Required Report - public distribution

**Date:** 10/3/2005

**GAIN Report Number:** ID5024

ID5024

**Indonesia**

**Exporter Guide**

**Annual**

**2005**

**Approved by:**

![](media/image1.wmf)Chris Rittgers

U.S. Embassy, Indonesia

**Prepared by:**

Fahwani Y. Rangkuti

**Report Highlights:**

U.S. high-value agricultural exports to Indonesia reached a record \$145
million in 2004 and are on pace to surmount that record in 2005, with
the value reaching \$103 million in the first 7 months of 2005.
Prospects for further economic growth plus the rapid expansion of the
modern supermarket sector and the food service industry are expected to
continue to boost demand for imported products. Vast opportunities exist
for U.S. food exporters in Indonesia, but potential entrants must
establish personal contacts and be aware of import regulations. U.S.
dairy products are becoming an increasingly important export. Other
major high-value exports include fresh fruit, processed fruit &
vegetables, and snack foods (confectionery, potato chips, popcorn).

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Jakarta \[ID1\]

\[ID\]

TABLE OF CONTENT

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

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

[Market Opportunities 3](#market-opportunities)

[Advantage and Challenges Facing U.S. Food Products in Indonesia
4](#advantage-and-challenges-facing-u.s.-food-products-in-indonesia)

[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 ID5017)
6](#food-standards-and-regulation-fairs-report-id5017)

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

[Others 7](#others)

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

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

[B. HRI Food Service Sector 9](#b.-hri-food-service-sector)

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

[D. Distribution System 15](#d.-distribution-system)

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

[SECTION V. KEY CONTACTS AND FURTHER INFORMATION
21](#section-v.-key-contacts-and-further-information)

[SECTION VI. POST CONTACT AND FURTHER INFORMATION
25](#section-vi.-post-contact-and-further-information)

[APPENDIX 1: STATISTICS 26](#appendix-1-statistics)

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

[B. CONSUMER FOOD & EDIBLE FISHERY PRODUCT IMPORT
28](#b.-consumer-food-edible-fishery-product-import)

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

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

[APPENDIX III: DEFINITION 30](#appendix-iii-definition)

#   {#section .unnumbered}

# SECTION I. MARKET OVERVIEW 

## Economic Trends and Outlook

Indonesia is an archipelago nation of around 220 million people (2005),
making it the world's fourth most populous nation. Per capita income is
still relatively low, so great potential for further growth in aggregate
demand for consumer-ready food products exists. Consumer demand has
driven economic growth in recent years. In 2005, GDP growth is expected
to approach 5.1 percent, and most analysts forecast similar growth for
2006.

The Indonesian economy must overcome numerous challenges before
achieving a sustainable foundation for long-term growth. The most
serious challenges include an unattractive investment climate, weak
banking sector, exchange rate volatility, weak infrastructure, and lack
of an efficient and transparent legal system. The business sector and
consumers have also had to adjust to the mandated increases in fuel
prices in March and October 2005.

In 1996, (before the financial and economic crisis hit much of Asia),
total U.S. agricultural and forestry products exports to Indonesia were
nearly \$900 million. Beginning in late 1997, however, Indonesia
experienced a dramatic collapse in its economy. U.S. agricultural and
forestry exports dropped to \$813 million in 1997 and \$495 million in
1998. In 1999, the economy and in turn U.S. agricultural exports began
to recover. U.S. agricultural exports have rebounded since and are
expected to approach \$1 billion in 2005.

The overall economic outlook for Indonesia is for relatively slow but
continued growth, with annual U.S. agricultural exports expected to grow
concurrently.

## Market Opportunities

-   Indonesia\'s population is relatively young with more than half of
    the population (66%) between 15-64 years old. Nearly 60 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. This is about half of the pre-crisis level of 78
    million. Most of these people live in the major urban areas,
    including cities on Java (Jakarta and its surroundings, 12.5 million
    people; Surabaya, 3 million; Yogyakarta and surroundings 1.8 ;
    Bandung, 2 million; and Semarang, 1.3 million); Sumatera (Medan, 2.1
    million; and Palembang, 1.5 million); Sulawesi (Makassar, 1.5
    million; and Manado, 1 million); and the island of Bali (1.6
    million); Kalimantan (Balikpapan & Samarinda, 1 million).

-   The population has become increasingly more literate and Westernized
    during the past decade due to increased overseas studies and
    international travel; access to international TV; expansion of
    modern malls in big cities; dramatic growth in major international
    hotel and restaurant chains (including fast food), and foreign
    tourist arrival (5.3 million in 2004 and slightly above 2001 arrival
    at 5.1 million in 2001).

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

-   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.

-   The Indonesian consumer is very price conscious and susceptible to
    economic swings, with purchasing fluctuations occurring more in the
    middle and lower level income groups. Customers mostly prefer
    smaller packs for affordability.

-   More urban women are entering the workforce and choosing to stay
    there after marriage and children. With less time available for
    shopping and cooking, focus is increasingly on convenience.

-   The number of household appliances for cooking is low. At average,
    19 percent of households have a refrigerator (33.74 percent in urban
    and 8.12 percent in rural area). Cooking with gas stove appliances
    occurs only for about 14.42 percent household (24.58 percent in
    urban and 6.91 percent in rural area).

-   Demand for imported ingredients is growing as food manufacturers are
    continuing to develop new products.

## Advantage and Challenges Facing U.S. Food Products in Indonesia

  ----------------------------------- -----------------------------------
  **ADVANTAGES AND CHALLENGES FACING  
  U.S. FOOD PRODUCTS IN INDONESIA**   

  **Advantages**                      **Challenges**

  Market scale - Indonesia has a      Weak purchasing power of the
  population of around 220 million    majority of the population.
  people.                             

  Almost 10% of population is between The Muslim population (88%) does
  10-14 years of age (21 million).    not consume non- halal products.
  The majority are expected to        
  participate in tomorrow's consumer  
  market, or are already.             

  Most applied duties on food and     Import regulations are complex,
  agricultural products are 5 percent often non-transparent, and require
  or less.                            exporters to establish close
                                      business relationships with local
                                      importers/agents.

  The distribution system on the      Infrastructure, including ports and
  island of Java is improving,        cold storage, facilities outside of
  providing increased access to a     the main island of Java is poorly
  population of 132 million           developed.

  A reputation for quality is the     Third-country competition remains
  strongest selling point for U.S.    strong, especially from Australia,
  food products.                      New Zealand and the Europe. Food
                                      products import from Malaysia,
                                      Philippines, Thailand and China is
                                      growing. ASEAN plus AFTA and China
                                      trade agreement are starting to be
                                      implemented.

  Food processing industry is         Import financing remains a problem
  aggressively seeking a variety of   as Indonesia's banking system
  imported food ingredients           remains weak.

  Distribution and availability of    Important considerations are
  imported products will be expanded  labeling regulations, including
  by the rapid growth of the modern   halal, and shipment sizes. U.S.
  supermarket sector and western      companies need to work with U.S.
  restaurant chains.                  consolidators and be prepared to
                                      send smaller quantities.

  Indonesia has a well-developed      In a cost-cutting measure, many
  tourism industry with many hotel    hotels replaced much of their
  chains and restaurants purchasing   expatriate F&B staff with
  imported products through local     locally-hired staff. While most are
  agents/importers.                   well-qualified, they are unfamiliar
                                      with U.S. quality food products and
                                      tend to emphasize price over
                                      quality.

