespread corruption, lack of an efficient and
transparent legal system, and competition from other labor-intensive
economies in Asia, especially China and Vietnam. The soaring price of
fuel in March and October 2005 as well as the increase of industry fuel
prices in June 2006 also impacted to the economic situation.

The Government of Indonesia (GOI) plans to create and improve the
investment climate in order to encourage further economic acceleration.
In February 2006, the President issued instructions to the Ministries to
develop regulations divided into five areas, general improvement of the
investment climate, customs and excise, taxation, labor, small and
medium-enterprises and cooperatives, during 2006-2008. However, further
economic growth is hampered by a weak infrastructure, especially a lack
reliable of electrical service.

Significant growth potential exists for U.S. food ingredients. Indonesia
will follow the economic model of shifting towards increased consumption
of processed foods as the economy develops and the population becomes
more urban. Currently, Indonesians spent about 54 percent of their total
expenditures on food. However, due to the large number of Indonesians
with exposure to developed country diet and health concerns foods, there
are a growing number of more sophisticated consumers demanding foods
fortified with vitamins and minerals.

U.S. agricultural exports to Indonesia exceeded \$1 billion in 2003 and
again in 2005. The fiscal year 2006 data showed that Indonesia is the
tenth-largest export market for U.S. agricultural, fish and forestry
products in 2006. The fastest growing segment is consumer oriented
agricultural products.

## Market Opportunities

-   Indonesia\'s population (222 million in 2006) is relatively young
    with half of the population between 15-44 years old. Nearly 58
    percent of the population lives on Java and accounts for 60-65
    percent of the sales of fast moving consumer goods. Java also has
    the best infrastructure although urban areas in Sumatera, Bali, and
    Sulawesi are also developing.

-   It is currently estimated that the upper and middle-income groups
    combine to represent 15 percent of the population, or equal to about
    33 million people. Most of these people live in the major urban
    areas. This population, together with a number of expatriates and
    families working in oil, mining, industrial, finance, and consultant
    companies, consume imported products.

**Table 1. Population number in major urban areas**

+---------------------------------+----------------+------------------+
| **City**                        | **Island**     | **Population**   |
|                                 |                | (million)        |
+---------------------------------+----------------+------------------+
| Jakarta & surrounding           | > Java         | 12.5             |
+---------------------------------+----------------+------------------+
| Surabaya                        | > Java         | 3                |
+---------------------------------+----------------+------------------+
| Yogyakarta & surrounding        | > Java         | 1.8              |
+---------------------------------+----------------+------------------+
| Bandung                         | > Java         | 2                |
+---------------------------------+----------------+------------------+
| Semarang                        | > Java         | 1.3              |
+---------------------------------+----------------+------------------+
| Medan                           | > Sumatera     | 2.1              |
+---------------------------------+----------------+------------------+
| Palembang                       | > Sumatera     | 1.5              |
+---------------------------------+----------------+------------------+
| Makassar                        | > Sulawesi     | 1.5              |
+---------------------------------+----------------+------------------+
| Manado                          | > Sulawesi     | 1                |
+---------------------------------+----------------+------------------+
| Bali                            | > Bali         | 1.6              |
+---------------------------------+----------------+------------------+
| Balikpapan and Samarinda        | > Kalimantan   | 1                |
+---------------------------------+----------------+------------------+

-   The population has become increasingly more literate and Westernized
    during the past decade due to the increase in Indonesians who
    studied and traveled overseas; easier access to international TV;
    expansion of modern malls in major urban areas; and dramatic growth
    of major international hotel and restaurant chains (including fast
    food), and foreign tourist arrivals (5 million in 2005).

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-   Demand for imported ingredients is growing. Food manufacturers are
    continually developing new products to cater to the increasing habit
    of snacking, which is a part of Indonesian culture and promoted in
    the media.

-   The Indonesian consumer is very price conscious and susceptible to
    economic swings, particularly the middle and lower level income
    groups. Customers tend to prefer purchasing imports in smaller, less
    expensive packaging.

-   More urban women are entering the workforce and choosing to stay
    there after marriage and children. With less time available for
    shopping and cooking, more urban women are basing purchasing
    decisions on convenience.

-   The number of kitchen appliances throughout the country is
    relatively low. On average, 19 percent of households have a
    refrigerator (33.7 percent of urban households and 8.1 percent of
    rural households).

-   During holiday seasons consumer spending increases. The most
    important holiday seasons are Ramadan (the month-long Muslim fasting
    period in which food consumption goes up significantly), Lebaran or
    Idul Fitri (Muslim celebration of the end of Ramadan), and Chinese
    New Year. Indonesians consume significantly greater amounts of
    flour, sugar, eggs, baking ingredients, poultry, meat, cheese,
    cakes, cookies, pastries, and fresh and dried fruits during these
    holidays.

-   Even though Christmas is celebrated by less than 10 percent of the
    population, stores take advantage of the season and decorate and
    promote festive foods such as special fruits, sweets and pastries.
    Other western celebrations such as Valentine\'s Day, U.S.
    Independence Day, and Halloween have also become trendy among
    upper-scale restaurants in Indonesia.

+----------------------------------+-----------------------------------+
| **ADVANTAGES AND CHALLENGES      |                                   |
| FACING**                         |                                   |
|                                  |                                   |
| **U.S. PRODUCTS IN INDONESIA**   |                                   |
+----------------------------------+-----------------------------------+
| **Advantages**                   | **Challenges**                    |
+----------------------------------+-----------------------------------+
| Market size - Indonesia has a    | Weak purchasing power of the      |
| population of around 222 million | majority of the population.       |
| people.                          |                                   |
+----------------------------------+-----------------------------------+
| A large expatriate population of | Muslims, who account for 88% of   |
| 17,000 in Indonesia buys         | the population, require           |
| imported goods.                  | halal-certified products.         |
+----------------------------------+-----------------------------------+
| Applied duties on most food and  | Import regulations are often      |
| agricultural products are 5      | complex and non-transparent, thus |
| percent and 10 % on certain      | requiring close business          |
| processed foods during 2006 to   | relationships with a local agent. |
| 2009.                            |                                   |
+----------------------------------+-----------------------------------+
| The distribution system on the   | Infrastructure outside of the     |
| island of Java is improving,     | main island of Java, including    |
| providing increased access to a  | ports and cold storages           |
| population of 129 million.       | facilities, is poorly developed.  |
+----------------------------------+-----------------------------------+
| U.S. food products have a        | Third-country competition remains |
| reputation for quality.          | strong, especially from           |
|                                  | Australia, New Zealand, and       |
|                                  | China. Food product imports from  |
|                                  | Malaysia, Philippines, and        |
|                                  | Thailand are also growing.        |
+----------------------------------+-----------------------------------+
| The food processing industry is  | The availability of import        |
| constantly creating new products | financing remains a problem due   |
| using ingredients that are in    | to complex requirements from      |
| limited supply or unavailable in | cautious banks.                   |
| Indonesia.                       |                                   |
+----------------------------------+-----------------------------------+
| Distribution and availability of | Consumers tend to require smaller |
| imported products is expanding   | package sizes and importers tend  |
| due to the rapid growth of the   | to require smaller shipment       |
| modern supermarket sector,       | sizes, making it difficult for    |
| western restaurant chains, and   | some companies to ship to         |
| bakeries, as well as a           | Indonesia, unless products are    |
| well-developed tourism industry  | transshipped through another      |
| with many hotel chains and       | Asian port or a consolidator is   |
| restaurants.                     | used.                             |
+----------------------------------+-----------------------------------+
| There is a large number of       | Multinational companies with      |
| multinational companies, who     | commissaries tend to be in remote |
| provide imported products        | areas where transportation and    |
| through their commissary         | lack of infrastructure presents   |
| services for their expatriate    | barriers to cost-efficient        |
| staff.                           | distribution of imported food     |
|                                  | products.                         |
+----------------------------------+-----------------------------------+

# SECTION II. EXPORTER BUSINESS TIPS 

## Business Customs

-   It is strongly suggested that a local agent be used for products
    packaged for retail sale. Agents will register imported products in
    order to obtain an import registration (ML) number. Since only an
    importer may obtain a ML number for each product, choosing a local
    agent is a very important decision. Other considerations for agents
    are discussed in the Entry Strategy sections, but principles to keep
    in mind when choosing a local agent are:

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-   Conduct careful, detailed research in order to confirm claims.
    Prospective representatives who claim connections to important
    people should be treated with extreme caution. Such connections are
    not necessary - commercial acumen is of greater value in the market.

