Halal Industry

Indonesian company secures loan to double rendang exports to Saudi Arabia for hajj 2020

JAKARTA – An Indonesian company will double its exports of packed rendang to Saudi Arabia for hajj 2020 after securing a loan that will allow it to expand its production facilities.

PT Kuliner Makmur Sejahtera, the company behind Katuju Indonesia, will export 400,000 vacuum-sealed packs of meat-based rendang worth 32 billion Indonesian rupiah ($2.27 million) for hajj next year. The company received orders for 200,000 packs of the famous spicy meat dish for hajj 2019.

The SME (small and medium-sized enterprise) will be able to produce the 100 tonnes thanks to a new loan, Ade Surianto, its president director told Salaam Gateway on Friday (Nov 15) at the Indonesia Sharia Economic Festival (ISEF).

Kuliner Makmur Sejahtera received a 3.75 billion rupiah ($266,469) 3-year loan from PT Dama Nusantara Group, a commodity company from West Sumatra, that will be used to upgrade its production facility.

The aim is to buy machinery to increase production at its factory in Padang from about 13.5 tonnes per month to 20 tonnes per month, or about 240 tonnes per year.

Currently, production is not at full capacity. Ade said the company currently sells 600 to 900 kilograms a month, earning it up to 288 million rupiah ($20,479). Katuju Indonesia sells for 80,000 rupiah a pack of 250 grams. 

The company will push production during March to May next year to 30 tonnes per month to meet the export deadline for the hajj season that will start at the end of May.

"We actually received [two] orders of 200 tonnes, 100 tonnes from the Saudi government and [another 100 tonnes from] one of its corporates but our current production capacity can't handle that,” said Ade.

Kuliner Makmur Sejahtera will fulfil the first order that was put in, from the Saudi government.

The increased order came after the company participated in September in a business matching event with potential investors in Jeddah, organised by Indonesia’s Ministry of Foreign Affairs. The Indonesian government also flew over other SMEs to promote their exports to Saudi Arabia, including poultry supplier Phalosari, The Paradise World Resort, Naiila Halal Nail Polish, Islamic Fashion Institute, CIMB Niaga Syariah, garment manufacturer Epic Group, and Harum Qalbu Gelatin Factory.

Katuju also has its eyes set on exporting to other markets, especially countries with a large Indonesian diaspora such as Malaysia, Japan, Hong Kong, the United States and South Korea.

"From our total production volume, 40% will be channelled to export markets, 30% we will sell to the domestic market such as our own outlet in Padang and our resellers in Jakarta, Bandung, Cirebon, Depok, Aceh, Majalengka and Tegal, and the remaining 30% we will sell for white labels," said Ade.

The company that currently partners with local e-commerce unicorn, Bukalapak, is also mulling selling on eBay and Amazon to reach a bigger consumer base.

Katuju will be supported by the Ministry of Cooperatives and SMEs through its UKM 4.0 programme that curates products identified as being able to sell directly on global e-commerce platforms.

"We have collaborated with companies that have permits to keep goods in the bonded warehouse (for lower tariff incentives), we only pay administrative costs to them and Rendang Katuju can be directly ordered on eBay and Amazon. We hope to join them in December at the earliest," said Ade.

He added that as an herbs and spices supplier, PT Dama Nusantara Group can also leverage the deal to drive its own commodity business as Katuju Indonesia uses a lot of spices to produce large quantities of rendang.

Kuliner Makmur Sejahtera started in August 2017 and since then has partnered with more than 100 resellers, dropshippers, white labels (re-branding), travel agencies, hotels, and catering services including Sofyan Hotel, online travel agency Pegi Pegi, and unicorn companies such as e-commerce giant Bukalapak and tech firm Gojek.

($1 = 14,069 Indonesian rupiah)

(Reporting by Yosi Winosa; Editing by Emmy Abdul Alim emmy.abdulalim@salaamgateway.com)

© SalaamGateway.com 2019 All Rights Reserved

*2 corrections were made in Para 5 and Para 12 on Nov 19: The location of the company's factory is in Padang and not Palembang, and the outlet is Padang and not Palembang