Jakarta, Nov. 15 - Food producer PT Indofood Sukses Makmur (INDF.JK) plans to hike prices of its noodle products later in 2007, a senior official at the company told Dow Jones Newswires Thursday.
"We will certainly increase the prices of our (noodle) products," said Indofood's Vice-President Director Franky Welirang.
Welirang declined to comment on the size of the increase.
Analysts in Jakarta said the increase is needed in order to keep the company's margins healthy.
"I think Indofood needs to hike the prices of its products to cope with inflationary pressures and high wheat prices," said Norico Gaman, an analyst with BNI Securities.
Mandiri Sekuritas in a research note Thursday said that Indofood may increase its consumer buying price by an average of IDR100 per pack for three of its major brands that are Indomie, Sarimi and Supermie, which collectively comprise around 75% of Indofood's total instant noodle volume.
"The increase on the ex-factory price level is estimated to be around 10%," Mandiri said.
Indofood is expected to produce ten billion packs of noodles in 2007, with current selling prices at between IDR900 and IDR1,300 per pack, said analysts.
In the first nine months of this year, Indofood's sales rose 23% to IDR19.67 trillion from IDR16.04 trillion a year earlier.