Mitsubishi Corporation & Ichitan Group Expand to Indonesian Beverage Market
Japan-based Mitsubishi Corporation (through its subsidiary Atri Pasifik) and Thailand’s Ichitan Group have agreed to construct a soft drinks factory in Indonesia through a fifty-fifty joint venture which will carry the name Ichitan Indonesia. The factory, which requires an investment of IDR 400 billion (USD $34.3 million), will produce various beverages but specifically various ice tea drinks under the Ichitan brand for the Indonesian market. Production at the new factory is expected to commence in 2015.
Products of Ichitan Indonesia will be the result of the combined knowledge and expertise of both parent companies. The Ichitan Group will provide solid marketing strategies and a high level of product development, whereas Atri Pasifik will contribute knowledge and experience in food manufacturing as well as a strong distribution network throughout Indonesia (comprising both modern and traditional trade channels).
Atri Pasifik, a subsidiary of the Mitsubishi Corporation, is a joint venture between Mitsubishi and Sigmantara Alfindo (Alfa Group), an Indonesian investment company. Mitsubishi Corporation is a global integrated business enterprise that develops and operates businesses across various industries such as industrial finance, energy, metals, machinery, chemicals, living essentials, and environmental business. Ichitan is currently the largest ice tea beverage producer in Thailand.
Research conducted by Mitsubishi Corporation indicates that the Indonesian beverage market is estimated to have a growth rate of 13 percent per year mainly on rising purchasing power of a rapidly expanding Indonesian middle class. The value of this market is expected to increase from JPY 400 million in 2013 to JPY 1 billion by 2020. After mineral water, ice tea drinks are the second most popular beverage in Indonesia.
Suroso Natakusuma of the Indonesian Soft Drink Industry Association (Asrim) said that the soft drink market in Indonesia is lucrative due to the young and large population (250 million) and rising purchasing power. These features work as a magnet on foreign investors. In 2013, Indonesia’s soft drink market was worth IDR 180 trillion (USD $15.5 billion).