  Indonesia is rich in natural        Sites tend to be in remote areas
  resources, with multinational       where transportation and lack of
  companies involved in the           infrastructure presents barriers to
  development of oil & gas, mining,   cost-efficient distribution of
  and lumber. Some of the             imported food products.
  well-developed sites have           
  commissary services with            
  significant demand for imported     
  products.                           
  ----------------------------------- -----------------------------------

# SECTION II. EXPORTER BUSINESS TIPS 

## Business Customs

-   While quality and price are important, they are secondary to the
    personal interaction of the business partners. Perhaps nowhere in
    the world is meeting face-to-face more important than in Indonesia.

-   Market visits to conduct research, especially for product testing,
    price comparison, adjusting the product for local tastes, and
    understanding government regulations are critical. Meeting
    importers, distributors and retailers is an essential part of the
    market research.

-   It is a good idea to start your research in Singapore where your
    product can easily move into the ASEAN region. Singaporean agents,
    importers, distributors and retailers are sophisticated and know the
    regional markets well. In addition, the shipping time is less and
    smaller shipment sizes can be sent into new markets from Singapore.

-   Appoint one or several agents on a trial basis and provide them with
    incentives to get your product into the market. Support your agent
    by maintaining product quality. Educate the agent, the importer, the
    distributor, the retailer and the consumer about your product. This
    market for consumer-ready food products is relatively new and it
    should never be assumed that anyone knows how to promote, handle,
    and prepare your product.

-   Assist the food processors to develop products using food
    ingredients.

-   Be patient and think long term. It is not unusual to visit the
    market 2-3 times before details are finalized.

## General Consumer Tastes and Preferences

-   Lunch and dinner meals consist mainly of rice together with two or
    three meats/fish and vegetable dishes that are prepared according to
    various ethnic styles and tradition. There is a general tendency to
    consume a large portion of fresh produce, often bought on day of
    consumption. Religious affiliation affects food consumption. Muslims
    do not eat pork, and only eat meat products that have been certified
    halal as well as other domestically produced food items.

-   When introducing new products, several factors should be kept in
    mind. Indonesian consumers have an aversion to low-quality products
    and are attracted to branded products. They also tend to be image
    conscious and very price sensitive. Brand loyalty is most likely to
    be broken by products that are of good quality, well packaged,
    well-distributed, well-promoted and competitively priced, rather
    than cheap products.

## Food Standards and Regulation (FAIRS report ID5017)

-   Have your appointed agent register your product. According to
    Indonesian regulations, all products must be registered through the
    National Agency for Drug and Food Control (BPOM) to obtain an ML
    ("Makanan Luar"/Import Registration) number. However, a significant
    percentage of the imported products on supermarket shelves are not
    registered and enter the market in mixed container loads. The
    registration process can be lengthy, bureaucratic and costly and
    generally requires a local agent or importer.

-   Labeling and marking requirements: Food labeling are in place and
    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.

-   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 meat shipment imported
    requires prior approval by the Ministry of Agriculture.

-   Your product should be packed and shipped for a tropical climate,
    and have clear storage instructions. This is especially important as
    few cold storage or air-conditioned facilities and delivery trucks
    exist and sometimes stores turn off cold storage facilities at night
    to conserve energy.

## 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 to get shipments released.

-   Starting July 1, 2005, a new tariff regulation between China and
    AFTA has been implemented. However, the tariff rate regulation among
    AFTA member themselves (Brunei, Indonesia, Malaysia, Philippines,
    Singapore and Thailand) will be implemented starting July 2007 for
    80% of pos tariff and the rest will be implemented in 2010. Vietnam,
    Cambodia, Laos and Myanmar will integrate in 2012.

-   Tariff and Import Taxes: Indonesia\'s bound tariff rates on major
    food and agricultural items generally range from 5 to 40 percent.
    Applied tariffs, however, on most food items are 5 percent. The
    major exception is the 170 percent duty applied to all imported
    alcoholic beverages.

-   Other Taxes: 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. Another tax is Sales tax (PPn) 2.5 percent.

## Others

-   Take advantage of the services offered by the Foreign Agricultural
    Service. We can provide a briefing in our office, provide contact
    lists for your areas of interest, arrange hotel accommodations, and
    inform you of upcoming events such as U.S. food product shows and
    agent shows.

-   The Southeast Asia Market Access Program sponsored by the Western
    U.S.A. Trade Association (WUSATA) and the Midwest Agricultural Trade
    Association (MIATCO) provides many services for a fee including
    store checks, competitive products shopping, distributor referrals,
    and in-market assistance. See Section V for contact lists of all
    Foreign Market Development (FMD or Cooperator) programs and Market
    Access Program (MAP) participants active in the food sector in
    Indonesia.

-   ***Always remember, while quality and price are important, they are
    secondary to the personal interaction of the business partners.
    Perhaps nowhere in the world is meeting face-to-face more important
    than Indonesia.***

# SECTION III. MARKET SECTOR STRUCTURE AND TRENDS

## A. Retail Sector

### Market Overview

The retail industry has evolved significantly from poor traditional
markets and modest kiosks to sophisticated hypermarkets and superstores.
At present, many big retailers are engaged in major expansion projects.
With the entrance of some foreign retail giants like Carrefour, Giant,
Makro, and Lion Superindo (Delhaize group), competition in the
Indonesian retail market has become very fierce. In recent years, major
national and international chains continued to expand into other cities
all over Indonesia in various format outlet such as hypermarket,
supermarket and mini market. The modern retail outlets with all of their
facilities support provide a good prospect for imported U.S. food
products.

#### Table 1. Number of Retail Outlets by type 1999-2003

  -------------------------- ---------- ---------- --- ---------- ---- ---------- ---- ----------
  **Description**            **1999**   **2000**       **2001**        **2002**        **2003**

  Co-operatives              74,751     79,512         84,510          89,748          95,264

  Independent grocers        70,300     74,952         80,031          85,421          91,305

  Convenience stores         1,025      1,121          1,225           1,325           1,615

  Supermarkets               1,173      1,210          1,255           1,312           1,377

  Department stores          522        550            573             602             643

  Warehouse clubs            22         23             28              29              29

  Hypermarkets               6          7          8              11              13   

  Others                     21,571     28,573         38,595          48,050          60,222

  Wet market                 10,430     10,452         10,475          10,502          10,532

  Total                      179,800    196,100        216,700         237,000         261,000
  -------------------------- ---------- ---------- --- ---------- ---- ---------- ---- ----------

Source: Euromonitor

#### Table 2. Percentage Growth of Retail Sales by Type of Outlet

  ----------------- ---------------------------- --------------------------
  **Description**   **1999/2003 (excluding wet   **2002/2003 (excluding wet
                    market)**                    market)**

  Co-operatives     74.0                         11.1

  Independent       66.5                         13.7
  grocers                                        

  Convenience       64.7                         13.0
  stores                                         

  Supermarkets      36.5                         8.1

  Department stores 36.7                         7.3

  Warehouse clubs   19.5                         4.8

  Hypermarkets      148.3                        32.0
  ----------------- ---------------------------- --------------------------

Source: Euromonitor

#### Table 3. Food Retailer Sales by Type of Outlet 1999-2003 (IDR billion)

  ---------------------- ---------- ---------- ---------- ---------- ---------
  **Description**        **2001**   **2002**   **2003**   **2004     **2005
                                                          est**      est**

