In the midst of market conditions that were still affected by the pandemic, the
Company’s performance successfully exceeded the targets with sales grew by
21% and net income grew by 35%.
Dear Honored Shareholders,
We would like to praise God Almighty, because of His mercy
and grace, PT Industri Jamu Dan Farmasi Sido Muncul
Tbk. (“the Company”) could go through the year 2021 with
remarkable achievements. With the support of the hard
work of all employees of the Company and subsidiaries, the
Company was able to record performance that exceeded
the targets and to strengthen its position as a market leader
in the national herbal and pharmaceutical industry.
On behalf of Board of Directors, please allow me to report
a summary of the Company’s performance for the financial
year ended 31 December 2021.
Continuing the trend of recovery since the third quarter of
2020, entering 2021, the economic growth continued to
increase and reach 7.07% (yoy) in the second quarter of
2021. Indonesian economy managed to return to the positive
zone, after the last few quarters being in the negative zone
due to recessionary pressures. This achievement was also
the highest growth in the last 17 years. Public consumption
started to rise, driven by massive vaccination program
and the easing of social restrictions. Public activities
were gradually returning to normal despite a number of
restrictions and the implementation of health protocols.
Nevertheless, in July-August 2021, Indonesia was hit by
the second wave of Covid-19, the Delta variant. The surge
in Covid-19 cases was unstoppable after the Eid holiday.
The government implemented a strict implementation of
emergency public activity restriction (PPKM) to prevent
the spread of the Covid-19 virus. Emergency PPKM policy
was unavoidable so that hospitals were not paralyzed
due to excess capacity. After the emergency PPKM was
implemented, the number of cases and the percentage of
hospital bed occupancy ratio (BOR) was shown to have
The second wave of Covid-19 and PPKM had an impact
on economic growth in the third quarter which slowed
to 3.51% although it was still in the positive zone. The
government’s priority was to prioritize public safety and
health. After the number of infected cases continued to
decline, the government began to ease gradually. Some of the activities allowed to open with strict health protocols
were traditional markets selling basic necessities, street
vendors, grocery stores and other micro, small and medium
Consumption indicators started to show improvement.
Public spending showed an acceleration towards its level
in the pre-pandemic period. The success of controlling the
pandemic after the spread of Delta variant convinced the
public to return to their activities and the business world
began to expand. The Central Statistics Agency (BPS)
announced that economic growth in the fourth quarter
rose again by 5.02% (yoy). Thus, cumulatively, domestic
economic growth in 2021 would be 3.69% (yoy). The
dynamics of economic growth implied that health recovery
is a key factor in economic recovery.
Almost 2 years living with the Covid-19 pandemic, public
interest in consuming herbs and herbal medicines is
getting higher. People are increasingly aware of living a
healthy lifestyle, including by consuming medicines and
supplements that can increase immunity, especially herbal
products. The main reason for choosing herbal products is
because they use natural raw materials that have no side
Sales of herbal and pharmaceutical products for immunity
increase significantly during the pandemic. People believe
that herbal medicine can increase the body’s immune system
against viruses in the midst of a surge in Covid-19 cases.
The products that are most sought after by the public are
products made from spices, such as: ginger, lemongrass,
turmeric, temulawak and other natural ingredients.
Based on BPS data, the chemical, pharmaceutical and
traditional medicine industries sectors continued to
experience high growth driven by the traditional medicine subsector. From the first quarter to the third quarter of 2021, the
chemical, pharmaceutical and traditional medicine industries
grew by 11.46%, 9.15% and 9.71% (yoy), respectively. There
was a slowdown in the second quarter as a result of the
spike in Covid-19 cases and the implementation of PPKM.
However, the sales rebounded in the third quarter.
The high demand for immune supplements encouraged the
growth of herbal and pharmacetutical industry. Not only big
producers seize the opportunities, but also herbal MSME. A
number of new products claiming efficacy to boost immune
system have emerged. Many herbal and pharmaceutical
manufacturers apply for permits to distribute their new
products to Badan POM.
The increased public awareness to maintain health and to
live a healthy lifestyle during the pandemic has brought
positive catalysts for the Company to increase the availability
of herbal products, food supplements and vitamins.
The Company was agile in executing strategies to overcome
challenges and to optimize opportunities. The Company set
a sales growth target of above 15% and net income growth
of above 25% through 4 strategic focuses, including:
Optimizing domestic distribution and product diversification.
Focusing on export recovery and expansion.
