Eat Up
    Category: Entrepreneurs By : Yessar Rosendar Read : 3280 Date : Monday, July 08, 2013 - 00:25:59

    Ahmad Zamroni / Forbes Indonesia

    Good food makes a happy man, especially for Alwin Arifin, 57, the president director of PT Sriboga Ratu Raya. He has successfully grown Pizza Hut to become the largest casual dining restaurant by number of outlets. Pizza Hut in Indonesia has 280 restaurants in 35 different cities—at the end of last year Indonesia is the eighth biggest market for Pizza Hut in the world by number of restaurants. Pizza Hut Indonesia also has 15,000 employees that serve 3 million consumers each month

    In Indonesia, Pizza Hut opened its first restaurant 29 years ago in the Djakarta Theatre building in Jakarta. The franchise changed hand several times before Alwin got the franchise by accident in 2004. His friend was supposed to get it, but was disqualified at the last moment. His friend then asked Alwin if he was interested in having it. “I was not interested in Pizza Hut at that time because it had only 80 restaurants and the license was very expensive, but I was convinced that the potential was good,” he says.

    The previous owner, Schroder investment in Hong Kong, tendered the franchise to regional investors; many showed interest from Hong Kong, Malaysia and Indonesia, including the Salim, Gelael and Sosro groups. The U.S. multinational Yum Brands, which owned the brand, agreed to give the license to Alwin only after it increased the fee to $42 million from $30 million. “I had to fly back and forth to Hong Kong to negotiate the deal, attending meetings that could last until morning before the deal was finally closed,” Alwin recalls.

    To pay for this, Alwin had partnered with financial firm Recapital Advisors to secure the funds. After the deal, Sriboga held a minority share, while Recapital held the majority, which Sriboga later bought from Recapital in 2007. Alwin also decided to revamp the business model. Under the previous license holder, he had tried to appeal to a mass market with low quality products sold at low prices.

    Alwin decided to go upscale, building bigger restaurants that were family friendly but had higher prices. To adapt to Indonesian tastes, Alwin made its pizza thicker so that it is more filling. “We try to make good food from quality ingredients but still in an affordable price range, so it's like a five star hotel with a three star price,” Alwin says.

    The concept proved to be successful. Last year, Pizza Hut Indonesia posted almost Rp 2 trillion of revenue, an increase of 150% from Rp 800 billion in revenue in 2007. It also started Pizza Hut Delivery (PHD) in 2007 to deliver pizzas to homes and offices. PHD now has around 70 outlets. Alwin plans to add at least 15 Pizza Hut restaurants and up to 25 PHD outlets annually over the next five years.