  Co-operatives          9,161      10,802     12,003     13,466     15,122

  Independent grocers    32,003     36,246     41,201     44,000     48,958

  Convenience stores     2,615      2,946      3,328      3,944      4,681

  Supermarkets           9,981      10,756     11,625     12,636     13,761

  Hypermarkets           1,995      2,720      3,590      4,739      6,351

  Wet market             204,685    231,846    263, 826   291,931    322,241

  Others                 8,575      9,829      11,550     13,444     15,675

  Total                  269,044    305,144    347,122    384,160    426,790
  ---------------------- ---------- ---------- ---------- ---------- ---------

Source: Euromonitor

Most supermarkets, hypermarkets, and warehouse outlets buy their
imported products from distributors or agents, such as fresh fruit,
meat, and other processed food. Some are importing direct from foreign
suppliers, particularly perishable products. This trend is expected to
expand in the near future. In general, new products and suppliers must
be approved by the purchasing unit in headquarters (for national chain
stores) in Jakarta. Subsequent orders may take place from individual
stores, especially those outside of Jakarta. Delivery is to a central
warehousing facility or individual stores.

### Future Trends

In the near future, recently-developed patterns of consumer behavior are
expected to continue growing (prefer shopping at the supermarket/modern
outlet due to comfortable shopping space, a complete range of goods,
guaranteed quality of products, competitive price, good service, and
easy accessibility to the residents of the settlement area). Consumers
are adjusting to paying higher prices for imported and local food
products. They will remain very selective in their product purchases and
will be looking for good quality products at low prices. Promotion will
be important as consumers will be more fickle and there will be
opportunities to replace traditional brands. There are growing concern
with the nutritional aspects of food products.

Future trends include Ready-to-Cook and Ready-to-Eat foods due to modern
life styles, both parents work, and international exposure.

### Entry Strategy

The best way to penetrate the Indonesian market is to select an agent.
In general, the volume of imported product sales is small. An agent is
needed to assure the widest distribution for your products as well as to
undertake the marketing efforts necessary to create awareness for your
products among consumers as well as to register your products (ML
number) with the National Agency for Drug and Food Control.

In some situations, it may make sense to sell your product directly to
supermarkets and/or to appoint them as the exclusive distributors. This
is primarily the case when your product is a gourmet, upscale product
and not likely to generate sufficient volume to interest an agent in
bringing in container loads or the retailers has sufficient outlets for
supplying the products or fresh fruit. Nevertheless, your initial sales
efforts to Indonesia should include both visits with potential agents as
well as with key retailers.

### Best Market Prospects

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

### Further Information

For a more detailed assessment of the Indonesia retail food sector,
please see: *Indonesia, Market Development Report, Retail Sector Report
2004*. Information on how to access this report is available under
Section V.

## B. HRI Food Service Sector

### Market Overview 

The Hotel, Restaurant, and Institutional (HRI) industry in Indonesia is
extremely diverse. It consists of hotels, restaurants that serve local
and Western food, fast food outlets, and clubs. Small restaurants,
street stalls known as warungs, and hawkers that sell food to customers
on the street comprise the majority of retail outlets. Catering
operations service airlines, factories, and private social functions.
Cruise and military ships, mining and oil operations, prisons, and
hospitals are also a part of this sector.

The majority of imported products are sold to four and five-star hotels
and up-scale restaurants that sell Western food. A significant volume of
imported items is also sold to Western fast food outlets, but the
variety is limited. In compliance with that, tourism and the high-end
income Indonesian who dine out on imported food are the important target
group for this consumer food service.

In 2003, there were around 10,435 hotel-type institutions (263,000
rooms) in Indonesia, and 1,300 of those accommodation (37,000 rooms )
are in Bali. The subsector comprises 7.7 percent five star hotels, 14.8
percent four stars, 23.8 percent three star, and the rest below three
star hotels. Most of the three star hotels and above are owned by
international and domestic hotel chains.

#### Table 4: Sales in Consumer Foodservice by Sector 1999-2003 (IDR billion)

  ---------------------- ---------- ---------- ---------- ---------- ----------
                         **1999**   **2000**   **2001**   **2002**   **2003**

  **Cafes/bars**         7,703      8,761      10,427     12,103     13,928

  **Full-service         32,881     41,367     52,678     63,626     74,985
  restaurants**                                                      

  **Fast food**          2,607      3,403      4,287      5,022      5,872

  **100%m home delivery  81         90         111        134        154
  /takeaway**                                                        

  **Self-service         629        703        824        961        1,134
  cafetaries**                                                       

  **Street               4,395      4,799      5,434      6,270      7,051
  stalls/kiosks**                                                    

  Total                  48,297     59,123     73,760     88,116     103,124
  ---------------------- ---------- ---------- ---------- ---------- ----------

Source Euromonitor

#### Table 5: Sales in Consumer Foodservice by Sector 1999-2003 (% transaction growth)

+--------------------------------+---------+------------------+-------+
|                                | **20    | **1999-03**      | **19  |
|                                | 02/03** |                  | 99-03 |
|                                |         | **(Average       | (Tot  |
|                                |         | growth/ year)**  | al)** |
+--------------------------------+---------+------------------+-------+
| **Cafes/bars**                 | 6.1     | 7.4              | 33.3  |
+--------------------------------+---------+------------------+-------+
| **Full-service restaurants**   | 6.0     | 6.6              | 29    |
+--------------------------------+---------+------------------+-------+
| **Fast food**                  | 9.7     | 10.3             | 48.1  |
+--------------------------------+---------+------------------+-------+
| **100% home                    | 4.7     | 6.4              | 28    |
| delivery/takeaway**            |         |                  |       |
+--------------------------------+---------+------------------+-------+
| **Self-service cafetaries**    | 7.7     | 6.8              | 29.9  |
+--------------------------------+---------+------------------+-------+
| **Street stalls/kiosks**       | 3.8     | 3.6              | 15.2  |
+--------------------------------+---------+------------------+-------+
| Total                          | 4.8     | 4.9              | 21.1  |
+--------------------------------+---------+------------------+-------+

Source Euromonitor

Despite international franchises outlets (such as bread talk, a bakery
chain from Singapore that open the bread lover eyes in Jakarta), local
restaurant and bakery franchises outlets are also rapidly increasing.
This include noodles, pizza, fried chicken, as well as modern bakery
outlets.

Shops specializing in coffee are growing including international chain
(Starbuck Coffee, The Coffee Bean and Tea Leaf, Gloria Jean's, Dome
coffee) and local chains. Fast food pizza as a meal alternative and
bakery also experienced a significant growth. New bakeries are
introduced with modern concept (bread boutiques or serving hot/cold
sandwiches). The growth of foodservice industry is also push by the
development of the shopping malls in the big cities where the food
service outlets are located. New outlets in the café/bars sector
increase but the popularity of specific outlets tends to be short-lived
due to the frequent shifting of the consumer preference.

Away-from-home eating is a very common activity across all levels of
income. For various reasons, the custom is gaining acceptance all over
Indonesia. Apart of the basic reason such as lunching at work, the
change in lifestyle and income levels (dining out with peers in standard
Western food service outlets become a trendy and modern way of life;
shopping malls become recreational places during the weekend) has also
become major driving force behind the trend. For a few, eating out as a
family activity is done every weekend.

