Pioneerindo Gourmet International
    Category: Best of the Best By : Yessar Rosendar Read : 2497 Date : Monday, July 08, 2013 - 01:22:04

    Ahmad Zamroni / Forbes Indonesia

    Indonesians love fast food—and the emerging middle class have the buying power to fuel the growth of fast food chains. While existing global brands such as Kentucky Fried Chicken and McDonald's are expanding, so too are the homegrown ones, especially PT Pioneerindo Gourmet International with its California Fried Chicken (CFC) chain. The outlets serve standard fast food-style fried chicken and related items, such as french fries. They are decked out in bright red and yellow décor, with an old-fashioned covered wagon as its icon.

    The company often avoids direct competition with its bigger rivals. “We create new markets for our growth,” says Pioneerindo President Director Kuswandi Tamin. Kuswandi looks for niche locations not yet touched by the bigger chains, such as hospital food courts, smaller cities and rest areas on toll roads. It will, however, open near rival outlets if they appear crowded, to get spillover traffic from customers avoiding lines and crowds. 

    With this strategy revenues have grown 71% from Rp 207 billion in 2008 to Rp 354 billion in 2012. Net profit has also grown almost ten times from Rp 4.2 billion in 2008 to Rp 34.3 billion in 2012. CFC contributes 93% of total revenue, while the rest comes from two smaller chains, Chinese food seller Sapo Oriental and doughnut maker Cal Donat. As of last year the company had a total 244 CFC outlets, of which only 40 are franchised. To buy a franchise costs a total of Rp 675 million, made up of Rp 125 million for the franchise fee and set-up costs are the rest.

    This year Kuswandi aims to invest another Rp 60 billion to open 60 new stores and hire at least 900 new staff, while on the financial side the goals are to increase revenue by 30% and net profit by 15%. “We hope that people's buying power will increase so that sales will rise, and we will also launch new products and open larger-sized stores,” Kuswandi says.  This year is a challenging year for Kuswandi, as some operational costs have significantly risen, such as the higher minimum wage and electricity charges. To offset these higher costs, the company has increased its prices. One advantage for Kuswandi is that, as owners of its own brand, that he has more flexibility than his international competitors, who often follow strict global guidelines as a franchisee.

    Investors like what they see. Listed in 1994, Pioneerindo has a market capitalization of Rp 789 billion, and its stock has almost doubled in the past year, from Rp 1,800 to Rp 3,575 a share, and up 1000% since January 2011. For its high quality growth, the company has been awarded as one of the Best of Best companies for two years in a row.