UD
Golden Prima food is one of two Charoen
Pokphand Indonesia company’s distributor in Yogyakarta. It is located on Ikip
PGRI road, Yogyakarta. This company is owned by Anton Iswanto Kusuma.
UD
Golden Prima Food’s head company, Charoen Pokphand Indonesia, is the company
who produces frozen foods with the brands of Golden Fiesta, Fiesta, Champ, and
Okey. Here the products of Charoen Pokphand Indonesia:
UD Golden Prima has a responsibility to
distribute all these frozen food products from Charoen Pokphand Indonesia to the
third parties in Yogyakarta only. The third parties are divided into two, they are
distributor and retail. Distributor here
means a distributor who buying products from UD Golden Prima Food, not an
official distributor that belongs to Charoen Pokphand Indonesia. Usually the
distributor also buying products from another brand (So Good, etc). Retail means
retailers like Alfamart, Indomart, Superindo, not Carefour, Hypermart, and Lotte
mart.
The Business and The Fluctuation of Rupiah
UD Golden Prima Food’s job, in
normal condition, looks like quite simple. It just has to take the frozen food
products from the head company which located in Semarang by account payable and
then sells the products to the third parties in Yogyakarta with higher price to
get profits and after the third parties pay, UD Golden Prima Food has to pay
the head company. UD Golden Prima doesn’t have to think about competitor
because the head company has made a policy in which a distributor is prohibited
to steal the third parties’ from another Charoen Pokphand distributor.
In
other hand, if it can not be able to reacch the target sales, the head company
will warn UD Golden Prima Food and may be kick UD Golden Prima Food from
distributor. The fact, UD Golden Prima Food’s job is not that simple. The head company of UD Golden
Prima Food already set a target sales for UD Golden Prima Food. If UD Golden
Prima Food able to reach the target, of course there will be reward for it.
UD
Golden Prima Food gets affected by the fluctuation of the Rupiah. Actually the
source of effect comes from the head company which is Charoen Pokphand
Indonesia company. The cost of production of frozen food products are increase
because some raw materials’ price increase, then it affects to the selling
price of the product itself. Then, UD Golden Prima Food’s debt will increase
because it has to pay more for the same amount of items of the products from
the head company and has to sell the products in higher price to the third
parties. Based on the data through interview with the owner, UD Golden Prima
Food has just increased the selling price of the products about 2%(two
percents) until 5%(five percents) depend on the products.
The Risk Management of Fluctuation
Facing
the fluctuation of Rupiah in Indonesia, UD Golden Prima Food has already
prepare two steps. UD Golden Prima Food accepts the offer from Charoen Pokphand
Indonesia to owe more money and the maturity date extension. Then, UD Golden
Prima Food offer a maturity date extension to the third parties if the third
parties agree to buy the same number of item as usual.
UD Golden Prima Food accepts to
owe more money from Charoen Pokphand Indonesia because UD Golden Prima Food
needs to keep the number of items reach or above the target to sell. Just like
the third parties, UD Golden Prima Food has to pay more for the same number of
item, so if Charoen Pokphand Indonesia doesn’t lent some money, UD Golden Prima
Food’s velocity of money will be
disturbed. More money will help UD Golden Prima Food ready to sell the products
as or above the target sales because UD Golden Prima Food has enough items in
inventory.
The extension of maturity
date helps UD Golden Prima Food to keep
its business working well. With the extension, UD Golden Prima Food also gives
a maturity date extension to the third parties. However UD Golden Prima Food
has to persuade the third parties to keep buying in the same number of items,
and the maturity date extension as the lure. This is why a good relationship is
very needed between UD Golden Prima Food and the third parties. The owner of UD
Golden Prima Food usually talk directly to several important third parties in
personal so they can clarify about the problem and talk about their needs.
The
result of decreasing 7% in number of sales means the owner has succed enough in
persuade the third parties. The result may be worse if the owner doesn’t
persuade the third parties in a good approach. UD Golden Prima Food may lose
number of sales but the owner told that it is still accepted and still reach
the target, but of course the number of
items in inventory will be increase temporary. UD Golden Prima Food just
has to manage the number of items for the next order. Still, there is a
probability the number of orders will decrease or increase.
Another
steps that UD Golden Prima Food takes to manage the number of items left in
inventory is by selling directly the frozen foods(products) to consumer and
sells to a new third parties. UD Golden Prima Food accepts personal order from
consumers, and of course the price is cheaper than the price in the third
parties. UD Golden Prima Food permitted to looking for a new third parties as
long as not belong to another distributor of head company. Small retail stores
is the best way to decrease the number of items in inventories in emergency
situation like this, because even they don’t buy much but still better to sell
rather than to keep.
Opinion
UD
Golden Prima Food is good enough in managing the risks. It turns the positive
risk, optimize it and create a chance for itself to decrease the level of
negative risk. Risk may can not be eliminated from business but it is still
possible to be reduced.
Just
like UD Golden Prima Food, it optimizes the help that Charoen Pokphand
Indoensia offers, then it creates its own method to help its own business by
creating a good relationship with the third parties. The number of sales of UD
Golden Prima Food is a prove that UD Golden Prima Food is not fail in managing
the risk.
However the price of Charoen
Pokphand Indonesia’s products will not come back to the old price. UD Golden
Prima Food has an extra job in the future. UD Golden Prima Food has to keep
communicate with the third parties to prevent missunderstanding in price. UD
Golden Prima food must convince the third
parties that step by step the market will adapt the new price and also maybe UD Golden Prima Food can offer
an help if they need.
