Jonatha Sofjan Hidajat
Although the performance achievement
in 2022 was not as high as in 2021 when
the market was still influenced by the
sentiment of an increase in COVID-19
cases, the Board of Directors was able
to maintain business continuity with
intensive and innovative marketing
programs to boost sales, especially for
flagship products with high margins.
Dear Honored Shareholders,
Hereby we deliver the supervisory report of the Board
of Commissioners regarding the development and
management of PT Industri Jamu Dan Farmasi Sido
Muncul Tbk (the “Company”) for the financial year ended
December 31, 2022.
Global economic recovery from the impact of the
COVID-19 pandemic starting in mid-2021 has raised
optimism that 2022 would be a year of recovery. However,
the emergence of the Omicron variant of the SARS-CoV-2
virus at the beginning of the year and the Russian invasion
of Ukraine on February 24 caused the global economy to
return to a state of uncertainty.
The war in Ukraine, followed by sanctions from the United
States and a number of Western and Asia-Pacific countries
against Russia, triggered geopolitical tensions and
impacted global economic activities. The food and energy
crisis quickly became a new threat as Russia and Ukraine
have crucial positions in the global food and energy supply
chain. Supply chain disruptions caused commodity prices
for raw materials, energy (including oil, natural gas, and
coal), and food to soar beyond unprecedented levels,
driving up inflation. The global inflation rate reaches
highest level since the 2008 financial crisis.
Global dynamics certainly affected the Indonesian
economy. According to the Central Statistics Agency
(BPS), Indonesia’s inflation rate in 2022 reached 5.51%,
higher than the government’s target of 3.0+1% and much
higher than inflation in 2021 of 1.87% and 1.68% in 2020.
The increase in inflation was mainly influenced by the
policy of adjusting the price of fuel and non-subsidized
LPG, which had a subsequent impact, especially on the
price of basic commodities and transportation costs. With
relatively stagnant income levels, people, especially the
lower middle class, prioritized spending on basic needs
and postponed other non-urgent needs.
On the other hand, pandemic control in Indonesia
improved. Implementation of health protocols and
massive vaccinations, as well as quick and effective
handling of suspected cases of COVID-19 through
telemedicine services in the PeduliLindungi application,
encouraged Indonesia to declare a transition from
pandemic to endemic. On December 30, 2022, the
government officially lifted the public activity restriction
(PPKM) across Indonesia. This condition also impacted
decreasing demand for vitamins and health supplement
products compared to demand in 2021.
The Board of Commissioners appreciates outstanding
performance in 2022, although lower than the 2021
achievement when the market was still influenced by the
sentiment of an increase in COVID-19 cases. However,
the Board of Directors was able to maintain business
continuity with intensive and innovative marketing
programs to boost sales, especially for flagship products
with high margins. In 2022, the Company also launched
seven new products in response to consumer needs and
strengthened its digital marketing platform to reach the
targeted millennial consumers.
At the end of 2022, the Company recorded net sales of
Rp3.87 trillion, down 3.9% from Rp4.02 trillion in 2021.
Jamu Herbal & Supplement segment experienced a slightly
decreased of 2.2% from Rp2.69 trillion in 2021 to Rp2.63
trillion, and Food & Beverages segment decreased by 8.5%
from Rp1.19 trillion in 2021 to Rp1.09 trillion. Meanwhile,
the Pharmacy segment grew 4.3% from Rp137.15 billion in
2021 to Rp143.05 billion.
The Company earned a net income of Rp1.10 trillion,
which decreased by 12.4% from Rp1.26 trillion in 2021, in
line with a decrease in sales. Net income margin also fell
from 31.4% in 2021 to 28.6%.
The Board of Commissioners also noted several admirable
achievements. The Company’s strong commitment to
environmental management was rewarded Gold PROPER
Award of the Ministry of Environment and Forestry for
the third time and won the Leading Green Leadership
Award from the Ministry of Environment and Forestry for
company leaders who optimally carry out environmental
management programs in business operations and
community development while dominating Gold PROPER
In addition, the Company also received the “Level 5”
Green Industry Award for the fifth time from the Ministry
of Industry and 2022 Indonesia’s SDGs Action Awards as
the Best Winner I, Big Business Player Category from the
National Development Planning Agency.
The Board of Commissioners performed supervisory
functions of the management of the Company by the Board
of Directors from the stage of formulating strategies and
setting performance targets before the beginning of each
financial year. The strategic planning process is performed
in joint meetings of the Board of Commissioners and the
Board of Directors, which includes discussing business
developments and determining short and long-term
On this occasion, the Board of Commissioners actively
performs supervisory and provides advice, insights, or
recommendations to the Board of Directors regarding
business plans that will be determined and mutually agreed
upon. The Board of Commissioners’ recommendations
complements the Company’s strategy formulation process.