Private social functions, such as wedding party, also contribute to the
sales of food service industry. For high income consumer, wedding party
is a prestige ceremonial event and conducted in four or five-star hotels
or in up-scale restaurants with thousand invitees and serve with
abundant food from appetizer to desert. This is common in Indonesian
culture to invite a lot of people for wedding ceremony and provide them
with foods.

### Future Trends

In 2004, the Revenue from the hotel and restaurant sector was \$4.8
million from 5.3 million tourists and in 2005 is estimated to reach US\$
6 million from 6 million tourists. The customer base for most of the HRI
trade is expected to shift to an even higher percentage of Indonesian
customers, in contrast to the high percentage of expatriate customers in
pre-crisis years. The growing of local tourist has pushed by the
competitive price of domestic airfares since past three years. The
expansion of the franchise restaurants (including fast food), casual
dining cafés, international and family style restaurant, and food court
is expected to increase imported food consumption.

### Entry Strategy

A U.S. exporter that is interested in selling to the HRI trade in
Indonesia should look for a reputable importer/distributor to represent
their products. These companies have the import licenses and knowledge
of customs clearance procedures that are required to successfully bring
in products. They will also have the capability to be in a position to
ensure the widest distribution for your items.

Despite the downturn this year, Jakarta and Bali remain the ideal
locations to target in your market entry efforts. These cities have a
sizeable HRI trade, which consist of 5-star hotels and upper-scale
restaurants. They also have sizeable expatriate communities and a large
numbers of foreign visitors that seek imported food products.

### Further Information

For a more detailed assessment of the Indonesia retail food sector,
please see: *Indonesia, Market Development Report, HRI Food Service
Sector Report 2003.* Information on how to access this report is
available under Section V.

## 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 in 2002 was worth
over US\$ 10 billion, and is comprised of 4,700 businesses, ranging from
family owned business to multinational companies, and over 900,000
traditional home industries. Package food sales in 2002 grew
approximately 15 percent, reaching sales of over IDR. 61,000 billion
(US\$ 6.67 billion). Unfortunately, inflation played a significant role
in driving up current value growth. Price increases for fuel,
electricity, telephones, rice, and other basic necessity items
continually drive up end product prices.

#### Table 6: Retail Sales of Package Food in 2003 - 2004 (Rp billion)

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

  Confectionery           6,471                   7,735

  Bakery products         10,512                  11,955

  Ice cream               1,258                   1,414

  Dairy products          9,234                   10,655

  Sweet and savory snacks 4,177                   4,654

  Snack bars                                      

  Meal replacement        59                      78
  products                                        

  Ready meals             31                      36

  Soup                    19                      23

  Pasta                   56                      64

  Noodles                 8,518                   9,431

  Canned/preserved food   894                     1,041

  Frozen processed food   953                     1,224

  Dried processed food    18,844                  21,340

  Chilled processed food  313                     348

  Oils and fats           4,050                   4,761

  Sauces, dressings and   2,505                   2,781
  condiments                                      

  Baby food               3,193                   3,821

  Spreads                 369                     414

  Total Package food      62,842                  72,232
  ----------------------- ----------------------- -----------------------

Source: Euromonitor (rounded)

Various new product development of package food has been noted in past
two years. This includes sugar confectionery, breakfast cereals, instant
noodle, savory snacks, and dairy drinks that provides consumer with a
wider selection of products.

In past few years, fruit-flavored drinks started to dominate
fruit/vegetable juice due the price concern (only slightly above the
bottle water) and targeted all class.

Soy bean base products, such as tofu, tempe and soy milk as
multi-functional health drink packed in a transparent plastic bag, are
produced by small scale industry (home industry) and already ubiquitous
in Indonesia mostly sold in traditional market and door to door service.

#### Table 7. On trade vs Off trade sales of Fruit/Vegetables juice in 2002- 2003 (Rp billion)

  ----------------------- ----------------------- -----------------------
  Description             2002                    2003

  Off-trade               233                     300

  On trade                98                      110

  Total                   331                     411
  ----------------------- ----------------------- -----------------------

Source: Euromonitor (rounded)

Consumer sophistication, growing health consciousness, the introduction
of new food products, and growth of modern retail outlets should lead to
positive growth in the food-processing sector, although facing several
challenges are continuing to inhibit economic growth. Growth is expected
to range from 4-11 percent in volume terms and increase by close to 8
percent in value terms.

### Entry Strategy

Inputs for food processing can be categorized as follows:

-   Primary materials such as frozen offal beef, wheat or skimmed milk
    powder.

-   Essential complementary ingredients such as flavoring or
    preservatives.

Primary materials are most commonly imported directly by the food
processor. Complementary ingredients are usually bought from a local
importing agent because they are used in smaller quantities and often
have limited shelf life.

Some "local suppliers" are agents in Singapore, which some producers
find useful as a regional distribution point. Food processors buy from
local agents in some cases because the agent has an exclusive sales
agreement. Some companies would import directly if an alternative source
were located.

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

The range of products represented in the industry makes recommendation
of one strategy difficult. Generally applicable principles are as
follows:

** Personal contact and local representation is essential if a
permanent presence in the market is envisaged.

 Local representation requires careful and detailed research 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 greater value in the market than \"good
connections\".

 Do not make any commitment to grant exclusive rights to a product
before gaining experience of a prospective representative\'s
capabilities.

 Pay attention to accounting standards applied in the preparation of
reports supporting the financial standing of candidate representative\'s
or partners.

### 

### Investment Trends

Foreign investment in the food processing sector is increasing as a
result of liberalized investment regulations and the need for new
capital during the ongoing economic crisis. A further consideration is
the establishment of the AFTA trade zone giving favored treatment to
regional production. Each of the following U.S.-based corporations based
in Indonesia export to the region using their world brand names: Heinz -
PT. Heinz ABC Indonesia; Campbells Soups - PT. Arnott\'s Indonesia (via
Australian subsidiary); and Nabisco - PT. Nabisco Foods.

European investment is strongest in the dairy foods industry with
Nestle, Freische-Foremost, and Nutricia all long standing participants.
New comer, PT Danone Dairy Indonesia and New Zealand also established
their dairy manufacturers in Indonesia. Japanese investment in the
sector does not match its standing in other Indonesian manufacturing
sectors.

Despite the entry of new players, the recent trend among Indonesian
manufacturers is contract manufacturing to a Chinese processor to avoid
the high cost of local raw materials, such as sugar, to produce candy
and other package food products.

The challenges Indonesian manufacturers continue to face high
electricity/fuel price, increasing labor cost, lack of distribution
infrastructure, and cheaper finished products from neighboring ASEAN
countries and China.

### Consumption Trends

Significant growth potential exists in this sector 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. Indonesian people spent about 60
percent of total expenditure for food. Out of that 60 percent, only 25%
is spent for processed food and beverages, or about U\$ 8.55 billion
annually, of which US\$ 6.67 billion was for processed food (2002).

Post crisis, processed food industries are facing changing consumer
profiles. There are a growing number of more sophisticated, critical,
and educated consumers. Consumers are increasingly familiar with
fortified food, i.e. products with added vitamins and minerals in milk,
biscuits and ice cream. These sophisticated consumers gained knowledge
not only from living, studying, and working abroad but also from the
media. However, the majority of consumers remain price conscious.

To address price concerns, smaller pack sizes and no frill products and
cost are being reduced to lead to more affordable products.