-   Do not grant exclusive rights to a local representative until after
    working with them in order to gain a clear under standing of their
    capabilities.

-   Pay attention to accounting standards applied in the preparation of
    reports supporting the financial standing of a potential
    representative or partner.

    -   Most importers also act as distributors and exclusive agents and
        have offices in major cities all over Indonesia.

    -   Support your importer, distributor, and agent by maintaining
        product quality. Educate them, the retailer, and the consumer
        about your product. Exporters should not assume that Indonesian
        companies know how to promote, handle, and prepare imported
        products. Food processors often require assistance developing
        products using imported food ingredients.

    -   Market research, especially for product testing, price
        comparison, and adjusting the product for local tastes is
        important. Importers, distributors, and retailers can help with
        market research as well as understanding government regulations,
        which is critical.

    -   While quality and price are important, they are secondary to the
        personal interaction with business partners. Face-to-face
        meetings are very important to Indonesians, though younger
        importers are more comfortable with establishing their
        relationships via electronic communication. Exporters usually
        must visit Indonesia 2-3 times before details are finalized.

    -   One place to start if considering exporting to Indonesia is
        Singapore. Shipments to Indonesia and Singapore can be combined
        and first sent to Singapore. The Indonesian market tends to
        require smaller shipment sizes than may be cost-effective to
        send to Asia and shipping times from Singapore are short.
        Singaporean agents, importers, distributors, and retailers are
        sophisticated and understand the Indonesian market well.

    -   Product should be packed and shipped for a tropical climate and
        have clear storage instructions. Few cold storage or
        air-conditioned facilities and delivery trucks exist. Sometimes
        stores turn off cold storage facilities at night to conserve
        energy.

## General Consumer Tastes and Preferences

-   Lunch and dinner usually consists of rice with two or three meats or
    fish along with vegetable dishes prepared according to various
    ethnic styles. There is a general tendency to consume a large
    portion of fresh produce, often bought on the day of consumption.
    Religious affiliation affects food consumption. Most Muslims do not
    eat pork, and only eat beef and poultry products that have been
    certified halal.

-   Indonesian consumers are attracted to branded products, though they
    are not brand loyal. Indonesians easily change from one brand to
    another if the product is promoted and competitively priced. Since
    the average Indonesian spends half of their income on food, they
    tend to be price sensitive. As a result, imitation brands are
    common.

## Food Standards and Regulation (FAIRS Report ID6020) & Export Certificate FAIRS Report (ID6025)

-   According to Indonesian regulations, imported products packaged for
    retail sale must be registered with the National Agency for Drug and
    Food Control to obtain a ML number. The registration process can be
    lengthy, bureaucratic, and costly, so it is best to use a local
    agent.

-   Food labeling is required. The government is currently in the
    process of implementing new food labeling guidelines. Halal
    certification and labeling is not required at this time but these
    guidelines are also under review. Given that more than 88 percent of
    the population professes the Islamic faith, it is highly recommended
    that a halal certification be obtained. The U.S. Islamic Center
    approved by Indonesian Muslim Council (MUI) must issue halal
    certificates.

-   All beef and poultry products must be certified halal and the
    products must originate from slaughterhouses, which have been
    inspected and approved by Indonesian veterinary (DG Livestock) and
    religious authorities (MUI). Also, each imported meat shipment
    requires prior approval by the Ministry of Agriculture. U.S. beef is
    still banned due to BSE. The Indonesian government does not permit
    import of U.S. poultry parts.

## General Import and Inspection Procedures

-   Since April 1977, the Customs Directorate of the Ministry of Finance
    has operated a post --entry audit system, which relies primarily on
    verification and auditing rather than inspection to monitor
    compliance. Problems occur regarding the customs procedures and
    valuation made by the Indonesian Customs and the irregular and
    non-transparent fees required getting shipments released.

-   Indonesia\'s bound tariff rates on major food and agricultural items
    generally range from 5 to 40 percent. In December 2005, GOI issued
    its second--phase program for harmonizing tariffs of import duty in
    2005-2010. The import duties for several processed food products
    increased to 10 and 15 percent. The major exception is that the duty
    applied to all imported alcoholic beverages decreased to 150
    percent.

-   The government levies a 10 percent value-added tax on the sale of
    all domestic and imported goods. A luxury tax ranging from 10
    percent to 75 percent is also levied on certain products. For
    imports, these taxes are collected at the point of import and are
    calculated based on the landed value of the product, including
    import duties. Sales tax is 2.5 percent and excise for alcoholic
    beverage & alcoholic concentrate ranges between Rp.
    2,500-50,000/liter, depending on the percentage of ethyl alcohol
    content.

# SECTION III. MARKET SECTOR STRUCTURE AND TRENDS 

## A. Retail Sector

### Market Overview

Modern retail outlets in urban areas with refrigeration and storage
facilities provide good prospects for imported U.S. food products. In
major urban areas throughout Indonesia traditional markets are being
replaced by modern hypermarkets, supermarkets, and mini markets. At
present, many large retailers are engaged in major expansion projects
including foreign retail giants such as Carrefour, Giant, Makro, and
Lion Superindo (Delhaize group), who compete with national and local
retail chains.

**Table 2. Number of Modern Retail Outlets (rounded)**

  -------------------------- -------------- ---------------- --------------
  **Description**            **2003**       **2004**         **2005**

  Supermarket                900            1,000            1,140

  Hypermarket                40             70               80

  Wholesale                  20             20               20

  Mini market                4,040          5,600            6,270

  Convenience store          100            150              130

  Traditional store          1,745,590      1,745,590        1,874,470
  -------------------------- -------------- ---------------- --------------

Source: AC Nielsen

Traditional markets, modest kiosks, and street vendors are still
entrenched, even in major urban areas. These usually sell traditional
products made in homes. Most are made from local products, though
soybeans, for tempe and tofu; and beef offal, for bakso meatballs, are
usually imported. Small-scale vendors also account for eighty percent of
soft drink product sales.

**Table 3. Market Share of Modern Retail and Wet Market (%)**

  ---------------------------- --------------------- ---------------------
  **Year**                     **Modern Outlets**    **Wet Market**

  2000                         21.8                  78.1

  2001                         24.8                  75.2

  2002                         25.1                  74.8

  2003                         26.3                  73.7

  2004                         30.4                  69.6

  2005                         32.4                  67.6

  2006 (est.)                  34.0                  66.0
  ---------------------------- --------------------- ---------------------

Source: AC Nielsen

**Table 4. Sales of soft drink products by small-scale vendors in 2005**

  ------------------------------ ------------ ----------- --------------- -------------
  **Products**                   **Volume**   **Value**   **Volume growth 
                                 (million     (Billion    (%)**           
                                 liter)       Rp.)                        

                                                          **2004/2005**   **Annual
                                                                          2005-2010**
                                                                          (est.)

  Bottled Water                  10,130       8,580       11.0            5.7

  Asian specialty drinks         820          4,550       6.4             7.1

  Ready to drink teas            770          4,180       6.0             7.0

  Carbonates                     610          3,850       2.8             3.4

  Sports drinks                  140          2,110       24.2            17.5

  Concentrate                    60           3,270       5.0             3.5

  Fruit-flavored drinks (no      40           110         20.0            16.1
  juice content)                                                          

  Fruit and vegetable juices     30           300         14.9            12.9
  ------------------------------ ------------ ----------- --------------- -------------

Source: Euromonitor

Most supermarkets, hypermarkets, and wholesalers buy their imported
fresh fruit, meat, and other processed food from distributors or agents.
Some import perishable products, which can be imported by multiple
agents directly from foreign suppliers. This trend is expected to expand
in the near future. For some national chain outlets, it is easier to
purchase some items locally rather than have products purchased and
shipped from headquarters in Jakarta. Private label in the form of
repacking bulk products such as flour, sugar, rice, mungbean, peanuts
and egg, can be found in foreign and national chain outlets.

