PT Cerestar Indonesia Tbk (TRGU), a prominent wheat flour producer listed on the Indonesia Stock Exchange, has taken a bold step to expand its storage and production capacities, signaling confidence in Indonesia’s wheat product market. This expansion, a 45% increase in storage capacity from the company’s 2018 levels, enhances its silo capacity to 203,200 metric tons (MT) at its Gresik facility in East Java.
Indra Irawan, CEO of Cerestar Indonesia, emphasized that increasing storage is critical to keeping up with the company’s rising production needs. In the third quarter of this year, Cerestar, through its subsidiary PT Harvestar Flour Mills, expanded daily wheat flour production by 600 MT, bringing its total output to 2,200 MT per day. This capacity boost aligns with the company’s strategy to meet the steady rise in demand for wheat-based products in Indonesia.
Indonesia’s wheat flour market is experiencing significant growth, fueled by increased consumer demand for wheat-based foods. The government’s pro-agribusiness initiatives have created a supportive environment for food producers, benefiting sectors focused on human food products and animal feed alike. Cerestar Indonesia has also noted that the demand for animal feed, which is closely linked to the booming livestock industry, is on the rise. With the increasing consumption of animal products in Indonesia, animal farmers are scaling up production, driving up the demand for quality feed materials like those Cerestar provides.
To diversify its offerings and capitalize on market trends, Cerestar Indonesia has committed to strengthening its presence in the animal feed segment, which currently holds a market twice the size of its traditional flour business. In the first half of 2024, Cerestar saw a 20% year-over-year sales increase, largely supported by the animal feed segment. With the new production capacity at Harvestar Flour Mills now operational, Cerestar expects an increase in flour sales toward the end of 2024, aligning with its goal of achieving a 10% revenue growth by year-end.
This expansion reflects a forward-looking strategy that integrates storage capacity with production efficiency, setting Cerestar on a path for sustained growth in both food and feed markets. As Indonesia’s economy and consumption patterns continue to evolve, Cerestar is well-positioned to benefit from and contribute to the country’s agricultural and food security landscape.
Cerestar Indonesia’s capacity expansion underscores the company’s commitment to supporting Indonesia’s increasing demand for wheat products and animal feed. By boosting both storage and production capabilities, Cerestar aims to not only meet immediate market needs but also anticipate future growth in both sectors. With strategic investments and a focus on product diversification, the company is on track to achieve its growth targets, reinforcing its role in Indonesia’s wheat processing and agribusiness sectors.
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