Importance Of Certainty For Food Producing Industry

Essay by aisawinnieCollege, Undergraduate December 2011

download word file, 6 pages 0.0

Importance of Policy Certainty for

Package Food Industry:

PT Nestlé Indonesia

The optimism about Indonesia's economic future has been increased, with average incomes returning to levels experienced prior to the financial crisis of 1997. Agri food has made a significant contribution to Indonesia's GDP, growing at 4.5% per annum over the past decade. Urban populations are expanding rapidly, incomes are increasing and more women are entering the workforce. Modern retail outlets, increasing consumer sophistication, growing health consciousness and interest in new foods are currently driving sales.

The sector is expected to grow 25.7% from 2009-2013. Positive growth is expected in almost every segment, including dairy, dried processed food and bakery products, which are currently the three largest packaged food segments.

Uncertainty for Nestlé

The explanation above shows that investing in food package industry in Indonesia is promising to the investors. However, there are still many of governance issues to resolve.

One of the biggest concerns of food industry is about the certainty of regulation in Indonesia. Government policies which related to food industries interest are still keeping on changing. Some changes can be caused by the change of person in charge of some position, for example in the ministry. Since most of the ministers who are chosen are politician, the policies can be also based on political interest.

PT Nestlé Indonesia is the subsidiary of Nestlé SA, Switzerland-based nutrition health and wellness products. This company is categorized as agricultural processing or agro processing industries or having role as "downstream" linkage for the post-process stages. The company has operated in Indonesia since 1971 and hired more than 2,600 employees. The products vary from nutritious food and beverages for toddler, cereals, milk and also snacks. This second largest package food company in Indonesia, for example, has just spent 100 million dollars...