Broiler Market in Jakarta and Surounding Areas 2011 -August 2011

INDONESIAN COMMERCIAL NEWSLETTER

August 2011

THE MARKET OF BROILERS IN JAKARTA AND SURROUNDING AREAS

Backgrounds

Sales of chickens in Jakarta and its satellite cities - Bogor, Depok, Tangerang, and Bekasi have continued to increase from year to year to follow the growing consumption of chicken meat .

In Jakarta, chicken sales totaled around 96,265,000 in 2005 up to 171,574,000 chickens in 2009 and to an estimated 200,742,000 chickens in 2010. The increase in sales followed the trend of consumption and the country's economic growth.

Sales in Bogor were larger rising to 76,650,000 chickens in 2009 from 40,880,000 chickens in 2005. In Tangerang sales rose to 74,095,000 chickens in 2009 from 40,150,000 chickens in 2005, in Bekasi sales reached 60,650,000 chickens in 2009 and in Depok sales were recorded at 27,740,000 chickens in 2009.

Broilers are distributed mainly to modern markets, fast food chain restaurants, caterers, hotels, other restaurants and traditional markets. Among major modern market for broilers are Carrefour, Giant, Hypermart and Lotte Mart, and among fast food chain restaurants are Kentucky Fried Chicken, Mc Donald, A & W, Pizza Hut, Hoka-Hoka Bento, etc.

Broiler market volume

In Jakarta, sales rose from 96,265,000 chickens in 2005 to around 171,574,000 chickens in 2009. In 2007 sales surged 48% to 143,221,000 chickens from 96,758,000 chickens in the previous year. The surge was attributable to improved purchasing power of the consumers.

In Bogor, sales reached 76,650,000 chickens in 2009, up from 40,880,000 chickens in 2005. In Tangerang, sales rose to 74,095,000 chickens in 2009 from 40,150,000 chickens in 2005, in Bekasi sales reached 60,650,000 chickens in 2009 and in Depok sales totaled only 27,740,000 chickens in 2009.

In West Java, sales totaled around 281,780,000 chickens and in East Java around 200,233,000 chickens in 2009.

In the Greater Jakarta are that also includes Bogor, Depok, Tangerang and Bekasi sales averaged 1,125,000 chickens per day or around 1,350,000 kilograms per day in 2009.

In West Java sales averaged 772,000 chickens per day or 926,000 kgs per day, and in East Java sales were recorded at around 549,000 chickens per day or 659,000 kgs per day in 2009.

The market is larger in the Greater Jakarta area compared to West Java and East Java as Jakarta has larger consumers among modern markets, fast food chain restaurants, other restaurants and hotels as well as traditional markets (wet markets).

Distributions of broilers

The Greater Jakarta areas have modern and semi modern chicken slaughter houses such as PT. Kartika Eka Dharma and PT. Putra Mandiri in Jakarta, PT. Sierad Produce, PT. Nuyam Farm, PT. Maseng Satwa, and RPA Jambu Raya in Bogor, PT. Charoen Pokphand, PT. Ciomas Adisatwa, and UD. Petra Food, PT. Bangkit in Tangerang.

Generally broilers are distributed to customers including traditional markets (wet markets), modern markets, fast food chain restaurants, restaurants, caterers, etc.

A modern market outlet buys from 120 to- 1,500 chickens/day ; a fast food chain restaurants from 150 to 42,000 chickens/day, a caterer /hotel/restaurant buys from 15 to 2,000 chickens/day, and a wet market buys from 1,000 - 150,000 chickens per day.

Payments are made within 7 to 30 days after delivery. The payment is required in 14 days after delivery for modern distributors , 30 days for fast food chain restaurants 7 to 45 days for caterers/hotels/restaurants and around 7 days for a wet market.

Conditions set by customers

Generally customers set certain conditions to be met by supplier/ /chicken slaughter houses. Modern markets are stricter in the conditions especially on the quality of the chickens and their packaging. The suppliers/ chicken slaughter houses are required to have business license, hall certificate from the Indonesian Ulema Council (MUI), number of veterinary control (NKV) from the animal husbandry directorate general and cleanliness of slaughter houses. They regularly survey the chicken slaughter houses to ensure that the conditions are fully met. Slaughter houses are required to have own slaughtering facility. The location of the chicken slaughter house must not too far away from the modern distribution outlet considering the transport cost.