Strengthening digital presence on online platforms and marketplaces.
Maintaining margins and improving business processes.
The main focus of the Company was to maximize
the potential of the domestic market through product
diversification. As a result, new products launched in 2020
and 2021 were able to contribute approximately 4% of total
consolidated sales. This indicated good market acceptance
of the Company’s new products.
In addition, the Company continued to improve the quality
of the distribution system to make it easier for consumers to
get Sido Muncul products at modern trade, online sales and
general trade. In 2021, the Company increased the number
of wholesalers and retailers to reach 135 thousand spread
throughout Indonesia. The Company’s target is to penetrate
deeper into the second and third tier cities and to increase
product availability and visibility in each store.
Role of Board of Directors in Formulating Strategies and Strategic Policies
Board of Directors together with the management team
formulate business targets, budgets, strategies and strategic
policies in the form of a work plan and budget (RKA) based
on an overview of external and internal conditions. External
conditions include projections of economic growth,
macroeconomic indicators, social conditions, projected
prices of main raw materials as well as market conditions
and business competition. Meanwhile, internal conditions
include the readiness of human resources, production
capacity and historical sales data. Furthermore, Board of
Directors presents the RKA to Board of Commissioners
in a joint meeting of Board of Directors and Board of
Commissioners. Board of Commissioners provides their
views and recommendations as well as their approval.
In order to meet the business targets that have been set,
the management team determines the work plans of each
division as cascaded strategic goals.
Process Performed by Board of Directors to Ensure Strategy Implementation
In 2021, Board of Directors held 12 monthly meetings, all
of which were attended by Board of Commissioners. At the
Board of Directors meeting, each Director and/or related
division presented a report on the results of the followup to the decisions of the previous meeting, performance
achievements, problems faced and market developments,
including competitors. The meeting resulted in strategic
decisions to address gaps in the achievement of monthly
In the midst of market conditions that were still affected by
the pandemic, the Company was able to record doubledigit net sales growth of 20.6% from Rp3.34 trillion in 2020
to Rp4.02 trillion.
This growth was driven by strong demand from Herbal &
Supplements segment which grew by 21.3% from Rp2.22
trillion in 2020 to Rp2.69 trillion and Food & Beverages
segment which grew by 18.3% from Rp1.01 trillion in 2020
to Rp1.19 trillion. Meanwhile, Pharmacy segment also
recorded a significant growth in percentage, which was
26.5% from Rp108.43 billion in 2020 to Rp137.15 billion.
Cost of goods sold increased by 15.9% from Rp1.50 trillion
in 2020 to Rp1.73 trillion in line with the sales growth. The
success of the Company in implementing efficiency in all
lines was reflected in the percentage growth in cost of
goods sold which was smaller than the percentage growth
Efficiency efforts resulted in a 24.3% increase in gross profit
from Rp1.84 trillion to Rp2.29 trillion with a gross profit
margin that increased from 55.1% to 56.9%. The Company
managed to record a net income of Rp1.26 trillion, grew
by 35.0% from 934.02 billion in the previous year with net
income margin increasing from 28.0% to 31.4%.
The Company’s ability to adapt quickly in the face of dynamic
conditions has succeeded in maintaining consistent growth
in the domestic market. Tolak Angin products led the growth
of Herbal & Supplements segment of 21.3%. Meanwhile, Food & Beverages segment grew by 18.3% compared to
Vitamin C powder drink, Sido Muncul C-1000, recorded a
growth of more than 150% compared to the previous year.
In modern trade, Sido Muncul’s C-1000 product ranked the
fifth in the category of vitamins or supplement products for
adults. The Company sought to increase market share in
this category by launching Sido Muncul Vitamin C 1000mg
+ Zinc RTD (ready-to-drink) variant with the most complete
formulation compared to competing products.
The demand for ginger-based health drinks also increases
during the pandemic and becomes the number one product
for the traditional or warm drink category in modern trade.
In total, the health drink category contributed 50% of sales
in Food & Beverages segment in 2021.
The Company focused on the momentum of recovering
export sales performance in Nigeria, Malaysia and the
Philippines. International business performance contributed
4% of total consolidated sales. PT Semarang Herbal Indo
Plant, subsidiaries of the Company exported 61 tons
of patchouli essential oil to France, followed by ginger
essential oil exports to several Southeast Asian countries.