Retail growth for packaged foods in 2005 ranged from 3-20 percent in
volume terms compared to 2004 and is expected to range from 0.5 --18
percent each year during 2005 to 2010. Meal replacement products,
including pasta, baby food, and frozen, dried, chilled, and processed
food will grow above 10 percent.

**Table 5: Retail & Food Service Sales of Package Food in 2005 (Values
in Trillion Rp)**

  ------------------------------------------ ------------ ------------ -----------
  **Product**                                **Food       **Retail**   
                                             Service**                 

                                             **Volume**   **Volume**   **Value**

  Dried processed food (000 ton)             1,700        4,700        24,800

  Bakery products (000 ton)                  600          800          13,400

  Dairy products (000 ton)                   200          600          12,700

  Noodles (000 ton)                          200          1,000        10,400

  Confectionery (000 ton)                    6            160          8,800

  Sweet and savory snacks (000 ton)          66           240          5,900

  Oils and fats (000 ton)                    600          500          5,400

  Baby food (000 ton)                        0            70           4,600

  Sauces, dressings and condiments (000 ton) 200          230          3,500

  Ice cream (000 liter)                      38,600       73,500       1,800

  Frozen processed food (000 ton)            4            32           1,600

  Canned & preserved food 000 ton)           3            40           1,200

  Others (Meal replacement products, ready   6            23           1,100
  meals, soup, pasta, chilled processed                                
  food, spreads) (000 ton)                                             
  ------------------------------------------ ------------ ------------ -----------

Source: Euromonitor

### Future Trends

In the near future, recently developed patterns of consumer behavior are
expected to continue such as a preference for shopping at the
supermarket and modern outlets due to comfortable shopping space, a
complete range of goods, consistent quality of products, competitive
price, good service, and easy accessibility. Consumers are adjusting to
paying higher prices for imported and local food products. However since
most spend a significant portion of their income on food, the average
Indonesian consumer is not a significant buyer of imported products due
to their low purchasing power relative to the cost of imported items.
They will remain very selective in their product purchases. They will be
looking for branded products they see advertised at prices they can
afford. There is growing interest in the nutritional aspects of food
products. Women working outside of their home and exposed to
international foods will be interested in ready-to-cook and ready-to-eat
foods.

### Entry Strategy

The volume of specific imported products is relatively small when
compared to the size of the country. The best way to overcome the
hurdles associated with exporting to Indonesia is to select an agent. An
agent should be chosen based on his ability to assure the widest
distribution of products and the ability to undertake the marketing
efforts necessary to create awareness for products among consumers. The
agent will also be responsible for obtaining a ML number.

Depending on the product and intended market, appointing a supermarket
as agent and exclusive distributor is best, particularly for gourmet and
specialty upscale products not likely to generate sufficient volume.
Nevertheless before the decision is made, initial sales efforts to
Indonesia should include visits with potential agents as well as with
key retailers to determine the best local partners.

### Best Market Prospects

Best market prospects for U.S. suppliers include fresh fruit, beef
offal, frozen french fries, frozen vegetables, snack foods
(confectionery, potato chips, popcorn), canned foods, sauces and
seasonings, and salad dressings. Niche markets exist for frozen meat and
poultry, delicatessen items, cooking and salad oils, breakfast cereals,
pasta, tomato paste, and non-alcoholic beverages.

## B. HRI Food Service Sector

### Market Overview 

Indonesia's HRI sector is extremely diverse, consisting of hotels and
restaurants that serve local and international cuisine, fast food
outlets, clubs, small restaurants, street stalls known as warungs, and
hawkers that sell food to customers on the street. Catering operations
serve airlines, factories, private social functions, cruise and military
ships, mining and oil operations, prisons, and hospitals. The sector is
concentrated in the urban areas, with Jakarta having the highest number
of food service outlets, followed by Surabaya, Bandung, Bali, Medan, and
Makassar.

In the HRI sector, four and five-star hotels catering to the tourist
industry and up-scale restaurants specializing in Western and other
non-Indonesian foods are the dominant users of imported food products.
Local caterers and restaurants tend to purchase local products.

The number of foreign tourists remains stable. Bali remains the most
visited tourist destination in Indonesia. Singapore, Japan, Malaysia,
Australia, Taiwan, and South Korea account for the highest tourist
arrivals by nationality during 2000-2005

**Table 6. Indonesian Tourism Indicators** (from foreign and domestic
destinations)

  ------------------------- ---------- ---------- ---------- ---------- ----------
  **Description**           **Year**                                    

                            **2001**   **2002**   **2003**   **2004**   **2005**

  No. of tourists (foreign  5.2        5.0        4.5        5.3        5.0
  destination only) (mil)                                               

  Revenue (US \$mil)        5,396      4,306      4,037      4,798      4,522

  Length of stay (days)     10.5       9.8        9.7        9.5        9.0

  Occupancy Rate (%)        45         44         45         45         46

  Number of hotel rooms     260,000    260,000    263,000    273,000    280,000
  ------------------------- ---------- ---------- ---------- ---------- ----------

Source: Central Bureau of Statistic-Indonesia

The expansion of franchise restaurants such as fast food, casual dining
café's, international and family style restaurants, and food courts is
expected to increase demand for imported food products. International
franchise outlets have a relatively strong presence; local restaurant
and bakery franchise outlets are also rapidly increasing. The number of
restaurants has increased in conjunction with the proliferation of new
shopping malls and office buildings in recent years. Western style fast
food outlets purchase imported food, but the variety is limited to such
items as frozen french fries, mozzarella cheese, and condiments.
Restaurants serving noodles, Japanese food, pizza, fried chicken, and
bakery products outlets and coffee are prominent, and tend to use
imported frozen potato products, dressings, sauces, whipping cream,
bakery products, and a variety of coffee ingredients, such as creamer,
honey, and flavorings. Most Korean restaurants in Jakarta prefer to
serve U.S. beef. Local restaurants offering traditional food use beef
offal.

Caterers are mainly small to medium-sized private enterprises that serve
factories, mining and oil operations, offices, schools, hospitals,
company events, private social functions, and weddings. Imported
products used by caterers tend to be beef offal, fresh fruit,
vegetables, dressings, and bakery ingredients.

Away-from-home eating is becoming a common activity across all levels of
income. About 28 percent of the population eats at fast food restaurants
at least once a week. In addition to more eating lunch out while at
work, the change to a more westernized life style and increased income
levels has contributed to more Indonesians dining out with peers in
standard Western food service outlets and visiting shopping malls for
recreation during the weekend. Eating out as a family every weekend is
done by a smaller number, but is becoming increasingly popular.

### 

### Future Trends

Travel warnings from several foreign countries for security reasons have
not severely impacted the number of individual tourist arrivals,
meetings, conferences, or exhibitions. Though the number of foreign
tourists should increase, the customer base for most of the HRI trade is
expected to shift to a higher percentage of Indonesian customers due to
domestic airfare prices becoming more competitive in the past three
years. This has led many in the HRI sector to focus more on Indonesian
customers, who tend to be more price conscious. In 2006 tourist arrivals
are expected to reach 6.6 million.

### Entry Strategy

The need for a local agent applies when selling to the HRI trade in
Indonesia. A reputable importer or distributor can represent imported
products and obtain the import licenses and have knowledge of customs
clearance procedures required to successfully bring in products.

Jakarta and Bali remain the ideal locations to target. These cities have
a large number of five star hotels and up-scale restaurants that
purchase imports to cater to a sizeable expatriate community and a large
numbers of foreign visitors.

### Best Market Prospects

Best market prospects for U.S. suppliers include duck, and turkey,
seafood, french fries, bakery ingredients, sauces and seasonings, oil
and vinegars, cereals, canned seafood, canned food, fresh fruits, soft
drinks, juices, tree nuts, ice cream, snacks, beer, reasonably-priced
wines, liquor, and beef, beef liver, heart, and prime rib.

## C. Food Processing Sector

### Market Overview

Indonesia offers significant market potential for U.S. suppliers of food
and agricultural ingredients for the local food-processing sector.
Indonesian's food and beverage processing industry is comprised of about
4,700 businesses and over 900,000 home-based producers that sell in
traditional warungs or as street vendors. Large-scale food processors
use halal-approved production methods and have certificates approved by
MUI.

