Sido Muncul and "The Power of Jamu"
JAKARTA – Jamu (Indonesian herbal medicine) may be considered too simple, too traditional, or too “old school” to be profitable by some people. However, it turns out that jamu can be become the core of a profitable business, like Sido Muncul.
The book “The Power of Jamu, The Wealth And Local Wisdom of Indonesia” (Martha Tilaar, Bernard T. Widjaja. 2014) gives a clear picture about the potential of jamu business. In the book, it was mentioned that according to the results of a research conducted by the Research and Development Division of the Ministry of Agriculture in 2007, by 2050, the market for jamu may grow by 15% per year, far higher than the growth of conventional medicine market, which may only grow by 3% per year at the same time.
Not only that Sido Muncul understands about the potential of jamu, the company develop its business perfectly, and it can even penetrate the export market. However, the process of Sido Muncul’s business is not instantaneous; it had to went through a long, hard process.
A Dream from Mlaten Trenggulun
The story of Sido Muncul began with Siem Thiam Hie and Rakhmat Sulistio, a married couple who lived in Ambarawa. At first, they started a dairy farm named “Melkrey”. However, due to economic crisis, the couple moved to Solo and started another business, a bakery named “Roti Muncul”.
Five years later, Mrs. Rakhmat, who had a good knowledge of jamu, decided to started a jamu business in Yogyakarta. In 1941, the company’s first “Jamu Tolak Angin” formula was founded with a name “Jamu Tujuh Angin”. In 1949, due to the Second Dutch Military Aggression, the couple moved to Jl. Mlaten Trenggulun 104, Semarang. In this place, in 1951, the couple started their jamu business under the name “Sido Muncul”, meaning, “dreams that come true”
Today, Sido Muncul products can be found almost everywhere, even outside Indonesia. Although, as stated by President Director of PT Industri Jamu and Farmasi Sido Muncul Tbk (SIDO), David Hidayat, at first, the company’s products were not exported directly by the company.
“At first, our products were carried by merchants, or imported, to be sold in certain countries. The company does not provide support for marketing activities for the export market. "However, seeing its huge potential, we decided to start seriously exploring export market," he told idnfinancials.com.
Today, Sido Muncul products are available in more than 15 countries, and the company will continue to open new markets in other countries, since the company believes that its products can be accepted in the global market.
The company’s most popular products outside Indonesia are Tolak Angin and Kuku Bima Energi. However, the company has exported other products, such as candy, ginger milk and coffee, STMJ, and herbal supplements.
Since 2019, the company began making efforts to expand its market to various countries, Nigeria being the farthest one. Nigeria is considered since it is a big country with a population of more than 200 million. Also, Kuku Bima Energi, one of the company’s jamu products, is quite well-known there, since it has been imported by a merchant from Nigeria. Due to its huge potential, the company decided that it would penetrate the Nigerian market. With good marketing activities, it is possible that the country will become one of the biggest contributors to Sido Muncul’s revenue.
Today, all of the company’s products are made in Indonesia. However, if the market is profitable enough with good sales figures, the company will also consider to build a factory outside Indonesia.
Continue to improve
So far, export market only contributes 5% of the company’s revenue. The company will continue to make efforts to increase the contribution from export, but it will take time.
In Indonesia, the company has distributed more than 200 products. The company has products in three segments; Jamu (which contributes 67% of the company’s revenue), F&B (29%), and Pharmaceutical (4%)
Of course, Sido Muncul is not the only player in the jamu market in Indonesia. The company considered as Sido Muncul’s biggest competitor is PT Air Mancur. Until three years ago, there was also Njonja Meneer, which was established in 1919. However, due to internal conflict, the company gone bankrupt.
For Sido Muncul, being one of the most prominent players in jamu market does not make it satisfied. The company will continue to improve itself, particularly in modernizing its production technology and management. In 1984, the company began its efforts to modernize its factory by moving from a traditional factory to a bigger factory with modern equipment. Then, in 11 November 2000, the company inaugurated its bigger, more modern factory in Ungaran. The factory was built on a 7 hectare land. Then, on 10 February 2010, the company started the construction of its 3,000m2 herbal raw material factory.
In December 2013, the company decided to go public and listed its shares on the Indonesia Stock Exchange (IDX). Regulations and cultures that have to be followed by a public company will continue to push the company to modernise its management to make it more professional and transparent, to make it more competitive in the jamu market. (ARM/KR/AR)