PTPN VIII Targets Packaged Tea Monthly Sales of 500 Tons

17 November 2011

JAKARTA (IFT) – PT Perkebunan Nusantara VIII (PTPN VIII) aims to sell 500 tons of its Walini packaged tea or a sale value of Rp 3 billion per month. Agus Supriyadi, Director of Tea Commodity at PTPN VIII, said the company was focusing on increasing its production and sales of packaged tea to boost the performance of the company’s downstream tea industry.

Currently, the sale of packaged tea only contributes a small amount to PTPN VIII’s total sales and production. Out of the targeted 30,000 tons of packaged tea produced, the company has only managed to make 6,000 tons. Meanwhile, its packaged tea is given a target sale value of between Rp 36 billion – Rp 40 billion per year in comparison to the total revenue target of Rp 2.1 trillion.

Since PTPN VIII began producing packaged tea in 2006, the public has welcomed its products. The company projects a 10 percent growth per year for the sale value of packaged tea.

The production of packaged tea is also a part of the company’s strategy to increase earnings. PTPN VIII gains added value from packaged tea as it could sell for four up to five times of the price of bulk tea.

To expand its market, the company will produce 11 flavors of packaged tea, including black tea, green tea and vanilla tea. The company is also producing ready-to-drink tea. “We are going for the young market because it has a huge population,” he said.

PTPN VIII has a packaged tea factory with a capacity of 10,000 master cartons per month in Cibiru, Bandung.

Farchad Poeradisastra, Chairman of the Indonesian Soft Drink Association, said teenagers and children are the boosters in processed tea consumption. Data from the Ministry of Industry shows that, out a number of soft drinks variants, processed tea posts the highest growth in market value in Indonesia with an average increase of 64 percent per year in the 2005-2009 period. The market value rose from Rp 63 billion in 2005 to Rp 278 billion in 2009.

Import Limits

Agus, who is also the chairman of the Indonesian Tea Board, demands that the Government limit the import of tea from Vietnam and Argentine, saying that teas from this country are of low quality and is thus priced cheaply at US$ 1 per kilogram, in effect lowering the price of tea among farmers.

Data from the Indonesian Tea Board shows that 10,000 tons of tea or 10 percent of the national tea production of 157,000 tons are imported. The Association demands the Government to raise tariff and non-tariff restrictions on imported tea to protect domestic tea production.

The import tariff for tea in Indonesia is five percent. In comparison, Turkey imposes a 65 percent import tax for tea while Sri Lanka has a 35 percent import tax.

Source: Finance Today