The growth of the food-processing sector can be attributed to the
introduction of new food products, aggressive promotional activities,
growth of modern retail outlets, customer sophistication, and growing
health consciousness. In the future, more consumers are expected to make
purchasing decisions based on health and wellness concerns and mostly in
the form of fortified foods. Currently, noodle and dairy products
account for 91 percent of health and wellness packaged foods. However,
sales of sports drinks are also expected to grow. The variety offered in
packaged foods has also increased in the last few years. This includes
frozen poultry and seafood products, sugar confectionery, instant
noodles, savory snacks, dairy drinks, and soft drinks. Fruit-flavored
water drinks are popular because the price is only a little more than
bottled water.

Soybean based products, such as tofu, tempe, and soy milk as a
multi-functional health drink packed in a transparent plastic bag, are
produced in homes and sold in the traditional warungs, by street food
vendors, or door to door. Beef heart is also popular among these sectors
for use in making meatballs to be sold also by traditional warungs and
by street food vendors.

### Entry Strategy

Primary imports for food processing such as, frozen beef offal, wheat,
and skim milk powder are most commonly imported directly by the food
processor. Essential complementary inputs such as flavorings or
preservatives are usually bought from a local importing agent because
they are used in smaller quantities and often have limited shelf life.

Food processors who depend on a consistent supply of a product may have
an exclusive sales agreement with a local agent. Some companies may
choose to act as importers if they find a better-priced alternative such
as an exporter who uses Singapore as a distribution point.

Many multinational food processors operating in Indonesia must follow
global product specifications. These companies have central purchasing
offices, often in the United States or in Europe.

### Investment Trends

The AFTA (ASEAN Free Trade Agreement) zone, which gives favored
treatment to regional production, will create further competition from
ASEAN members, but may offer some opportunities for U.S. suppliers as
well. AFTA will make it easier for food processors based in one ASEAN
country with good supporting investment facilities to distribute its
products to neighboring countries. U.S. food ingredients suppliers
should be able to ship food ingredient products in larger volumes to
Asia and then transship to other countries that require smaller
quantities, such as Indonesia.

The challenges Indonesian manufacturers continue to face are high
electricity and fuel prices, increasing labor costs, lack of
infrastructure, and cheaper finished products from neighboring ASEAN
countries and China.

A new trend among Indonesian package food and candy manufacturers is to
contract manufacturing out to processors on mainland China to avoid high
production and raw material costs, such as labor and sugar.

### Consumption Trends

The majority of consumers are price conscious. Out of the 54 percent of
income spent on food, only 11 percent is spent on processed food and
beverages, though this represents about US \$8.7 billion annually. To
address consumer price concerns, producers are providing smaller package
sizes, no-frill products, and taking cost-cutting measures.

### Best Market Prospects

Best market prospects include food-use soybeans, beef, dairy products,
flavorings, processed poultry products, processed potato products, fruit
concentrates, bakery ingredients, and wheat flour-based food products as
an alternative to rice for use in processing noodle and baked goods.

## D. Distribution System

The distribution system is complex due to the widespread and diverse
nature of the country with its thousands of islands. In many cases, the
infrastructure is insufficient to handle refrigerated products,
especially outside of the cities and the island of Java. There are only
a few national distributors who service the whole country. Most agents
and distributors have a local reach, so there are hundreds of
wholesalers and millions of retailers.

Inadequate ports is the single largest and most consistent complaint in
every province among all levels of the distribution system. Ports have
shallow drafts, which require smaller ships, inadequate loading and
unloading facilities resulting in frequent congestion, unreliable
shipping schedules, and an inadequate number of smaller ships serving
eastern Indonesia, particularly during periods of bad weather. As a
result, there are frequent shortages and firms hold higher than desired
inventories, with the accompanying higher costs.

Imported products that enter the Indonesian market often move to a
distributor or agent, who in turn, sells them directly to modern retail
outlets. Delivery of the products may be directly to the stores or to
the warehousing facilities of the retailer. Only a few retailers buy
directly from foreign suppliers and assume responsibility for logistical
functions. Major food processors tend to import directly while smaller
operations tend to buy through local agents.

The trade in fresh fruit differs from that of other consumer-ready food
products. Fresh fruit imports are dominated by trading houses that
specialize in fruit. For example, it is not unusual for one importer to
carry such items as meat, poultry, french fries, and confectionary
ingredients and deliver them directly to the retailer. On the other
hand, fresh fruit will change hands several times before reaching the
consumer, usually at the wet market or curbside fruit stands.

The poor distribution system makes it difficult for restaurants and
retailers to get a consistent supply of quality food products. Sometimes
distributors sell outdated products that were purchased inexpensively or
a frozen product that was not stored correctly and later refrozen. In
addition, restaurants and retailers must deal with a large number of
distributors since most of the distributors carry only a handful of
products or carry a limited supply.

# SECTION IV. BEST HIGH-VALUE PRODUCT PROSPECTS 

Best market prospects for imported product, as identified by the FAS
Jakarta based Global Trade Data report is as follows:

+-------+------+---------+------+--------+------------+--------------+
| **Pr  | **20 | *       | **2  | **     | **Key      | **Market     |
| oduct | 05** | *2005** | -Yr. | Import | C          | At           |
| Categ |      |         | Avg  | Tariff | onstraints | tractiveness |
| ory** | **   | *       | Annu | R      | to Market  | for USA**    |
|       | Impo | *Import | al** | ates** | Dev        |              |
|       | rt** | from US |      |        | elopment** |              |
|       |      | (\      | **Im |        |            |              |
|       | **(  | $mil)** | port |        |            |              |
|       | \$mi |         | Grow |        |            |              |
|       | l)** |         | th** |        |            |              |
+-------+------+---------+------+--------+------------+--------------+
| Dairy | 536  | 61      | 39%  | 5%     | C          | Demand for   |
| Pro   |      |         |      | except | ompetition | dairy        |
| ducts |      | (Mainly |      | Yogurt | from       | processor    |
| excl  |      | Non fat |      | &      | Australia  | and food &   |
| c     |      | dry     |      | SCM -  | and New    | beverage     |
| heese |      | milk,   |      | 10%    | Zealand    | industries   |
|       |      | L       |      | during |            | are          |
|       |      | actose, |      | 200    |            | increasing   |
|       |      | whey)   |      | 6-2009 |            |              |
+-------+------+---------+------+--------+------------+--------------+
| Fresh | 212  | 38      | 8%   | 5%     | C          | Health       |
| fruit |      |         |      | except | ompetition | awareness    |
|       |      | (Mainly |      | ma     | from China | pushes the   |
|       |      | Apples  |      | ndarin | and        | demand of    |
|       |      | &       |      | 25%    | Australia, | the quality  |
|       |      | Grapes) |      |        | recent     | fresh        |
|       |      |         |      |        | r          | products     |
|       |      |         |      |        | egulations |              |
|       |      |         |      |        | inhibit US |              |
|       |      |         |      |        | imports    |              |
+-------+------+---------+------+--------+------------+--------------+
| Other | 328  | 30      | 33%  | 5%     | C          | Food service |
| con   |      |         |      |        | ompetition | and food     |
| sumer |      | (Mainly |      |        | from       | processors   |
| ori   |      | food    |      |        | China,     | need more    |
| ented |      | prep,   |      |        | Ne         | and          |
| food  |      | canned  |      |        | therlands, | consistent   |
| pro   |      | food,   |      |        | Malaysia,  | supply       |
| ducts |      | coffee, |      |        | and        | products due |
|       |      | and     |      |        | Thailand   | to growth    |
|       |      | g       |      |        |            |              |
|       |      | elatin) |      |        |            |              |
+-------+------+---------+------+--------+------------+--------------+
| Red   | 77   | 11      | 34%  | 5%     | C          | Prime beef   |
| meats |      |         |      |        | ompetition | for high-end |
| f     |      | (Mainly |      |        | from       | restaurants  |
| resh, |      | B       |      |        | Australia  | and offal    |
| chi   |      | oneless |      |        | and New    | for lower to |
| lled, |      | beef,   |      |        | Zealand,   | mid-class    |
| f     |      | liver,  |      |        | ban of US  | food service |
| rozen |      | heart,  |      |        | beef due   | industry     |
|       |      | frozen) |      |        | to BSE     |              |
+-------+------+---------+------+--------+------------+--------------+
| Proc  | 53   | 16      | 13%  | Mostly | C          | Increased    |
| essed |      |         |      | 5% 10% | ompetition | consumption  |
| fruit |      | (Mostly |      | for    | from       | of fruit     |
| &     |      | onion   |      | pro    | China, New | juice due to |
| Veget |      | powder, |      | cessed | Zealand,   | health       |
| ables |      | potato  |      | fruit  | Canada,    | awareness    |
|       |      | flakes, |      | and    | and        |              |
|       |      | French  |      | juice  | Australia  |              |
|       |      | fries)  |      | during |            |              |
|       |      |         |      | 200    |            |              |
|       |      |         |      | 6-2009 |            |              |
+-------+------+---------+------+--------+------------+--------------+
| Snack | 49   | 1       | 24%  | 5%     | C          | The          |
| food  |      |         |      |        | ompetition | development  |
| excl  |      | (Mainly |      |        | from       | of the       |
| nuts  |      | confec  |      |        | China,     | retail       |
|       |      | tionary |      |        | Malaysia,  | industry     |
|       |      | &       |      |        | Italy,     | push the     |
|       |      | potato  |      |        | Thailand,  | consumption  |
|       |      | chips)  |      |        | UK,        | of quite a   |
|       |      |         |      |        | Ph         | lot of snack |
|       |      |         |      |        | ilippines, | food         |
|       |      |         |      |        | Sw         | products     |
|       |      |         |      |        | itzerland, |              |
|       |      |         |      |        | Australia  |              |
+-------+------+---------+------+--------+------------+--------------+
| Tree  | 3    | 2       | 48%  | 5%     | C          | Fast-growing |
| nuts  |      |         |      |        | ompetition | bakery       |
|       |      | (Mostly |      |        | from       | industry     |
|       |      | A       |      |        | Australia  | needs        |
|       |      | lmonds) |      |        | and China  |              |
+-------+------+---------+------+--------+------------+--------------+
| Pet   | 6    | 2       | 26%  | 5%     | C          | Demand       |
| foods |      |         |      |        | ompetition | exists for   |
|       |      | (Mostly |      |        | from       | niche market |
|       |      | dog &   |      |        | Thailand   |              |
|       |      | cat     |      |        | and        |              |
|       |      | food)   |      |        | Australia  |              |
+-------+------+---------+------+--------+------------+--------------+
| Fish  | 35   | 3       | 52%  | 5%     | C          | High-end     |
| & Sea |      |         |      | except | ompetition | restaurants  |
| food  |      | (Mostly |      | fish   | from Japan | need         |
|       |      | crab,   |      | can    | and Norway | non-tropical |
|       |      | crab    |      | ning - |            | seafood      |
|       |      | meat, & |      | 10%    |            | products     |
|       |      | other   |      | during |            |              |
|       |      | s       |      | 200    |            |              |
|       |      | eafood) |      | 6-2009 |            |              |
+-------+------+---------+------+--------+------------+--------------+

