Indofood Controls 1.9% of Global Instant Noodle Market

Indofood controls around 74 to 77 percent of the national instant noodle market. (BLOOMBERG/DIMAS ARDIAN)

JAKARTA (IFT) - PT Indofood Sukses Makmur Tbk (INDF), food manufacturer, is the sixth largest instant noodle manufacturer in the world, according to Bloomberg data. Indofood, which relies on Indomie brand, controlled 1.9 percent global market share in 2009, and is estimated not to have much change in 2010.

The global instant noodle market grew an average of 9.7 percent CAGR during 2004-2009. In 2009, global instant noodle market value was US$ 34.8 billion. In the top ten of instant noodle manufacturers in the world, Japanese and Chinese manufacturers control 29.4 percent of market share. There are three Japanese and two Chinese manufacturers which controlled most of the global instant noodle market.

Nissin Food Holdings Co Ltd, a manufacturer from Japan, leads the global market with its brand, Nissin. Nissin Food’s market share reached 12.2 percent in 2009. Two other companies, Toyo Suisan Kaisha Ltd and Sanyo Foods Co Ltd were in second and third place with market shares of 8.7 percent and 7.9 percent, respectively.

In China, Baixiang Food Company produces Baixiang brand instant noodles, and Jin Mai Lang Food Co Ltd produces Hua Lang and Jin Mai Lang instant noodle brands. Baixiang controlled 2.6 percent, and Jin Mai Lang controlled 3.3 percent of global instant noodle market.

In Indonesia, Indofood controls around 74 to 77 percent of the national instant noodle market. Indofood’s market share is declining with tight competition in the domestic market with the entrance of Wings Group, ABC Group, PT Nissin Mas, PT Olagafood Industri Makanan dan Minuman, and PT Tiga Pilar Sejahtera Food Tbk (AISA) to the instant noodle business.

Indofood Sukses Makmur operates instant noodle production and distribution through its subsidiary, PT Indofood CBP Sukses Makmur Tbk (ICBP). The company’s instant noodle sales reached Rp 12.65 trillion (US$ 1.44 billion). In the first half of 2011, instant noodles sales were at Rp 6.55 trillion, up by 4.2 percent year-on-year (YOY). This division’s sales value also included sales from packaging division.

Indofood will invest Rp 700 billion to develop three instant noodle factories.

In a written statement to IFT, the company’s management explained that they are building an instant noodle factory in Jakarta to consolidate the two plants that has already operated in the area. The new factory is targeted to be completed and start operation in 2012. Indofood is also constructing an instant noodle factory in Palembang, which is targeted to operate in 2012. Another factory will be developed in Semarang, which will operate in 2014.

Indofood Sukses Makmur’s share price on Friday’s trade gained 4.1 percent to Rp 5,050. Indofood CBP’s share price also climbed by 4.2 percent to Rp 4,925.