Big Indonesian FMCG companies target opportunities in Nigeria’s retail market

Big Indonesian Fast Moving Consumer Goods (FMCG) companies are courting Nigeria’s retail market and its behemoth of consumers because Africa’s most populous nation has a growing aspirational middle class.

Indonesia is working to improve bilateral relations with Nigeria, promote business ties and improve people-to-people relations between both countries. The balance of trade between Indonesia and Nigeria in 2014 was $4 billion but came down to $2 billion in 2015 and further down to $1.8 billion in 2016, Harry Purwanto, the Indonesian Ambassador to Nigeria, said, April 2017 during a press briefing in Abuja.

“Our main objective is to promote Indonesian products in the Nigerian market and strengthen bilateral relations between the two nations and between Indonesia and West African countries” Bagus Wicaksena, Director, Indonesian Trade Promotion Centre, Lagos, told BusinessDay in an exclusive interview at the Food West Africa 2018, in Lagos, the leading food and beverage trade exhibition in West Africa.

Indonesia wants to boost its export development to non-traditional countries, besides Europe, the United States of America and Asia. “We see that Africa is going to be our new potential partner, in terms of trade or investments. Africa has been developing fast. Nigeria in particular is one of our potential markets because its large population represents a huge market opportunity. Nigeria is our gateway to the West African market, especially. Nigeria has growing middle class in addition to its large population” Wicaksena said.

The Indonesian Trade Promotion Centre has been in Nigeria since 2009/2010, designed to promote especially non-oil and gas products. It is part of the Ministry of Trade in Jakarta, Indonesia.

These Indonesian FMCGs are looking for anchors in Nigeria, they want Nigerian distributors for their products. Four big Indonesian FMCG companies seeking to break into the Nigeria retail and consumer goods market include; Mayora Group, which began producing biscuits in 1948 but has long become a giant in the Indonesian packaged food industry whose products can be purchased in more than 100 countries on five continents.

“We are the second largest food producers in Indonesia and have been exporting to Nigeria since 1994. We set up shop in Nigeria in 2014 but closed shop in 2016 due to dollar shortages that made it difficult for us to pay our parent company in Indonesia. Now, we rely on Nigerian distributors to export our products to Nigeria” Dipa S. Komala, Group Country Manager in Nigeria, Mayora Group told BusinessDay.

“We are an export driven company, 49 percent of our $2 billion sales revenue in 2017 came from export. We have over 35, 000 employees and 3, 800 of these are outside Indonesia. We have 32 manufacturing facilities around the world. Some are in India, Denmark, China, Thailand and Lebanon. We plan to build a manufacturing facility in Nigeria” Komala surmised.

Dua Kelinci is another Indonesian FMCG firm looking to break into the Nigerian retail and consumer goods market. Established in 1985 and has vast experience in the food industry. It exports to Europe, the Middle East, Canada, USA, India and China.

“In Indonesia we are one of the leading companies for peanuts and snacks, our sales volumes last year was over $2 billion. We are present in many countries around the world and are now focusing on developing products for the African market. We have been in the African market since 2015 and in Nigeria we started in 2016” Abdullah Mujahid, Head of Area International at Dua Kelinci, told BusinessDay.

“We are here because of the population, it’s a big market and consumption is big too. We are working hard to understand the demand pattern and develop competitive pricing that is affordable” Mujahid said.

The other two of the four big Indonesian FMCG companies are Marizafoods and Kapal Api Global. Marizafoods exports to Saudi Arabia, China, Russia, Singapore, USA, Australia and the United Kingdom but without any footprint on the African continent.

Kapal Api products have been exported to more than fifty countries. It has more than 50 percent market share in Indonesia’s coffee industry.

STEPHEN ONYEKWELU