**SECTION V. KEY CONTACTS AND FURTHER INFORMATION**

+------------+------------+------------------+-----------+-----------+
| **         |            |                  |           |           |
| Government |            |                  |           |           |
| of         |            |                  |           |           |
| Indonesia  |            |                  |           |           |
| Contacts   |            |                  |           |           |
| for Food & |            |                  |           |           |
| Beverage   |            |                  |           |           |
| Control**  |            |                  |           |           |
+------------+------------+------------------+-----------+-----------+
| **Orga     | **Contact  | **Address**      | **Phone** | **Fax**   |
| nization** | Person**   |                  |           |           |
+------------+------------+------------------+-----------+-----------+
| POM        | DR.        | Jl. Percetakan   | 62-21-    | 62-21     |
| (National  | Husniah    | Negara 23,       | 424-4688; | -425-0764 |
| Agency for | Rubiana    | Jakarta Pusat,   | 424-3605  |           |
| Drug and   | Thamrin    | Indonesia        |           |           |
| Food       | Akib, MS., |                  |           |           |
| Control)   | M.Kes,     |                  |           |           |
|            | SpFk       |                  |           |           |
+------------+------------+------------------+-----------+-----------+
| Ministry   | Ir. Mathur | Central Office   | 62-21     | 62-21     |
| of         | Riady, MA  | of Agriculture,  | -781-5580 | -781-5581 |
| A          | --         | , C Bld, 6^th^   |           |           |
| griculture | Director   | Floor,           |           |           |
| -          | General    | Departemen, Jl.  |           |           |
| Department |            | Harsono R.M.     |           |           |
| of         |            | No.3, Jakarta    |           |           |
| Agr        |            | 12550, Indonesia |           |           |
| iculture-D |            |                  |           |           |
| irectorate |            |                  |           |           |
| General of |            |                  |           |           |
| Livestock  |            |                  |           |           |
| Services   |            |                  |           |           |
+------------+------------+------------------+-----------+-----------+
| Ministry   | Ir. Syukur | 1^st^ Floor,     | T: 62-21  | F:        |
| of         | Iwantoro,  | Building E, Jl.  | 781-6481, | 6         |
| A          | MS., MBA   | Harsono RM. No.  | 780-5641  | 2-21-781- |
| griculture | --         | 3, Ragunan,      | to 44 ext | 6481/6483 |
| -- Agency  | Director   | Jakarta 12550    | 1103      |           |
| for        | General.   |                  |           | <sy       |
| Ag         |            |                  |           | ukur@dept |
| ricultural |            |                  |           | an.go.id> |
| Quarantine |            |                  |           |           |
+------------+------------+------------------+-----------+-----------+
| **         |            |                  |           |           |
| Indonesian |            |                  |           |           |
| Trade      |            |                  |           |           |
| A          |            |                  |           |           |
| ssociation |            |                  |           |           |
| Contact    |            |                  |           |           |
| List**     |            |                  |           |           |
+------------+------------+------------------+-----------+-----------+
| APRINDO    | Mr.        | E-Trade          | 62-21-    | 62-21-    |
| (          | Handaka    | Building, 3^rd^  | 315-4241; | 3192-3267 |
| Indonesian | Santosa,   | Floor, Jl. Wahid | 392-8545  |           |
| Retail     | Ketua      | Hasyim No.55.    |           | <a        |
| Merchants  |            | Jakarta 10350,   |           | prindo@cb |
| As         | Satria     | Indonesia        |           | n.net.id> |
| sociation) | Hamid      |                  |           |           |
|            | Ahmadi S.  |                  |           |           |
|            | --         |                  |           |           |
|            |            |                  |           |           |
|            | Kep. Secr. |                  |           |           |
+------------+------------+------------------+-----------+-----------+
| ASIBSINDO  | Drs.       | Plaza Dwima I,   | 62-21     | 62-21     |
| (          | H          | Lt IV            | -420-6544 | -420-6544 |
| Indonesian | endrawan - |                  |           |           |
| Fruit &    | Chairman   | Jl. Jend. A.     |           | <k        |
| Vegetables |            | Yani Kav 67      |           | ahansamit |
| Importers  |            |                  |           | rabuana@y |
| As         |            | Jakarta Pusat    |           | ahoo.com> |
| sociation) |            |                  |           |           |
+------------+------------+------------------+-----------+-----------+
| ASPIDI     | Mr. Thomas | Jl. Ciputat Raya | 62-21-    | 62-21-    |
|            | Sembiring, | No. 351,         | 7279-3417 | 7279-3419 |
| (A         | President  | Kebayoran Lama,  | &         |           |
| ssociation |            | Jakarta 12240    | 7279-3409 | [asp_1    |
| of         |            |                  |           | 984@cbn.n |
| Indonesian |            |                  |           | et.id]{.u |
| Meat       |            |                  |           | nderline} |
| Importers) |            |                  |           |           |
+------------+------------+------------------+-----------+-----------+
| Indonesian | Hendri     | Jl. Cipinang     | 62-21     | 62-21     |
| Fish       | Su         | Indah Raya No.   | -819-6910 | -850-8587 |
| Cannery    | tandinata, | 1, Jakarta       |           |           |
| A          | MBA,       | 13420, Indonesia |           |           |
| ssociation | Chairman   |                  |           |           |
+------------+------------+------------------+-----------+-----------+

