In managing its business operations, the Company faces several risks which are broadly categorized into Operational Risks and Financial Risks. To minimize the potential emergence of risks that could affect performance, the Company conducts various studies and establishes policies to manage existing potential risks.
Risks that potentially affect the Company’s business include:
As a company engaged in the food industry, the Company faces potential risks of product contamination that may occur while still in raw material form, during the production process, or during the distribution process to outlets and end consumers. As a preventive measure against such risks, the Company implements GMP (Good Manufacturing Practice), SSOP (Sanitation Standard Operating Procedure), ISO 9001:2015 Standards (Quality Management System), as well as ISO/TS 22002-1:2009 and ISO 22000:2005 (Food Safety Management System).
The products produced by the Company have a relatively short shelf life. To anticipate this risk, the Company periodically conducts evaluations and improvements to enhance product quality.
The Company complies with regulations set by BPOM (National Agency of Drug and Food Control) and halal requirements set by MUI (Indonesian Ulema Council). The Company continuously educates the public through Factory Visit programs.
The availability of raw materials significantly impacts the Company’s production. To anticipate risks regarding the availability of these materials, the Company performs sound production planning and inventory control while continuing to seek substitute raw materials and alternative suppliers.
In facing business competition, the Company continuously innovates its products and increases Customer satisfaction by producing quality products at affordable prices.
The availability of energy supply is one of the main factors supporting the Company’s operations; therefore, the Company faces a risk of energy supply shortages. To anticipate the risk of energy shortages, the Company prepares other alternative energy sources.
Labor is a valuable asset for the Company; thus, the Company consistently pays attention to its workforce and maintains good relationships between Management and Employees. To address potential labor strikes, the Company cooperates with the Department of Manpower and security forces, while ensuring product availability.
Natural disasters such as earthquakes, volcanic eruptions, floods, or other disasters are unavoidable. The Company insures its assets and the continuity of its operations.
The Company faces foreign exchange rate risks because the prices of some of its primary purchases are influenced by price movements of benchmarks in foreign currencies. Therefore, the Company maintains transactions and balances in foreign currencies at a minimum level to limit foreign currency risk.
The impact of commodity price risk faced by the Company is primarily related to the purchase of raw materials, which are influenced by fluctuations in commodity prices as well as supply and demand levels in the market. To minimize this risk, the Company implements purchase planning and inventory control.
The credit risk faced by the Company stems from credit extended to customers. To mitigate this risk, the Company implements policies to ensure that product sales are only made to trustworthy customers with a proven good credit history.
The Company manages its liquidity profile to be able to fund its capital expenditures and pay maturing debts by maintaining adequate cash and financing availability. The Company regularly evaluates projected and actual cash flows and continuously monitors financial market conditions.