The country’s leading underwear maker, PT Ricky Putra Globalindo, is confident that demand for fresh, clean skivvies will not wear thin even amid a global economic crisis.
“Our underwear sales are growing this year as they did last year, and we expect to keep our commanding market share in the industry,” Ricky Gunawan, the president director of the company, said on Monday.
Because underwear is a basic need, he said demand for the product would never slow down, even in a crisis.
The company, Ricky said, held 38 percent of the domestic underwear market, while its closest competitor only had about 8 percent.
“It’s always the same story in many countries. There’s often a ‘king’ among underwear firms, which dominates the market,” he said.
Underwear sales grew 14 percent to Rp 49.79 billion ($4.83 million) in the first quarter of this year, contributing 37 percent to total revenue.
But the company has taken a hit from fluctuating cotton prices. Ricky Putra’s yarn products division, the company’s biggest revenue contributor, led to significant losses last year.
“The price of cotton fluctuates, as it peaked at 85 cents and then fell to 50 cents in just three months, causing many spinning factories to halt production,” Ricky said.
In 2008, Ricky Putra’s revenue rose by 15 percent to Rp 491 billion but it ended with a net losses of Rp 9 billion, down from the Rp 41 billion net profit it booked in 2007.
This year, the company is confident that it will book profits again after seeing improving second-quarter results. “Demand is back in the second quarter, while the price of yarn is also improving [in the second quarter], while many spinning factories restarted production in February this year,” Ricky said.
The company said that the closure of textile factories in China had been a boon for the Indonesian textile industry, as the company had benefited from line factory agreement orders from Japan. “Still, we would prefer to concentrate on the domestic market, as exports offer lower profit margins while the risk is too high,” Ricky said.
Source : http://www.thejakartaglobe.com/business/underwear-sales-not-wearing-thin-amid-crisis-ricky-putra-says/313746
