Established in 1972, Siantar Top focused on producing snacks and is located in East Java. In 1996, the company was listed on the Indonesia Stock Exchange (IDX). Its famous products include Superman wafers, Twitsko roasted corn, French Fries 2000 and Enaak instant noodles.

Rising raw material prices

Siantar Top will focus on strengthening its business using its Capex to procure new types of machinery. The company will use the new machines to increase the quality of its factories and add new production lines.

"The capex allocation will be used for working capital needs, increasing production and dividend distribution which will be carried out in July," Siantar Top President Director Armin told kontan.co.id on March 1, 2023.

The company hopes to increase its work rate this year, targeting better net sales growth of 2 digits. It will also target an increase of net profits under 10%. It hopes to add new production lines from its procurement of machinery and targets a 20% increase in capacity as well. The company plans to launch new products soon.

Siantar Top hopes that the increase in raw material prices and limited supplies due to the Russia-Ukraine war will not recur as it affects the price of wheat, flour and other raw materials.

"In addition, there are obstacles in terms of shipping and delivery of shipping containers because we import material from outside. It affects our performance and we hope that problems like this will no longer occur in 2023," Armin said.

The company has set new strategies including the promotion of its new products and product equities in the domestic market. It will also increase its export to countries in the Asia-Pacific and the Middle East.

In addition, Armin added, before the 2023 Ramadan fasting month and the Eid holidays, the company will accelerate the capacity building increase for its new production lines to about 25-30 times as well as logistical checking, and stock supplies before Eid.

Risks in snack industry

The company is facing several risks, such as:

• Export problems. Due to the global economic conditions, it is hard to predict the risk and opportunities in foreign markets. Armin said it was not easy to add more export destinations while the global economic conditions are hard to predict, and it affects the demand for snack products.

• Material costs. With the ongoing war between Russia and Ukraine, the price of wheat and flour had tremendously increased over the past years. The increase in prices greatly affects the supply.