Anticipating The Increase In Raw Material Prices, HOKI Continues To Diversify Business

JAKARTA One of the rice producers, PT Buyung Poetra Sembada Tbk (HOKI) posted 34 percent annual sales growth to IDR 888.50 billion in the third quarter of 2023.

By taking advantage of the momentum for the ongoing increase in sales, HOKI is increasingly intensifying efforts to diversify its business being taken.

Director of HOKI, Budiman Susilo conveyed that in anticipation of the rice trading business situation which was colored by the increase in raw material costs, the Company was increasingly intensifying measures as part of the business diversification strategy that had been established.

"Through business diversification, the Company as a group will have a better ability to mitigate business risks that block it," Budiman said in his statement, Sunday, November 5.

In addition to developing a fast moving consumer goods (FMCG) business with Daily Meal branded products, HOKI has also entered the financial investment business through the establishment of PT Hoki Investasi Sejati (HIS) in 2022.

Meanwhile, HIS is currently actively carrying out financial investment activities, including through investing in quality shares on the Indonesia Stock Exchange.

Meanwhile, a subsidiary of the Company PT Hoki Distribution Niaga (HDN), a fast moving consumer goods (FMCG) producer with the Daily Meal brand posted sales of IDR 3.5 billion, an increase of 843 percent on an annual basis. The increase in HDN sales is a guide for the Company's transformation into FMCG, which is on the right track.

"Looking at the promising development of the FMCG business, we are ready to boost the production of Daily Meal products to capture opportunities that arise from the increasing public need for healthy food products," said Budiman.

For this reason, HDN has signed a joint venture agreement (JV) with PT Gita to build a healthy rice factory which is expected to start operating in early 2025.

With the construction of the new healthy rice factory, it can increase the production capacity of Rice Daily Meal Rice, which of course will also be accompanied by the ongoing release of the new product variant Daily Meal Rice.

Budiman hopes that before the end of 2023, he will issue 2 new product variants of Daily Meal Rice consisting of corn rice and cassava, and Daily Meal Eats, namely Nusantara Culinary Heritage Rice such as kebuli rice, goring rice, nasi uduk, and other variants that will also continue to grow.

Meanwhile, the growth of the rice sales business, which is the main business of HOKI, is currently hampered because there is an increase in the cost of goods sold while the highest retail price does not increase.

Therefore, HOKI's cost of goods sold was recorded at IDR 819.97 billion, up 39 percent from the same period the previous year, so that gross profit fell to IDR 68.52 billion compared to the same period in 2022 which amounted to IDR 75.51 billion.

Coupled with an increase in operating expenses which reached 30 percent on an annual basis to Rp75.56 billion, HOKI posted a loss for the year attributable to owners of the parent entity of Rp12.58 billion, when compared to a profit of Rp1.79 billion in the same period the previous year.