Breakfast cereal that has an image as a healthy products moves from
introduction to developing stages and now there are three local
producers produce this kind of products.

In contrast, relatively new categories, such as ready meals
(industrially packed), meal replacement drinks, and snack bars have
limited potential. Many consumers are unaware of these products and
since the price is expensive, the penetration rate remains low. Ready
meals will not be a necessity since affordable ready-to-eat or cooked
food is available at eating outlets of all sizes throughout Indonesia.

### Best Market Prospects

Best market prospects include wheat flour based food products as the
alternate of Indonesian staple food in the form of noodle and baked
goods, food-use soybeans, beef, dairy products, flavorings, processed
poultry products, processed potato products, fruit concentrates, and
bakery ingredients.

### Further Information

For a more detailed assessment of the Indonesia retail food sector,
please see: *Indonesia, Market Development Report, Food Processing
Sector Report 2003.* Information on how to access this report is
available under Section V.

## D. Distribution System

Due to the widespread and diverse nature of the country involving
thousands of islands, this system is complex. In many cases, the
infrastructure is insufficient, especially outside big cities and Java
island. The ability to move frozen and refrigerated products is limited.
There are only several national distributors who service the whole
country and numerous agents/distributors with a more local reach. There
are hundreds of wholesalers and millions of retailers.

Inadequate ports were the single largest and most consistent complaint
in every province and with all levels of the distribution system. The
shallow drafts in ports requiring small ships and inadequate loading and
unloading facilities resulting in frequent congestion as well as the
unreliable shipping schedules and inadequate number of small ships
serving Eastern Indonesia, particularly during bad weather periods -
which results in frequent shortages and leads firms to hold higher than
desired inventories, with 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 direct to stores or to the
warehousing facilities of the retailer. Only a few retailers buy
directly from foreign suppliers and assume responsibility for the
logistics function. Major food processors tend to buy 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, whereas other food items are widely traded. 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.

Restaurants and retailers alike frequently complain about the poor
distribution system. Their complaints center around getting a consistent
supply of quality food products. Sometimes distributors sell outdated
products that they purchased inexpensively or a frozen product was not
stored correctly and has been refrozen. In addition, they complain about
the large number of distributors they must deal with 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 imported product, as identified by the FAS Jakarta
based on Central Bureau Statistics data are as follows:

  ---------- ----------------- --------- -------- --------- -------- --------- --------
  HS Code    Description       2002 (             2003 (USD          2004 (USD 
                               USD 000)           000)               000)      

                               World     US       World     US       World     US
                                         Origin             Origin             Origin

  040210     Milk and Cream,   119,000   5,400    113,500   8,600    171,100   39,500
             Concentrated,                                                     
             Whether or not                                                    
             Sweetened, In                                                     
             powder, granules                                                  
             or other solid                                                    
             forms, of a fat                                                   
             content, by                                                       
             weight, not                                                       
             exceeding 1.5%                                                    

  080810     Apples, fresh     68,300    31,600   61,800    26,800   63,400    23,100

  210690     Food Preparation  47,700    4,400    69,200    5,100    111,600   13,600
             Nesoi                                                             

  080610     Grapes, fresh     18,600    10,000   18,000    8,400    25,600    11,400

  020622     Livers of bovine  8,200     3,300    8,900     4,200    7,700     4,700
             animals, edible,                                                  
             frozen                                                            

  3505100    Dextrins and      41,800    2,700    34,000    2,400    35,300    4,000
             other Modified                                                    
             Starches                                                          

  350400     Peptones and      6,300     2,400    8,100     2,900    11,400    3,600
             derivatives;                                                      
             other proteins                                                    
             and                                                               

  040410     Whey and modified 19,700    3,200    16,700    2,800    28,300    3,400
             whey, whether or                                                  
             not concentrated                                                  
             or containing                                                     
             added sweeterners                                                 

  210610     Protein           2,900     1,200    3,600     1,100    11,700    3,100
             concentrates and                                                  
             textured protein                                                  
             substance                                                         

  110520     Flakes, granules  2,100     1,800    3,000     2,300    3,700     2,600
             and pellets of                                                    
             potatoes                                                          

  020629     Offal of bovine   14,500    3,900    14,200    3,700    16.900    2,500
             animals, edible,                                                  
             nesoi, frozen                                                     

  200410     Potatoes,         6,200     2,300    6,700     1,000    6,100     2,200
             including French                                                  
             fries, prepared                                                   
             or preserved                                                      
             otherwise than by                                                 
             vinegar or acetic                                                 
             acid, frozen                                                      

  200520     Potatoes prep or  84        6        1,000     57       1,900     1,700
             presv ioth wise                                                   
             than by vinegar,                                                  
             nor frozen                                                        

  071010     Potatoes,         3,500     2,400    2,600     1,000    2,900     1,400
             uncooked or                                                       
             cooked by                                                         
             steaming or                                                       
             boiling in water,                                                 
             frozen                                                            

  170219     Lactose in solid  600       200      1,200     100      2,800     1,300
             form and lactose                                                  
             syrup, nesoi                                                      

  230910     Dog, and cat      3,700     1,200    3,900     1,500    5,100     1,200
             food, put up for                                                  
             retail sale                                                       

  020230     Meat of bovine    17,900    1,200    17,700    1,500    24,900    1,000
             animals,                                                          
             boneless,frozen                                                   

  080510     Oranges, fresh    13,900    1,000    17,600    1,400    25,400    1,000

  130232     Mucilages &       3,100     1,100    2,500     900      2,800     1,000
             thickeners,                                                       
             whether or not                                                    
             moif derv from                                                    
             locust beans                                                      

  040630     Cheese,           3,600     200      6,500     1,200    19,700    900
             processed, not                                                    
             grated or                                                         
             powdered                                                          

  13021200   Vegetables Saps & 1,700     1,400    1,100     800      1,400     700
             extract of                                                        
             liquorice                                                         

  071290     Vegetables,       2,000     300      3,000     600      2,400     600
             Nesoi, dried and                                                  
             vegetable                                                         
             mixtures dried                                                    
             (whole, cut,                                                      
             sliced, etc) but                                                  
             not further prep.                                                 

  080620     Grapes Dried      900       200      900       200      800       300
  ---------- ----------------- --------- -------- --------- -------- --------- --------

**[Country of origin:]{.underline}**

  ---------- ------------------- ----------------- ------------- -------------------
  **HS       **Description**     **2002 (percent   **2003        **2004 (percent USD
  Code**                         USD value         (percent USD  value terms)**
                                 terms)**          value         
                                                   terms)**      

  040210     Milk and Cream,     Australia 32%, NZ NZ 25%,       *US 23%,* Australia
             Concentrated,       27%, Netherlands  Netherlands   22%, NZ 20%,
             Whether or not      18%, ***US 5%,*** 22%,          Netherlands 11%,
             Sweetened, In       Czech Republic    Australia     Denmark 3%, UK 3%,
             powder, granules or 4%, Germany 3%,   17%, Germany  Ireland 3%
             other solid forms,  Poland 2%         9%, ***US     
             of a fat content,                     8%,***        
             by weight, not                        Ireland 3%,   
             exceeding 1.5%                        UK 3 %,       
                                                   Canada 3%,    
                                                   Poland 2%     

  080810     Apples, fresh       ***US 46%,***     China 48%,    China 55%, [US
                                 China 41%, France ***US 43%***, 37%]{.underline},
                                 4%, NZ 4%         NZ 5%         NZ 3%