The COVID-19 pandemic has changed people’s
consumption patterns, including the way they shop. Onlinebased services are increasingly in demand supported by
advances in digital technology. Apart from being much
more practical, shopping online through an e-commerce
platform is safer because consumers don’t have to travel
and have physical contact with many people and make
The Company utilizes online platforms to get closer to
consumers and to expand the unlimited new markets
coverage. In addition to building our own online store
(www.sidomunculstore.com), the Company also entered
into available e-commerce applications. To date, the
Company has collaborated with more than 25 e-commerce
marketplaces, including: Tokopedia, Shopee, Lazada,
Bukalapak, Blibli, JD.id, Good Doctor and Zalora.
In 2021, the Company launched 11 new product
variants. The strategy of diversification with new product
development resulted in excellent sales growth and built
strong fundamentals for the future. Sales of new products
grew by more than 175% (yoy) supported by strong sales performance from Sido Muncul C-1000 sweet orange
variant and new supplement products (soft gel, JSH,
Sambilito and others). By the end of the year, new products
contributed 4% of total consolidated sales.
The Company continued to innovate to improve efficiency
in the production and support processes. Since 2020,
the Company has gradually replaced electric chillers
in production units with absorber systems that are
more efficient because they can utilize heat from boiler
combustion. In 2021, the chiller absorber was also used in
the production unit of Effervescent Powder, Tolak Angin 1,
Instant Powder and pharmaceutical preparations. In total,
by replacing the chiller machine, the Company achieved an
efficiency of electricity consumption of 12%.
To increase efficiency in beverage production, the Company
installed and prepared to move production facilities for 150
ml products (Vitamin C 1000mg + Zinc, Herbal Heritage,
Tejamu and so on) and 300 ml products (RTD KBE and
RTD Sporty) from RTD 1 to RTD 2. When fully operational,
the production capacity for 150 ml beverage products will
increase from 1.5 million bottles to 5 million bottles with
the potential to reduce production costs due to using more
At end of the year, the Company has completed the
installation of PLTS Roof with a capacity of 2,000 kWp
which was installed in all factory buildings. Its operation
still has to wait for the issuance of an operating permit
from PLN. The use of Rooftop solar panel will reduce the
Company’s electricity consumption costs in the future.
More importantly, by using electricity from renewable
energy sources, the Company contributes to the reduction
of carbon emissions and strengthens its commitment as a
company that cares about the environment.
At the beginning of 2021, the Company set a sales and
net income growth targets of above 10% e. Furthermore,
based on the realization of the extraordinary mid-year
performance, the Company revised its sales growth target
to 15% and net income to 25%. At the end of 2021, the
Company’s performance successfully exceeded the targets
with sales grew by 21% and net income grew by 35%.
In Annual GMS on March 31, 2021, shareholders agreed
to distribute cash dividends to shareholders from 2020 net
income of Rp934 billion or Rp31.4 per share with a payout
ratio of 100%. All dividends were paid to shareholders
through distribution of interim dividends in November 2020
and final dividends in April 2021.
In 2021, the Company distributed bonus shares derived
from treasury shares to shareholders with a ratio of 131:1
or every 131 shares ownership shall get 1 bonus share.
The total bonus shares distributed were 227 million shares.
The decision to distribute bonus shares is in line with the
Company’s commitment to redistribute the proceeds from
the share buyback.
Potential market opportunities for herbal and
pharmaceuticals, especially for products that can boost
immunity, make business competition even tighter. The
Company is not only facing competitors from fellow
herbal medicine companies, but also non-herbal medicine
companies, including pharmaceutical companies that have
started to produce traditional medicines. To deal with this,
the Company continues to carry out continuous research
and development to produce innovative products that are
not only herbal-based, but also pharmaceutical-based.
We believe that consumer needs continue to evolve from
generation to generation. Currently, the potential consumers
are millennials and Generation Z who have better education
level and are well paid. Generally, they have busy schedule
and high mobility so that their diet does not pay attention
to the intake of nutrients that contain natural vitamins and
minerals. Supplement products will be their mainstay to
meet their daily nutritional needs.
The Company has prepared future products aimed at
maintaining health and increasing immune system. By
using modern technology machines, the Company is able
to develop soft capsule products for people who want to
enjoy the benefits of drinking herbal medicine in a different
Indonesia is more optimistic in welcoming 2022. The
Covid-19 pandemic as the root of multidimensional crisis is
indicated to be more controlled. Vaccination that continues to
increase in scope has proven to be the best effort combined
with the implementation of strict health protocols. The
national economy has also started to improve. Economic
indicators appear to be running positively. The government
projects economic growth of 5.2% - 5.5% in 2022.