+------------+------------+------------------+-----------+-----------+
| **         |            |                  |           |           |
| Indonesian |            |                  |           |           |
| Trade      |            |                  |           |           |
| A          |            |                  |           |           |
| ssociation |            |                  |           |           |
| Contact    |            |                  |           |           |
| List       |            |                  |           |           |
| (cont.)**  |            |                  |           |           |
+------------+------------+------------------+-----------+-----------+
| **Orga     | **Contact  | **Address**      | **Phone** | **Fax**   |
| nization** | Person**   |                  |           |           |
+------------+------------+------------------+-----------+-----------+
| IPS (Dairy | Mr.        | Wisma            | 62-21-    | 62-21-    |
| Processor  | Sabana,    | Nestle,5^th^ .   | 7883-6000 | 7883-6001 |
| As         | Director & | Arcadia Office   | ext 1501  |           |
| socaition) | Mr.        | Park, Jl. Letjen |           |           |
|            | Syahlan    | T.B. Simatupang  |           |           |
|            | Siregar    | Kav 88, Jakarta  |           |           |
|            | (          | 12520            |           |           |
|            | Secretary) |                  |           |           |
+------------+------------+------------------+-----------+-----------+
| GAPMMI     | Ir. Thomas | Building F,      | 62-21-703 | 62-21     |
| (          | Dharmawan  | 2^nd^ Floor,     | 2-2626/27 | -780-4347 |
| Indonesian | --         | Room 224A        |           |           |
| Food &     | Executive  |                  |           | <gapm     |
| Beverage   | Director   | Ministry of      |           | mi@indosa |
| As         |            | Agriculture      |           | t.net.id> |
| sociation) |            |                  |           |           |
|            |            | Jl. Harsono RM   |           |           |
|            |            | No. 3            |           |           |
|            |            |                  |           |           |
|            |            | Jakarta 12550    |           |           |
+------------+------------+------------------+-----------+-----------+
| Indonesian | Ir.        | IBA Building,    | 62-21     | 62-21     |
| Cold Chain | Hasanuddin | 2^nd^ Floor, Jl. | -797-2311 | -797-2519 |
| A          | Yasni, MM  | Raya Pasar       |           |           |
| ssociation | Executive  | Minggu No. 2     |           | <ar       |
| (          | Director   | B-C, Pancoran,   |           | pi@arpion |
| ARPI/Assoc |            | Jakarta 12780    |           | line.org> |
| Rantai     |            |                  |           |           |
| Pendingin  |            |                  |           | <hsyas    |
| Indonesia) |            |                  |           | ni@arpion |
|            |            |                  |           | line.org> |
+------------+------------+------------------+-----------+-----------+

+---------------+-----------+-------------+-------------+------------+
| **U.S.        |           |             |             |            |
| Cooperator    |           |             |             |            |
| and MAP       |           |             |             |            |
| P             |           |             |             |            |
| articipants** |           |             |             |            |
+===============+===========+=============+=============+============+
| **O           | **Contact | **Address** | **Phone**   | **Fax**    |
| rganization** | Person**  |             |             |            |
+---------------+-----------+-------------+-------------+------------+
| AgriSource    | Tim       | A           | (66-2)      | (66-2)     |
| Co., Ltd      | Welsh,    | mbassador's | 251-8655 /6 | 251-0390   |
|               | Managing  | Court,      |             |            |
| Regional      | Director  | 4^th^       |             | E-mail:    |
| r             |           | Floor, No.  |             | [agsou     |
| epresentative |           | 416, 76/1   |             | rce@loxinf |
| for USA Dry   |           | Soi Lang    |             | o.co.th]{. |
| Peas, Lentils |           | Suan,       |             | underline} |
| & Chickpeas   |           | Ploenchit   |             |            |
|               |           | Road,       |             |            |
|               |           | Bangkok,    |             |            |
|               |           | Thailand    |             |            |
|               |           | 10330       |             |            |
+---------------+-----------+-------------+-------------+------------+
| Lieu          | Richard   | \# 08-22    | 6           | 65         |
| Marketing     | Lieu,     | Block 3,    | 5-6278-3832 | -6278-4372 |
| Assoc. Pte.   | Director  | Alexandra   |             |            |
| Ltd Regional  |           | Distripark, |             | E-mail:    |
| r             |           | Pasir       |             | [gabar     |
| epresentative |           | Panjang     |             | ic@singnet |
| for:          |           | Road,       |             | .com.sg]{. |
| California    |           | Singapore   |             | underline} |
| Pistachio     |           | 118483      |             |            |
| Commission,   |           |             |             |            |
| California    |           |             |             |            |
| Table Grape   |           |             |             |            |
| Commission,   |           |             |             |            |
| California    |           |             |             |            |
| Tree Fruit    |           |             |             |            |
| Agreement,    |           |             |             |            |
| Pear Bureau   |           |             |             |            |
| Northwest,    |           |             |             |            |
| Raisin        |           |             |             |            |
| A             |           |             |             |            |
| dministrative |           |             |             |            |
| Committee,    |           |             |             |            |
| United States |           |             |             |            |
| Potato Board, |           |             |             |            |
| Wine          |           |             |             |            |
| Institute of  |           |             |             |            |
| California,   |           |             |             |            |
+---------------+-----------+-------------+-------------+------------+

+---------------+-----------+-------------+-------------+------------+
| **U.S.        |           |             |             |            |
| Cooperator    |           |             |             |            |
| and MAP       |           |             |             |            |
| Participants  |           |             |             |            |
| (cont.)**     |           |             |             |            |
+===============+===========+=============+=============+============+
| **O           | **Contact | **Address** | **Phone**   | **Fax**    |
| rganization** | Person**  |             |             |            |
+---------------+-----------+-------------+-------------+------------+
| Peka Consult, | Kafi      | Jl. Kemang  | (62-21)     | (62-21)    |
| Inc.          | Kurnia,   | Raya No. 1, | 721-1358    | 721-1357   |
|               | Leonard   | Jakarta,    |             |            |
| Country       | Tjahjadi, | Indonesia   |             | E-mail:    |
| r             | Dian      | 12160       |             | [peka@indo |
| epresentative | Mediana   |             |             | .net.id]{. |
| for           |           |             |             | underline} |
| Washington    |           |             |             |            |
| Apple         |           |             |             |            |
| Commission,   |           |             |             |            |
| California    |           |             |             |            |
| Table Grape   |           |             |             |            |
| Commission,   |           |             |             |            |
| Pear Bureau   |           |             |             |            |
| Northwest,    |           |             |             |            |
| Sun-maid      |           |             |             |            |
| raisin,       |           |             |             |            |
| Sunkist       |           |             |             |            |
| Pistachious   |           |             |             |            |
+---------------+-----------+-------------+-------------+------------+
| PT Swaco      | A. Ali    | Wisma Mitra | (62-21)     | (62-21)    |
| Prima         | Basry,    | Sunter #402 | 651-4752/53 | 6583-1087  |
| Windutama     | Director  | Blok C-2,   |             |            |
|               |           | Blvd Mitra  |             | E-mail:    |
| Country       |           | Sunter, Jl. |             | [asagra    |
| r             |           | Yos Sudarso |             | in@indosat |
| epresentative |           | Kav 89,     |             | .net.id]{. |
| for U.S.      |           | Jakarta,    |             | underline} |
| Grain Council |           | Indonesia   |             |            |
| and American  |           | 14350       |             |            |
| Soybean       |           |             |             |            |
| Association   |           |             |             |            |
+---------------+-----------+-------------+-------------+------------+
| PacRim Assoc. | Dan       | 11/14 Soi   | (66-2)      | (66-2)     |
| Ltd           | Fi        | Ruam        | 689-6311    | 689-6314   |
|               | tzgerald, | Council,    |             |            |
| Regional      | Director  | Wireless    |             | E-mail:    |
| R             |           | Road,       |             | [u         |
| epresentative |           | Bangkok     |             | sdec@pacri |
| for the       |           | 10330       |             | m.co.th]{. |
|               |           |             |             | underline} |
| U.S. Dairy    |           |             |             |            |
| Export        |           |             |             |            |
| Council       |           |             |             |            |
+---------------+-----------+-------------+-------------+------------+
| U.S. Meat     | Eric      | 39 Tyrwhitt | 65-         | 65         |
| Export        | Choon,    | Road, 3^rd^ | 6733-4255/6 | -6732-1977 |
| Federation    |           | Floor       |             |            |
|               | Asean     | Suite,      |             | E-mail:    |
|               | Director  | Singapore   |             | <          |
|               |           | 207538      |             | echoon@usm |
|               |           |             |             | ef.com.sg> |
+---------------+-----------+-------------+-------------+------------+
| USA Poultry & | Margaret  | \# 15-04    | \(65\)      | \(65\)     |
| Egg Export    | Say       | Liat        | 6737-1726   | 6737-1727  |
| Council       |           | Towers, 541 |             |            |
|               | Regional  | Orchard     |             | E-mail:    |
|               | Director  | Road,       |             | [          |
|               |           | Singapore   |             | usapeec_si |
|               |           | 238881      |             | ng@pacific |
|               |           |             |             | .net.sg]{. |
|               |           |             |             | underline} |
+---------------+-----------+-------------+-------------+------------+
| U.S. Wheat    | Mark      | \# 15-02    | \(65\)      | \(65\)     |
| Associates    | Samson    | Liat        | 6737-4311   | 6737-9359  |
|               |           | Towers, 541 |             |            |
|               | Vice      | Orchard     |             | E-mail:    |
|               | President | Road,       |             |            |
|               | for South | Singapore   |             | [ms        |
|               | Asia      | 238881      |             | amson@uswh |
|               |           |             |             | eat.org]{. |
|               |           |             |             | underline} |
+---------------+-----------+-------------+-------------+------------+

