Martina digs deeper into herbal cosmetics

Javanese SPA and Massage | Javanese Herbal –Publicly listed Martina Berto, part of natural cosmetics giant Martha Tilaar, is hoping to take advantage of the “back-to-nature” trend by expanding its herbal cosmetics business. It is set to double its herbal production with a new factory that is scheduled to start commercial operations next month, after two years of construction. Its commercial operations will give an additional production capacity of 3,200 tons of herbal cosmetics, spa products and traditional medicines per year, and will round out its total herbal production capacity to 6,400 tons per annum.

“The contribution of herbal products to our revenue is actually very small, at only around 1 percent,” Martina Berto president director Bryan Tilaar said Tuesday. “With the new plant, we expect the contribution to rise to around 5 percent.”

The Rp 75 billion (US$6.35 million) plant is located on 9.5 hectares of land in the Cikarang Industrial Park in Bekasi, West Java, near the company’s herbal medicine plantation, Kampoeng Djamoe Organik.

The company is attempting to advance its herbal business to cater to the current consumer trend of shifting to exotic, herbal products, according to Martina Berto marketing director Samuel Pranata.

“We don’t have precise data on how big the country’s herbal market is growing, but available market research shows that there is a tendency for customers to turn to modernized herbal products,” he said.

The firm has set a conservative sales target of Rp 700 billion this year — about 9 percent up compared to last year — and aims to cushion impacts from the country’s dwindling macroeconomic condition and the currency volatility that have put pressure on cosmetic firms’ financial performance since last year.

Martina Berto — which imports about 70 percent of its raw materials — saw sales plunge by about 10.7 percent year-on-year (y-o-y) to Rp 641.3 billion and recorded a 64.5 percent dive in profits to Rp 16.2 billion last year.

The poor performance continued in the first quarter of this year, with a 15.8 percent y-o-y slump in sales to Rp 140.45 billion and a 64.7 percent y-o-y plunge in net profits to Rp 2.5 billion.

Samuel said the company was exploring current trends and cutting costs, as well as boosting exports to generate more revenue from overseas markets, in order to secure its sales target.

The company, which has two representative offices in Malaysia and Singapore, exported Rp 9.36 billion worth of goods last year, while eyeing a 30 percent increase this year.

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