Given the achievements in 2021, the Company believes that
there are good business prospects in 2022 and the years to
come. The Company will continue to innovate to produce
new products that meet consumer needs. The Company
targets growth of above 15% in both sales and net income
in 2022, with various strategies and initiatives that have
been planned and will be executed immediately.
Based on research data, the herbal medicine industry
market will still grow at a CAGR of 10% - 12% in the next
5 years. Vitamin and supplement industry will also continue
to grow at a CAGR of 10% - 11% in the next 5 years. This
makes the herbal, vitamin and supplement industry a big
category in consumer health segment.
The Company began to take the essential oil business more
seriously. The opportunity for essential oil exports is quite
large, considering that exports from Indonesia for essential
oils are estimated to reach Rp2.5 trillion to Rp3 trillion
per year. The Company has long experience in producing
essential oils because one of the initial stages in making
liquid herbal medicine is the extraction process of raw
materials to get the essences. The same extraction process
is also carried out to produce essential oils.
Extensive experience, supported by production facilities
with modern technology and large capacity at a subsidiary,
PT Semarang Herbal Indoplant, makes the Company
optimistic that it can expand into the essential oil business
and become one of the big players in this industry in the
next few years.
Good corporate governance (GCG) in the Company is
essentially the application of the noble values inherited by the
founders. These values have become the basic philosophy
of Sido Muncul in running a business that upholds integrity, responsibility and compliance with the laws and regulations
and prioritizes the interests of stakeholders, the community
and the surrounding environment.
The Company always encourages Sido Muncul personnel
to implement and elaborate the corporate values (SIDO
Values) with the highest standards in every business
process. To improve ethical standards and integrity, the
Company routinely conducts socialization to all Sido
Muncul personnel and related stakeholders regarding the
corporate policies in order to create a healthy, transparent,
productive, harmonious, respectful and mutually beneficial
In 2021, the Company reviewed and updated Corporate
Governance Guidelines which consist of Code of Conduct,
BOD and BOC Manuals, Anti-Bribery and Anti-Corruption
Policies and Whistleblowing System Mechanism. The
guidelines act as a set of rules and policies that include a
supervisory and control system to support work ethics and
responsible decision making, business integrity and ethical
relationship between stakeholders and the Company.
The Company is committed to always complying with
statutory provisions and supporting the Government of
Indonesia in eradicating corruption. Therefore, the Company
established Anti-Bribery and Anti-Corruption Policy that
applies to all Sido Muncul personnel without exception.
Board of Commissioners, Board of Directors and all
employees are required to ensure that the Company’s
activities and business, including those involving business
partners, government institutions and other stakeholders,
are protected from acts of corruption as defined in the
Corruption Eradication Act (UU Tipikor), which are related
to activities of 1) harming state finances, 2) bribery, 3)
embezzlement, 4) extortion, 5) fraud, 6) conflict of interest
and 7) gratification.
There were no changes in composition of Board of Directors in 2021.
The year 2021 was the 70th year Sido Muncul thriving in the
herbal and pharmacetutical industry. It is an honor for us to
be able to take part in bringing this company to its platinum
age with a number of remarkable achievements.
On behalf of Board of Directors, first of all, I would like to
express my greetings and sincere appreciation to our loyal
customers who have given us the opportunity to fulfill their
needs in maintaining health and fitness. Consumers are
our main force that motivates us to continue to grow. In
line with the philosophy that we have implemented since
70 years ago, we always maintain good relationships with
consumers. Listening and understanding consumer input
is very important. Every criticism is an inspiration for us to
improve the quality of our products.
Secondly, I would also like to express our gratitude to the
shareholders for their trust in Sido Muncul. Your support is
a strong foundation for the Company to continue to grow
and provide values to shareholders. It is important for us to
fulfill our commitments to our shareholders and to conduct
business with integrity in order to maintain your trust.
Thirdly, I would like to thank Board of Commissioners,
for their support, guidance and advice so far so that the
management of the Company is always in the right direction
to achieve its vision and to provide optimal values to
Finally, I extend my sincere appreciation to all Sido Muncul
employees, both active and retired, for their dedication
and loyalty in raising Sido Muncul to date. All of your
contributions have brought Sido Muncul to become one of
the modern herbs and herbal medicines industry. We hope
that every step we take can provide the best benefit to all