  210690     Food Preparation    Netherlands 49%,  Netherlands   Netherlands 39%,
             Nesoi               South Korea 12%,  53%, South    South Korea 15%,
                                 ***US 9%***,      Korea 14%,    [US
                                 Malaysia 8%,      Malaysia 8%,  12%,]{.underline}
                                 Thailand 5%,      ***US 7%,***  Malaysia 9%
                                 Philippines 3,    Thailand 4%,  
                                 Australia 2%      Philippines   
                                                   3%, Australia 
                                                   2%, Japan 2%, 
                                                   China 2%      

  080610     Grapes, fresh       ***US 54%,***     ***US 47%,*** ***US 44%,***
                                 Australia 37%     Australia 29% Australia 31%,
                                                                 Chile 8%, South
                                                                 Africa 7%, China 4%

  020622     Livers of bovine    Australia 43%,    ***US 47%,*** *US 61%,* NZ 22%,
             animals, edible,    ***US 41%,*** NZ  Australia     Australia 16%
             frozen              14%               37%, NZ 15%   

  3505100    Dextrins and other  Thailand 50%,     Thailand 56%, Thailand 52%, *US
             Modified Starches   Netherlands 12%,  Netherlands   11%*, Netherlands
                                 Singapore 11%,    15%, Germany  11%, Germany 10%,
                                 Germany 8%, *US   8*%, US 7%*,  China 4%, Taiwan 2%
                                 7%*, China 3%     Taiwan 2%     

  350400     Peptones and        ***US 39%,***     ***US 36%,*** Netherlands 37%, US
             derivatives; other  Netherlands 29%,  Netherlands   32%, Japan 11%,
             proteins and        Brazil 14%        30%, Brazil   Brazil 8%, China 5%
             derivatives, nesoi;                   10%, UK 9%    
             hide powder,                                        
             chromed or not                                      

  040410     Whey and modified   France 36%,       France 24%,   Australia 41%,
             whey, whether or    Australia 19%,    Australia     France 22%,
             not concentrated or Ireland 13%,      20%, Finland  Netherlands 21%,
             containing added    ***US 11%***,     15%,          *US 12%,* Germany
             sweeterners         Netherlands 11%   Netherlands   2%
                                                   14%, ***US    
                                                   12%***        

  210610     Protein             ***US 42%,***     ***US 32%,*** Japan 39%, *US
             concentrates and    Netherlands 12%,  Japan 30%m    27%*, China 16%,
             textured protein    Japan 10%, China  Netherlands   Australia 5%,
             substance           9%, Australia 7%  9%, China 6%, Netherlands 3%
                                                   Australia 5%, 
                                                   Taiwan 4%,    
                                                   Germany 3%    

  110520     Flakes, granules    ***US 84%,***     ***US 77%,*** US 70%, Germany
             and pellets of      China 2%,         Germany 9%,   12%, Singapore 11%,
             potatoes            Malaysia 2%       Netherlands   Malaysia 4%
                                                   7%, Singapore 
                                                   3%            

  020629     Offal of bovine     Australia 49%,    Australia     Australia 46%, NZ
             animals, edible,    ***US 27%,*** NZ  42%, NZ 30%,  38%, *US 15%*
             nesoi, frozen       19%,              ***US 26%***  

  200410     Potatoes, including ***US 37%,***     Canada 34%,   Canada 36%, *US
             French fries,       Canada 34%m       Malaysia 17%, 26%*, Malaysia 15%,
             prepared or         Malaysia 22%, NZ  ***US 14%,*** NZ 13%, Australia
             preserved otherwise 5%                Singapore     6%
             than by vinegar or                    14%,          
             acetic acid, frozen                   Netherlands   
                                                   12%, NZ 6%    

  200520     Potatoes prep or    Australia 51%,    *US 56%,*     *US 91%,* Australia
             presv ioth wise     Batam/Indonesia   Australia     7%
             than by vinegar,    free port 20%,    25%,          
             nor frozen          Singapore 12%     Netherlands   
                                                   12%           

  071010     Potatoes, uncooked  ***US 68%,***     NZ 50%, ***US ***US 50***%, NZ
             or cooked by        Singapore 13%,    38%***,       33%, Netherlands
             steaming or boiling Netherlands 7%,   Netherlands   8%, Canada 4%,
             in water, frozen    NZ 6%, Hongkong   9%, China 1%  China 2%
                                 4%                              

  170219     Lactose in solid    Netherlands 51%,  Thailand 49%, *US 46%,*
             form and lactose    *US 19%,*         Netherlands   Netherlands 26%,
             syrup, nesoi        Thailand 12%,     24%, *US      Germany 9%, France
                                 China 6%, NZ 5%   10%,* China   7%, Japan 6%,
                                                   8%, NZ 4%     Canada 3%, NZ 2%

  230910     Dog, and cat food,  ***US 32%,***     ***US 39%,*** Australia 38%,
             put up for retail   Australia 32%,    Australia     Thailand 27%, ***US
             sale                Thailand 25%      28%, Thailand 24%,*** Singapore
                                                   24%           3%

  020230     Meat of bovine      Australia 68%, NZ Australia     NZ 66%, Australia
             animals, boneless   27%, *US 5%*      65%, NZ 28%,  29%, *US 4%*
             frozen                                *US 5%*       

  080510     Oranges, fresh      China 26%,        Australia     China 32%, Pakistan
                                 Pakistan 20%,     23%, China    21%, Australia 16%,
                                 Australia 13%,    18%, Brazil   Brazil 7%, Egypt
                                 Egypt 10%, South  16%, Egypt    5%, Argentina 5%,
                                 Africa 9, Brazil  10%, Pakistan *US 4%*
                                 8%, ***US 7%***   9%, South     
                                                   Africa 8%,    
                                                   ***US 8%***   

  130232     Mucilages &         *US 36%,* India   *US 36%,*     India 41%, *US
             thickeners, whether 22%, Denmark 12%, India 33%,    37%,* Pakistan 9%,
             or not moif derv    Pakistan 8%,      Pakistan 13%, Denmark 4%
             from locust beans   Singapore 7%,     Singapore 7%  
                                 Taiwan 5%                       

  040630     Cheese, processed,  NZ 50%m Australia NZ 41%,       Australia 55%, NZ
             not grated or       32%, France 9%,   Australia     32%, *US 5%,*
             powdered            ***US 4%***,      25%, ***US    France 4%,
                                 Netherlands 4%    18%,***       Netherlands 3%
                                                   Netherlands   
                                                   9%, France 6% 

  13021200   Vegetables Saps &   *US 83%,* China   *US 77%,*     ***US 52%,*** Iran
             extract of          5%, South Korea   Singapore     27%, Singapore 12%,
             liquorice           4%                16%, Germany  China 9%
                                                   3%, Hongkong  
                                                   3%            

  071290     Vegetables, Nesoi,  China 61*%, US    China 62%,    China 54*%, US
             dried and vegetable 13%,* Singapore   *US 21%*,     24%*, Singapore 10%
             mixtures dried      8%, Taiwan 3%     Singapore 5%  
             (whole, cut,                                        
             sliced, etc) but                                    
             not further prep.                                   

