Corrected: Japan’s Hokkan joins Indonesia’s Deltapack in beverage packaging

01, Nov. 2018

JAKARTA, NNA – Japanese bottling and packaging firm Hokkan Holdings Ltd. will acquire the beverage packaging units of PT. Deltapack Industri group in Indonesia for 1.26 trillion rupiah ($83 million), cashing in on growing local demand sparked by concerns about pollution from single-use plastic.

Hokkan said Tuesday it will establish PT. Hokkan Deltapack in December, which will take over the operations and assets of seven units of the Indonesian group by April next year. Hokkan will hold 80 percent of the joint venture and Deltapack the remaining 20 percent.

Indonesia’s major food and beverage packager has seen 10 percent year-on-year growth in sales in the past three years, according to a Hokkan spokesman. The firm supplies household names including Coca-Cola, Garuda Food and Suntory.

The local group runs eight factories in Java and the Sumatra islands.

The Japanese firm expects the joint venture to post 1.1 trillion rupiah in sales in the business year to March 2020.

Hokkan Holdings’ local subsidiary, PT. Hokkan Indonesia, established in Bogor on Java Island with trading house Toyota Tsusho Corp. and began operation in December 2012. Its annual production capacity is 240 million bottles.

Indonesian household spending on food and beverages has grown 5 percent to 6 percent annually from 2015 to 2017 in line with the country’s economic growth, according to Deloitte’s 2017 consumer survey.

Meanwhile, plastic garbage flowing into the oceans has raised global concern.

Indonesia is the most populous nation in Southeast Asia. With a large number of islands and much of the population living along its coasts, it is the world’s second largest source of marine plastic garbage after China.

The country has pledged to reduce plastic garbage by 70 percent toward 2025 compared to the 2017 level, says Japan’s MS&AD InterRisk Research & Consulting Inc. in its January 2018 report.

But the report notes concern that Indonesia has not stated clearly which level of government will regulate the problem.