With more than 40% of its revenue coming from the international market, Mayora has now started operations in China and India. By GlobeAsia team
Mayora Indah has become a leading food and drink maker in Indonesia with significant growth in revenue and brand recognition since it was founded some 40 years ago. The group is popular with its innovative products and creative business campaigns that have helped its products maintain a place in customers’ minds for decades.
Mayora now operates in a wide range of product categories: snacks, candy and recently mineral water, where it hopes to tap growing market demand.
As a national company with a global reach, the group mostly partners with local distributors in each country to reach customers.
In certain countries with high growth such as China, Mayora has developed its marketing mix strategy to adapt with local trends in its products, promotion and even its pricing strategy. In the last two years the company has started operations in India with two plants opened and is a more recent entrant to China.
Mayora’s global marketing head Ricky Avianto says the company has made headway with two brands in overseas markets, leaving popular local brands in the dust. They are Danisa, its premium butter cookies, and the popular candy Kopiko.
Mayora commissioner Hermawan Lesama was quoted in Investor Magazine recently as stating that the global market is now contributing significantly to the group’s sales. That provides flexibility: if the home market starts to slow down, the global market provides the opportunity to meet sales targets.
Out of 81 countries to which Mayora exports, ASEAN countries still lead the international portfolio. The group has been working in this market for 20 years ago and Thailand and the Philippines are in the top two places as its biggest markets.
Currently the group is working hard to enter the China market, operating in eight provinces and starting to look beyond them. As market demand has been strong, Mayora opened its first plant in the country two years ago and has big plans for more production capacity to serve the whole country. Hermawan sees Indonesia’s spirit to aggressively tap into the world biggest market as his group’s major asset and in many ways China and Indonesia share similar cultures, helping propel the company’s sales.
To support its dream, Mayora has prepared qualified people who meet international standards. Quality of product together with loads of innovation is a key factor that has helped the company acquire a good response from international markets. With strong market research on habits, tastes and local lifestyles, some of Mayora’s products can now compete with world-class products and compete head-to-head.
Best business processes and global value-chain systems have been adopted in line with international practices. The supply chain for materials is no longer dependent on Indonesia for raw materials but meshes more directly into local markets in the target country.
With its global reach, Hermawan believes Mayora’s performance is more stable as it does not rely on a single country or region. If one country faces an economic downturn and demand is slowing, other markets can still maintain the company’s balance sheet in positive territory.
Building brand value
“We have to have good business processes to make people who work with Mayora have the similar language in its marketing plan, value and its principles,” notes Ricky, who adds that brand value is another important factor.
He believes that continuous campaigns in foreign markets have helped Mayora brands gain a presence in customers’ hearts.
Some Mayora brands enjoy strong brand heritage value while with newer products that presence has to be carefully built.
China is now Mayora’s main target to enlarge its market size. Similar in social and cultural background with the countries of ASEAN, the company has been able to elevate its Danisa product to market leadership, beating Danish brand Kelsen, an earlier entrant to the China market.
The modern company has to work as a globally integrated enterprise (GIE) instead of just a multinational company.
The third generation of the company is moving to transform the company into a truly global operation. Andre Sukendra Atmadja, the eldest son of Jogi Hendra Atmadja, acts as president director of the company while cousins Hendarta Atmadja and Wardhana Atmadja take care of supply chains and head the operations side. Andre has performed well over the past three years, with Mayora consistently putting on double-digit growth accompanied by strong expansion in international markets.
Mayora was founded by Jogi and his brothers Hendrawan, Gunawan and Dharmawan Atmadja and through their PT Unita Branindo the brothers control 32% of shares in Mayora Indah.
The leadership recognizes that despite its successes, Mayora is still in its infancy as a global company, and work is proceeding on strategies to help it grow. Modern business methods and the power of the internet in ‘creative disruption’ are being factored into the equation.
Former IBM CEO Sam Palmisano suggests that modern company practices must reflect globalization in economic practices and social systems. In its operations, the modern company has to work as a globally integrated enterprise (GIE) instead of just a multinational company.
“In this model, work is organized in fundamentally different ways. It calls for different skills and behaviors, more collaboration and transparency, more disciplined financial management, greater focus on a multiplicity of cultural differences, and less hierarchy,” says Sam.
For example, decisions about where to locate operations are based on how to maximize value for customers, employees and business partners. “Instead of taking people to where the work is, you take work to where the people are. Thus, rather than maintaining separate supply chains in different markets, there is one supply chain, and it’s global — not just for products, but also services, capital, ideas, and intellectual property,” he adds.
With food and beverage business still the biggest source of cash for Mayora, its medium-size Bank Mayora is growing its digital transaction business with an electronic payment system for its distributors throughout Indonesia, adding a new source of revenue. Collaboration with group operations enables it to grow, providing capital to assist with sales credit for distributors.
Mayora Group is by no means the only Indonesian flag carrier in consumer goods that operates in international markets. Instant noodle giant Indofood opened its first factory in Nigeria 20 years ago, while in the past two years it has established two plants in Russia’s Siberia region to produce goods for the European market as well as a plant in Morocco for the North African market. Indofood’s distribution channels have penetrated to more than 100 countries.
Others are also prominent. Sinar Mas Group and Golden Eagle Goup are just two more Indonesian majors that are establishing solid footprints across the global stage, with operations in China, India, Brazil and eastern Europe.