  080620     Grapes Dried        China 24%, *US    Iran 20%, *US *US 40%,* Iran 36%,
                                 20%*, Turkey 18%, 19%*, South   South Afrika 9%,
                                 South Africa 13%, Africa 18%,   United Arab
                                 Iran 9%,          China 16%,    Emirates 5%, Turkey
                                 Australia 7%,     Turkey 13%    5%
                                 Singapore 5%                    
  ---------- ------------------- ----------------- ------------- -------------------

# SECTION V. KEY CONTACTS AND FURTHER INFORMATION

+-------------+------------+------------------+-----------+-----------+
| *           |            |                  |           |           |
| *Government |            |                  |           |           |
| of          |            |                  |           |           |
| Indonesia   |            |                  |           |           |
| Contacts    |            |                  |           |           |
| for Food &  |            |                  |           |           |
| Beverage    |            |                  |           |           |
| Control**   |            |                  |           |           |
+-------------+------------+------------------+-----------+-----------+
| **Org       | **Contact  | **Address**      | **Phone** | **Fax**   |
| anization** | Person**   |                  |           |           |
+-------------+------------+------------------+-----------+-----------+
| POM         | Drs.       | Jl. Percetakan   | 62-21-    | 62-21     |
| (National   | Sampoerno, | Negara 23,       | 424-4688; | -425-0764 |
| Agency for  | Head       | Jakarta Pusat,   | 424-3605  |           |
| Drug and    |            | Indonesia        |           |           |
| Food        |            |                  |           |           |
| Control)    |            |                  |           |           |
+-------------+------------+------------------+-----------+-----------+
| Ministry of | Ir. Mathur | Central Office   | 62-21     | 62-21     |
| Agriculture | Riady, MA  | of Agriculture,  | -781-5580 | -781-5581 |
| -Department | --         | , C Bld, 6^th^   |           |           |
| of          | Director   | Floor,           |           |           |
| A           | General    | Departemen, Jl.  |           |           |
| griculture- |            | Harsono R.M.     |           |           |
| Directorate |            | No.3, Jakarta    |           |           |
| General of  |            | 12550, Indonesia |           |           |
| Livestock   |            |                  |           |           |
| Services    |            |                  |           |           |
+-------------+------------+------------------+-----------+-----------+
| Ministry of | Ir. Syukur | 1^st^ Floor,     | T: 62-21  | F:        |
| Agriculture | Iwantoro,  | Building E, Jl.  | 781-6481, | 6         |
| -- Agency   | MS., MBA   | Harsono RM. No.  | 780-5641  | 2-21-781- |
| for         | --         | 3, Ragunan,      | to 44 ext | 6481/6483 |
| A           | Director   | Jakarta 12550    | 1103      |           |
| gricultural | General.   |                  |           | <sy       |
| Quarantine  |            |                  |           | ukur@dept |
|             |            |                  |           | an.go.id> |
+-------------+------------+------------------+-----------+-----------+
| *           |            |                  |           |           |
| *Indonesian |            |                  |           |           |
| Trade       |            |                  |           |           |
| Association |            |                  |           |           |
| Contact     |            |                  |           |           |
| List**      |            |                  |           |           |
+-------------+------------+------------------+-----------+-----------+
| APRINDO     | Mr.        | E-Trade          | 62-21-    | 62-21-    |
| (Indonesian | Handaka    | Building, 3^rd^  | 315-4241; | 3192-3267 |
| Retail      | Santosa,   | Floor, Jl. Wahid | 392-8545  |           |
| Merchants   | Ketua      | Hasyim No.55.    |           | <a        |
| A           |            | Jakarta 10350,   |           | prindo@cb |
| ssociation) | Satria     | Indonesia        |           | n.net.id> |
|             | Hamid      |                  |           |           |
|             | Ahmadi S.  |                  |           |           |
|             | --         |                  |           |           |
|             |            |                  |           |           |
|             | Kep. Secr. |                  |           |           |
+-------------+------------+------------------+-----------+-----------+
| ASIBSINDO   | Drs.       | Plaza Dwima I,   | 62-21     | 62-21     |
| (Indonesian | H          | Lt IV            | -420-6544 | -420-6544 |
| Fruit &     | endrawan - |                  |           |           |
| Vegetables  | Chairman   | Jl. Jend. A.     |           | <k        |
| Importers   |            | Yani Kav 67      |           | ahansamit |
| A           |            |                  |           | rabuana@y |
| ssociation) |            | Jakarta Pusat    |           | ahoo.com> |
+-------------+------------+------------------+-----------+-----------+
| ASPIDI      | Mr. Thomas | Jl. Ciputat Raya | 62-21-    | 62-21-    |
|             | Sembiring, | No. 351,         | 7279-3417 | 7279-3419 |
| (           | President  | Kebayoran Lama,  | &         |           |
| Association |            | 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       |           |           |
| Association | MBA,       | 13420, Indonesia |           |           |
|             | Chairman   |                  |           |           |
+-------------+------------+------------------+-----------+-----------+
| IPS (Dairy  | Mr. Sabana | Wisma            | 62-21-    | 62-21-    |
| Processor   | , Director | Nestle,5^th^ .   | 7883-6000 | 7883-6001 |
| A           | & Mr.      | Arcadia Office   | ext 1501  |           |
| ssocaition) | Syahlan    | Park, Jl. Letjen |           |           |
|             | Siregar    | T.B. Simatupang  |           |           |
|             | (          | Kav 88, Jakarta  |           |           |
|             | Secretary) | 12520            |           |           |
+-------------+------------+------------------+-----------+-----------+
| GAPMMI      | Ir. Thomas | Duta Mas         | 62-21     | 62-21     |
| (Indonesian | Dharmawan  | Fatmawati, Blok  | -720-9181 | -723-0391 |
| Food &      | --         | D-I No. 30,      |           |           |
| Beverage    | Executive  | Jakarta 12150    |           | <gapm     |
| Association | Director   |                  |           | mi@indosa |
| )           |            |                  |           | t.net.id> |
+-------------+------------+------------------+-----------+-----------+
| Indonesian  | Ir.        | IBA Building,    | 62-21     | 62-21     |
| Cold Chain  | Hasanuddin | 2^nd^ Floor, Jl. | -797-2311 | -797-2519 |
| Association | Yasni, MM  | Raya Pasar       |           |           |
| (AR         | Executive  | Minggu No. 2     |           | <ar       |
| PI/Asosiasi | Director   | B-C, Pancoran,   |           | pi@arpion |
| Rantai      |            | Jakarta 12780    |           | line.org> |
| Pendingin   |            |                  |           |           |
| Indonesia)  |            |                  |           | <hsyas    |
|             |            |                  |           | 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,   |           |             |             |            |
| FMI           |           |             |             |            |
+---------------+-----------+-------------+-------------+------------+
| 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 \#   | 651-4752    | 651-4753   |
| Windutama     | Director  | 402 Blok    |             |            |
|               |           | C-2,        |             | E-mail:    |
| Country       |           | Boulevard   |             | [asagra    |
| r             |           | Mitra       |             | in@indosat |
| epresentative |           | Sunter, Jl. |             | .net.id]{. |
| for U.S.      |           | Yos Sudarso |             | underline} |
| Grain Council |           | Kav 89,     |             |            |
| and American  |           | Jakarta,    |             |            |
| Soybean       |           | Indonesia   |             |            |
| Association   |           | 14350       |             |            |
+---------------+-----------+-------------+-------------+------------+
| 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   |             | [ec        |
|               |           | 207538      |             | hoon@usmef |
|               |           |             |             | .com.sg]{. |
|               |           |             |             | underline} |
+---------------+-----------+-------------+-------------+------------+
| 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} |
+---------------+-----------+-------------+-------------+------------+
| 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  | Wisma       | (60-3)      | (60-3)     |
| Council       | Rameker - | SOCFIN,     | 2095-9826   | 2096-2053  |
|               | Regional  | Peti Surat  |             |            |
|               | Director  | #06         |             | E-mail:    |
|               |           |             |             | [kra       |
|               |           | Tingkat     |             | meker@usgc |
|               |           | Tiga, Jl    |             | .com.my]{. |
|               |           | Semantan    |             | underline} |
|               |           | 50490       |             |            |
|               |           |             |             |            |
|               |           | Kuala       |             |            |
|               |           | Lumpur      |             |            |
+---------------+-----------+-------------+-------------+------------+