+---------------+-----------+-------------+-------------+------------+
| **U.S.        |           |             |             |            |
| Cooperator    |           |             |             |            |
| and MAP       |           |             |             |            |
| Participants  |           |             |             |            |
| (cont.)**     |           |             |             |            |
+===============+===========+=============+=============+============+
| **O           | **Contact | **Address** | **Phone**   | **Fax**    |
| rganization** | Person**  |             |             |            |
+---------------+-----------+-------------+-------------+------------+
| American      | John      | #11-03 Liat | \(65\)      | \(65\) 6   |
| Soybean       | Lindblom  | Towers, 541 | 6737-6233   | 737-5849   |
| Association   |           | Orchard     |             |            |
|               | Regional  | Rd.,        |             | E-mail:    |
|               | Director  | Singapore   |             |            |
|               |           | 238881      |             | [asaspo    |
|               |           |             |             | re@pacific |
|               |           |             |             | .net.sg]{. |
|               |           |             |             | underline} |
+---------------+-----------+-------------+-------------+------------+
| U.S. Grains   | Kimberly  | Suite       | 603 2273    | 603 2273   |
| Council       | Rameker - | 3B-7-3A,    | 6826        | 2052       |
|               | Regional  | Block 3B    |             |            |
|               | Director  |             |             | E-mail:    |
|               |           | Level 7,    |             | [kra       |
|               |           | Plaza       |             | meker@usgc |
|               |           | Sentral,    |             | .com.my]{. |
|               |           |             |             | underline} |
|               |           | Jalan       |             |            |
|               |           | Stesen      |             |            |
|               |           | Sentral 5,  |             |            |
|               |           | 50470 Kuala |             |            |
|               |           | Lumpur,     |             |            |
|               |           | Malaysia    |             |            |
+---------------+-----------+-------------+-------------+------------+

**SECTION VI. POST CONTACT AND FURTHER INFORMATION**

The Foreign Agricultural Service (FAS) of US Embassy Jakarta maintains
up-to-date information covering food and agricultural import
opportunities in Indonesia and would be pleased to assist in
facilitating U.S. exports and entry to the Indonesia market. Questions
or comments regarding this report should be directed to the FAS Jakarta
at the following local or U.S. mailing address:

###### Foreign Agricultural Service

U.S. Embassy Jakarta

> Jl. Medan Merdeka Selatan \# 3-5
>
> Jakarta 10110 - Indonesia
>
> Tel: +62 21 3435-9161
>
> Fax: +62 21 3435-9920
>
> e-mail:agjakarta@usda.gov
>
> Home page: <http://www.usembassyjakarta.org/fas>

####### Foreign Agricultural Service

> U.S. Embassy-Jakarta
>
> Box 1, Unit 8129

####### FPO AP 96520-0001

Please contact our home page for more information on exporting U.S. food
products to Indonesia and to other countries, please visit the Foreign
Agricultural Service's Home Page:
[http://www.fas.usda.gov](http://www.fas.usda.gov/)

+-----------------------------------------------------------------------+
| # APPENDIX I. STATISTICS                                              |
+-----------------------------------------------------------------------+

## A. KEY TRADE INFORMATION FOR INDONESIA

+-------------------+--------+---------+-------+------+------+-------+
| **Item**          | **     |         |       | **   |      |       |
|                   | Import |         |       | U.S. |      |       |
|                   | from   |         |       | Ma   |      |       |
|                   | the    |         |       | rket |      |       |
|                   | World  |         |       | S    |      |       |
|                   | (mill  |         |       | hare |      |       |
|                   | ion)** |         |       | (    |      |       |
|                   |        |         |       | %)** |      |       |
+-------------------+--------+---------+-------+------+------+-------+
|                   | **     | *       | **2   | **20 | **20 | **2   |
|                   | 2005** | *2004** | 003** | 05** | 04** | 003** |
+-------------------+--------+---------+-------+------+------+-------+
| Agricultural      | 5,333  | 3,221   | 4,458 | 16   | 18   | 22    |
| Products          |        |         |       |      |      |       |
+-------------------+--------+---------+-------+------+------+-------+
| Consumer-Oriented | 1,403  | 1,224   | 902   | 12   | 11   | 11    |
| Agr.              |        |         |       |      |      |       |
+-------------------+--------+---------+-------+------+------+-------+
| Fish & Seafood    | 35     | 87      | 33    | 7    | 3    | 4     |
| Products          |        |         |       |      |      |       |
+-------------------+--------+---------+-------+------+------+-------+
| **Demographic     |        |         |       |      |      |       |
| Information:      |        |         |       |      |      |       |
| Indonesia**       |        |         |       |      |      |       |
+-------------------+--------+---------+-------+------+------+-------+
| **Total           |        | **219** | **A   |      |      | **1.  |
| Population        |        |         | nnual |      |      | 34%** |
| (million) in      |        |         | G     |      |      |       |
| 2005**            |        |         | rowth |      |      |       |
|                   |        |         | Rate  |      |      |       |
|                   |        |         | in    |      |      |       |
|                   |        |         | 2     |      |      |       |
|                   |        |         | 005** |      |      |       |
+-------------------+--------+---------+-------+------+------+-------+
| Urban Population  |        | **90**  | **A   |      |      | **    |
| (million) in 2002 |        |         | nnual |      |      | N/A** |
|                   |        |         | G     |      |      |       |
|                   |        |         | rowth |      |      |       |
|                   |        |         | R     |      |      |       |
|                   |        |         | ate** |      |      |       |
+-------------------+--------+---------+-------+------+------+-------+
| **Number of major |        | **10**  |       |      |      |       |
| Metropolitan      |        |         |       |      |      |       |
| Areas**           |        |         |       |      |      |       |
+-------------------+--------+---------+-------+------+------+-------+
| **Size of the     |        | **33**  | **G   |      |      | **    |
| Middle Class      |        |         | rowth |      |      | N/A** |
| (millions) in     |        |         | Rate  |      |      |       |
| 2005**            |        |         | in    |      |      |       |
|                   |        |         | 2     |      |      |       |
|                   |        |         | 005** |      |      |       |
+-------------------+--------+---------+-------+------+------+-------+
| **Per Capita      |        | ######  |       |      |      |       |
| Gross Domestic    |        | ### US  |       |      |      |       |
| Product in 2005   |        | \$1,277 |       |      |      |       |
| (estimated)**     |        |         |       |      |      |       |
+-------------------+--------+---------+-------+------+------+-------+
| **Unemployment    |        | **      |       |      |      |       |
| Rate in 2005**    |        | 10.3%** |       |      |      |       |
+-------------------+--------+---------+-------+------+------+-------+
| **Per Capita Food |        | **US    |       |      |      |       |
| Expenditures in   |        | \$17    |       |      |      |       |
| 2005**            |        | 7^\*^** |       |      |      |       |
+-------------------+--------+---------+-------+------+------+-------+
| **Percent of      |        | **51%** |       |      |      |       |
| female Population |        |         |       |      |      |       |
| Employed in       |        |         |       |      |      |       |
| 2003**            |        |         |       |      |      |       |
+-------------------+--------+---------+-------+------+------+-------+
| **\*: Average per |        |         |       |      |      |       |
| capita            |        |         |       |      |      |       |
| expenditure US    |        |         |       |      |      |       |
| \$328 (54% of     |        |         |       |      |      |       |
| those is for      |        |         |       |      |      |       |
| food); US \$1=IDR |        |         |       |      |      |       |
| 9,750 (average in |        |         |       |      |      |       |
| 2005)**           |        |         |       |      |      |       |
+-------------------+--------+---------+-------+------+------+-------+