Fast food chain restaurants are also strict in the conditions to be met by their suppliers that the chicken carcass is fresh and in good quality. Chicken slaughter houses are required to have the halal certificate and business license. They are also required to have HACCP and GMP (Good Manufacturing Process) certificate which are held only by modern chicken slaughter houses. Carcasses sent to each outlet must be accompanied with document on the details of the conditions. Some fast food chain restaurants such as Kentucky Fried Chicken ask chicken slaughter houses to marinate the carcasses in line with their order (slicing the carcasses and giving spices.

Caterers/hotels/restaurants are strict in the freshness and quality of the carcasses. Chicken slaughter houses are required to have the halal certificate and business license. They do not demand them to have HACCP and GMP (Good Manufacturing Process) certificate.

Traditional markets (wet market) are more interested in prices. They are not very strict in the freshness and quality of chickens if the prices are cheap as the chicken carcasses they buy is to be sold out in the same day. Chicken traders in traditional market buy chicken carcasses from traditional chicken slaughter houses in the same location. The slaughter houses, therefore, have no HACCP and GMP certificate such as that of modern chicken slaughter houses. Many chicken traders also by live chickens from supplying centers and do he slaughtering them manually.

Major offenses

Modern markets

Giant

Giant is a hypermarket to start operation in Jakarta in 2007. Currently Giant has 95 outlets including Giant Hypermarket and Giant Supermarket. In Jakarta, it has 86 outlets. It also has 9 outlets in Jakarta's satellite cities including 1 in Depok, 3 outlets in Bekasi, 2 outlets in Tangerang and 3 outlets in Bogor.

Giant outlets buy around 300 - 500 chicken carcasses/day each. Their suppliers include PT. Ciomas Adisatwa in Tangerang, PT. Sierad Produce in Bogor and UD. Petra Food in Tangerang.

Carrefour

Carrefour started operation in Indonesia in 1988 under Continent Hypermarket SNC from France. In 2010 PT. Trans Corp of the Para Group, which is owned by tycoon Chairul Tanjung, took over 40% stake worth US$300 million in Carrefour

Currently, Carrefour has 23 outlets in Jakarta, and 12 units in its satellite cities including 5 units in Bekasi, 5 units in Tangerang, 1 outlet each in Depok and Cibinong.

Carrefour buys around 1,000 - 1,500 chicken carcasses/day/outlet.

Fast food chain restaurants

Kentucky Fried Chicken

Kentucky Fried Chicken (KFC) is a pioneer in fast food restaurant business starting operation in Jakarta in 1979. Currently KFC has 98 outlets in Jakarta and 35 outlets in its satellite cities including 10 outlets in Bogor, 11 outlets in Bekasi, 3 outlets in Depok and 11 outlets in Tangerang. KFC buys 1,000 - 1,500 chicken carcasses /day/outlet.

McDonald

McDonald started operation as a fast food chain restaurant in Jakarta in 1991. It started operation as a joint venture between US principal and Mr. Bambang Rachmadi, but Bambang Rachmadi quit after a dispute among the shareholders in 2009. Currently the shareholder of McDonald is PT. Rekso National Food, a subsidiary of the Rekso Group known with its big bottled tea business.

Currently McDonald has 50 outlets in the Greater Jakarta area McDonald buys around 150 to 300 chicken carcasses/day/outlet. Supplies to McDonald come from PT. Nuyam Farm in Bogor, PT. Maseng Satwa in Bogor, PT. Kartika Eka Dharma in Jakarta and PT. Bangkit in Tangerang.

Traditional markets (wet market)

Jakarta has 153 traditional markets under PD Pasar Jaya of the Jakarta city administration. There are also hundreds of traditional markets other than those of PD Pasar Jaya PD located in Central Jakarta, South Jakarta, West Jakarta, North Jakarta and East Jakarta.

Pasar Kranji Baru

See list of contents>>