#  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 1: STATISTICS

## A. KEY TRADE INFORMATION FOR INDONESIA

  --------------------- ------------- --------------- ----------- ---------- ---------- -----------
  **Item**              **Import from                             **U.S.                
                        the World                                 Market                
                        (million)**                               Share                 
                                                                  (%)**                 

                        **2004**      **2003**        **2002**    **2004**   **2003**   **2002**

  **Agricultural        **5,035**     **4,281**       **4,185**   **18**     **23**     **19**
  Products**                                                                            

  **Consumer-Oriented   **1,216**     **897**         **862**     **11**     **11**     **11**
  Agr.**                                                                                

  **Fish & Seafood      **87**        **33**          **29**      **3**      **4**      **5**
  Products**                                                                            

  **Demographic                                                                         
  Information:                                                                          
  Indonesia**                                                                           

  **Total Population                  **217**         **Annual                          **1.43%**
  (million) in 2004**                                 Growth Rate                       
                                                      in 2004**                         

  **Urban Population                  **90**          **Annual                          **Na**
  (million) in 2002**                                 Growth Rate                       
                                                      in 2002**                         

  **Number of major                   **10**                                            
  Metropolitan Areas**                                                                  

  **Size of the Middle                **33**          **Growth                          **Na**
  Class (millions) in                                 Rate in                           
  2004**                                              2004**                            

  **Per Capita Gross                  **US\$1,195**                                     
  Domestic Product in                                                                   
  2004**                                                                                

  **Unemployment Rate                 **9.9%**                                          
  in 2004**                                                                             

  **Per Capita Food                   **USD174\***                                      
  Expenditures in                                                                       
  2004**                                                                                

  **Percent of female                 **51%**                                           
  Population Employed                                                                   
  in 2003**                                                                             

  **Exchange Rate (US                 **See below**                                     
  \$ 1= X.X. local                                                                      
  currency)**                                                                           

  **\*: Average per                                                                     
  capita expenditure                                                                    
  US\$317 (55% of those                                                                 
  is for food); US                                                                      
  \$1=IDR 8,900 (                                                                       
  average in 2004)**                                                                    
  --------------------- ------------- --------------- ----------- ---------- ---------- -----------

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

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

  1997          2,387    2,403    2,418    2,443    2,458    2,450    2,528    2,190    3,350    3,700    3,740    5,700

  1998          13,513   9,377    8,740    8,211    10,767   15,160   13,850   11,700   11,314   9,142    7,755    8,100

  1999          9,419    8,992    8,778    8,632    8,179    6,750    6,989    7,736    8,571    6,949    7,439    7,161

  2000          7,414    7,517    7,598    7,988    8,728    8,742    9,055    8,370    8,891    9,483    9,524    9,385

  2001          9,488    9,914    10,460   11,675   11,375   11,440   9,525    8,670    9,675    10,435   10,430   10,200

  2002          10,383   10,222   9,779    9,441    9,823    8,741    9,171    8,938    9,057    9,257    9,020    8,929

  2003          8,877    8,917    8,957    8,711    8,274    8,259    8,643    8,488    8,468    8,627    8,537    8,528

  2004          8,417    8,439    8,586    8,631    9,290    9,406    9,104    9,257    9,189    9,099    9,018    9,355

  2005          9,165    9,260    9,486    9,570    9,495    9,713    9,819    9,970                               
  ------------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------

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

## B. CONSUMER FOOD & EDIBLE FISHERY PRODUCT IMPORT

![](media/image2.wmf)

## ![](media/image3.wmf)C. TOP 15 SUPPLIERS OF CONSUMER FOODS & EDIBLE FISHERY PRODUCTS

# APPENDIX II: CALENDAR OF ENDORSED TRADE SHOWS IN INDONESIA

> Name of Event **FOOD, HOTEL & TOURISM BALI 2006**
>
> Event Location Bali International Convention Center, Nusa Dua - Bali,
> Indonesia
>
> Industry them The 5^th^ International Exhibition for Equipment, Food,
> Beverages and Services to Support Indonesia's Tourism and Hospitality
> Industries; The 4^th^ International Retail Technology, Equipment,
> Display, and Storage Exhibition
>
> Date of Event February 9-11, 2006
>
> 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/)

> 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 28-31 March, 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/)

# APPENDIX III: DEFINITION

  ----------------------------------- -----------------------------------
  Convenience store                   Shop selling a wide range of goods
                                      with extended opening hours.
                                      Usually abbreviated to c-store

  Co-operative                        Co-operatives are societies
                                      affiliated to the worldwide
                                      federation of co-operative, founded
                                      in 1895 to promote fair trading. In
                                      each country where co-operative
                                      function there are a number of
                                      societies controlling a series of
                                      retail outlets.

  Hypermarket                         Store with a sales area of over
                                      2,500 sq m, with at least 35% of
                                      selling space devoted to non-foods.
                                      Frequently on out-of-town sites or
                                      as the anchor store in a shopping
                                      center

  Independent grocers                 A retailer owning and operating one
                                      or more (but fewer than 10) retail
                                      outlets, but not affiliated to any
                                      other business; mainly family
                                      business or partnership

  Supermarket                         The most widely used definition is
                                      that of store with a selling areas
                                      of between 400 and 2,500 sq m,
                                      selling at least 70% foodstuffs and
                                      everyday commodities

  Wet markets                         Wet markets are covered development
                                      that sell a wide variety of fresh
                                      food produce such as meat, fish,
                                      fruit, and vegetables. They
                                      generally only open in the morning,
                                      from 5:00 AM to 11:00 AM, and each
                                      wet market contain an average of
                                      150 stall/others

  Department stores                   A store with a sales area of at
                                      least 2,500 sq m, selling mainly
                                      non-food merchandise and at least
                                      five lines in different
                                      departments. They are usually
                                      arranged over several floors.

  Café's/Bars                         Encompasses all establishments
                                      where the focus is on drinking
                                      either alcoholic or non-alcoholic
                                      drinks and where food is also
                                      served. While a wide variety of
                                      snacks and full meals are offered,
                                      it is not uncommon for customers to
                                      only order a drink

  Full service restaurants (FSR)      Encompasses all sit-down
                                      establishments where the focus is
                                      on food rather than on drink. It is
                                      characterized by table service and
                                      a relatively higher quality of food
                                      offering to quick-service units. It
                                      also includes a'la carte,
                                      all-you-can-eat and sit --down
                                      buffets within restaurants
  ----------------------------------- -----------------------------------