  ---------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -----
  Exchange                                                                                           
  Rate                                                                                               
  (Rp./1US                                                                                           
  \$) on                                                                                             
  Period                                                                                             
  Month                                                                                              
  Ending                                                                                             
  Basis                                                                                              

             Jan     Feb     Mar     Apr     May     Jun     Jul     Aug     Sep     Oct     Nov     Dec

  2006       9,395   9,230   9,075   8,785   9,220   9,300   9,070   9,100   9,205   9,110   9,130   
  ---------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -----

Source: Central Bureau of Statistic (BPS-Badan Pusat Statistik) and
Business Indonesia Daily Newspaper

## B. CONSUMER FOOD & EDIBLE FISHERY PRODUCT IMPORTS

  --------------------------------- --------- ------- ------- --------- ------ ------ -------- ------ ------
  Indonesia Imports                 Imports                   Imports                 U.S             
                                    from the                  from the                Market          
                                    World                     U.S.                    Share           
                                                                                      (%)             

  (In Millions of Dollars)          2003      2004    2005    2003      2004   2005   2003     2004   2005

                                                                                                       

  CONSUMER-ORIENTED AGRICULTURAL    902       1,224   1,403   94        139    165    11       11     12
  TOTAL                                                                                               

  Snack Foods (Excl. Nuts)          34        54      49      0         0      1      1        1      1

  Breakfast Cereals & Pancake Mix   6         7       10      1         1      1      8        9      8

  Red Meats, Fresh/Chilled/Frozen   44        54      77      10        9      11     22       16     14

  Red Meats, Prepared/Preserved     4         5       8       0         0      0      5        0      0

  Poultry Meat                      1         1       4       0         0      0      39       30     8

  Dairy Products (Excl. Cheese)     269       417     508     18        45     61     7        11     12

  Cheese                            15        28      28      2         1      2      11       5      5

  Eggs & Products                   3         3       3       0         0      0      6        0      0

  Fresh Fruit                       185       211     212     38        37     38     20       17     18

  Fresh Vegetables                  70        79      100     0         0      1      0        0      1

  Processed Fruit & Vegetables      42        51      53      11        18     16     26       35     30

  Fruit & Vegetable Juices          4         7               1         1             7        4       

  Tree Nuts                         2         3       3       1         2      2      50       46     52

  Wine & Beer                       1         0       0       0         0      0      0        0      0

  Nursery Products & Cut Flowers    1         1       2       0         0      0      0        0      0

  Pet Foods (Dog & Cat Food)        4         5       6       2         1      2      39       24     34

  Other Consumer-Oriented Products  219       298     328     13        25     30     6        8      9

                                                                                                       

  FISH & SEAFOOD PRODUCTS           33        87      35      1         2      3      4        3      7

  Salmon                            1         2       3       0         0      0      0        0      0

  Surimi                            0         1       0       0         0      0      0        0      0

  Crustaceans                       12        58      10      1         2      2      7        3      17

  Groundfish & Flatfish             5         6               0         0      0      0        0      0

  Molluscs                          4         4       3       0         0      0      0        11     0

  Other Fishery Products            11        16      14      0         1      1      2        3      5

                                                                                                       

  AGRICULTURAL PRODUCTS TOTAL       4,458     5,221   5,333   972       943    870    22       18     16

  AGRICULTURAL, FISH & FORESTRY     4,599     5,458   5,557   1,019     997    934    22       18     17
  TOTAL                                                                                               

                                                                                                      

  Source: Global Trade Atlas                                                                          
  --------------------------------- --------- ------- ------- --------- ------ ------ -------- ------ ------

##  C. INDONESIA-TOP 15 SUPPLIERS OF CONSUMER FOODS & EDIBLE FISHERY PRODUCTS

  --------------------- ---------- ----------- ----------- --- ------------- ---------- ---------- ----------
  **CONSUMER-ORIENTED                                          **FISH &                            
  AGRICULTURAL TOTAL -                                         SEAFOOD                             
  400**                                                        PRODUCTS -                          
                                                               700**                               

                                                                                                   

                        **2003**   **2004**    **2005**                      **2003**   **2004**   **2005**

  (\$1,000)                                                    (\$1,000)                           

  China (Peoples        157,156    188,849     224,271         Singapore     2,306      3,583      6,501
  Republic of)                                                                                     

  Australia             105,292    151,660     196,258         China         3,527      35,431     3,793

  United States         94,778     138,849     164,676         Indonesia     4,014      4,484      3,760

  New Zealand           79,136     125,625     153,163         Japan         2,569      3,681      3,668

  Thailand              74,231     102,207     103,278         Malaysia      4,301      5,998      3,166

  Netherlands           89,083     97,261      93,209          United States 1,212      2,475      2,586

  Singapore             25,377     49,816      88,577          Thailand      2,447      6,987      1,516

  Philippines           62,417     76,635      72,307          Norway        1,129      1,101      1,475

  Malaysia              43,321     63,407      65,874          Australia     944        1,791      1,048

  France                14,599     23,834      27,609          Myanmar       771        4,341      896

  Denmark               8,441      21,754      25,393          Taiwan        3,473      3,044      887

  Korea, South          13,293     20,718      24,417          India         629        5,652      792

  Canada                9,029      12,405      19,262          Argentina     936        1,082      790

  Germany               18,655     17,828      18,076          Phillipines   336        694        787

  Ireland               8,953      12,842      13,361          Korea, South  435        356        687

  Belgium               5,639      7,882       10,011          Vietnam       735        926        624

  Other                 92,735     112,818     103,725         Other         3,340      5,774      2,427

  World                 902,135    1,224,390   1,403,467       World         33,104     87,400     35,403

                                                                                                   

  Source: Global Trade                                                                             
  Statistic                                                                                        
  --------------------- ---------- ----------- ----------- --- ------------- ---------- ---------- ----------

#  APPENDIX II. CALENDAR OF ENDORSED TRADE SHOWS IN INDONESIA

> Name of Event **FOOD & HOTEL INDONESIA 2007**
>
> Event Location Jakarta International Exhibition Center, Kemayoran,
> Indonesia
>
> Industry theme The 9^th^ International Hotel, Catering Equipment, Food
> and Drink Exhibition; The 5^rd^ International Retail Technology,
> Equipment, Display, and Storage Exhibition
>
> Dates of Event March 28-31, 2007
>
> Type of Event International Exhibition
>
> Name of Organizer P.T. Pamerindo Buana Abadi
>
> Phone of Organizer (62-21) 316-2001
>
> Fax of Organizer (62-21) 316-1983/4
>
> E-mail of Organizer [wiwiek@pamerindo.com]{.underline}
>
> Web site [www.pamerindo.com](http://www.pamerindo.com/)

######## Name of Event **FOOD, HOTEL & TOURISM BALI 2008**

> Event Location Bali International Convention Center, Nusa Dua - Bali,
> Indonesia
>
> Industry them The 6^th^ International Exhibition for Equipment, Food,
> Beverages and Services to Support Indonesia's Tourism and Hospitality
> Industries; The 6^th^ International Retail Technology, Equipment,
> Display, and Storage Exhibition
>
> Date of Event February 7-9, 2008
>
> Type of Event International Exhibition
>
> Name of Organizer PT Pamerindo Buana Abadi
>
> Phone of Organizer (62-21) 316-2001
>
> Fax of Organizer (62-21) 316-1983/4
>
> E-mail of organizer [wiwiek@pamerindo.com]{.underline}
>
> Web site [www.pamerindo.com](http://www.pamerindo.com/)