The strategies and strategic policies agreed upon and
approved are translated into performance targets, operational
planning, and cascaded work programs down to the lowest
structure in the form of key performance indicators (KPI) to
be achieved in the respective financial year.
The Board of Commissioners and the Board of Directors
intensively communicate to ensure that the Company’s
performance targets are achieved. Formally, implementation
of the supervisory function of the Board of Commissioners
on the performance of the Board of Directors is carried out
through joint meetings of the Board of Commissioners and
the Board of Directors and regular meetings of the Audit
Committee with the Finance Director and Internal Audit Unit.
During 2022, the Board of Commissioners held 12 joint
meetings. In this forum, the Board of Directors reports
the results of monthly operational performance, quarterly
financial performance, encountered challenges and
solutions, as well as plans for further improvement.
Involvement of the Board of Commissioners since
the beginning of formulation is intended to open a
wider perspective or point of view in various aspects
of the Company management to assist the Board
of Directors in formulating strategic initiatives and
cascading performance targets according to the needs
of organizational development to achieve the Company’s
In the view of the Board of Commissioners, the Board
of Directors has implemented business strategies with
appropriate and effective initiatives, taking into account
the advice and recommendations of the Board of
Commissioners, as well as developing external factors so
that the Company was able to maintain admirable growth
The world economy in 2023 will still face severe challenges,
and even the threat of a recession is imminent. Several
factors will weigh on global economic growth, from tight
monetary policies in many countries, ongoing geopolitical
conflicts, high-interest rates, and spikes in inflation due to
rising energy prices, industrial raw materials, and food to
slowing global trade.
Multinational institutions, such as IMF and World Bank,
have repeatedly corrected their projections for global
economic growth in 2023. IMF cut its 2023 global
economic forecast from 4.4% in January 2022 forecast
to 3.2% in April 2022, then to 2.7% in October 2022.
Meanwhile, World Bank January 2023 announced its 2023
global growth forecast to be 1.7%, down sharply from 3%
in June 2022 forecast.
In the midst of global economic turmoil, Indonesia’s
economy shows good prospects. Bank Indonesia
estimates that Indonesia’s economic growth in 2023 will
remain strong in the range of 4.5-5.3% and will increase
to 4.7-5.5% in 2024, supported by private consumption,
investment, and positive export performance amidst
slowing global economic growth. Inflation is expected to
decline and return to the target of 3.0 ± 1% in 2023 and 2.5
± 1% in 2024, in line with controlled import prices inflation
with a stable Rupiah exchange rate and quick, anticipatory,
and forward-looking monetary policies.
The Board of Directors and the Board of Commissioners
discuss business prospects prepared by the Board
of Directors. In the joint meeting forum, the Board of
Directors elaborates on business opportunities to be
pursued for further discussion and analysis. The Board
of Commissioners conveys their considerations and
recommendations according to their professional
capacity. The Board of Commissioners believes that the
Company has positive business prospects in line with
increasing consumer awareness of health supplement
products derived from natural ingredients. The domestic
market is still wide open, especially in the youth segment.
This segment must be approached with a digital
marketing method different from conventional marketing.
Meanwhile, the export market is also increasingly in line
with the Company’s strategic initiatives to seek new
sources of growth outside the Indonesian market.
The Board of Commissioners ensures that the Company
implements good corporate governance (GCG) principles
at all organizational levels and in every business process.
Overall, GCG implementation in the Company has been
going well, especially in compliance with the applicable
laws and regulations. To improve GCG quality, the Board
of Commissioners reminds the Board of Directors to
safeguard effective internal control from the first line
of defense (operations) irrespective of an audit by the
Internal Audit Unit. The role of the Internal Audit Unit
should not only be as a watchdog but must become a
strategic partner to provide advice and added value to the
The Company implements financial and operational
internal control systems that adopt the framework of
The Committee of Sponsoring Organizations of the
Treadway Commission (COSO). Periodically, the Board
of Commissioners evaluates the effectiveness of internal
control through Audit Committee in coordination with
Internal Audit Unit. In implementing its work programs,
Internal Audit Unit always ensures that internal control
systems have been developed and embedded in each
business process because effective internal control
is an important and absolute requirement in GCG
implementation. In parallel, through the Audit Committee,
the Board of Commissioners carries out a supervisory role
to achieve this goal.
The Board of Directors implements a risk management
system that refers to best practices to manage all risks
effectively and efficiently. Overall, the Board of Directors
considers risks in formulating strategies and managing
the Company. However, the Board of Commissioners
recommends that the Board of Directors consider
establishing a risk management function since the
Company is currently in an increasingly volatile, uncertain,
complex, and ambiguous (VUCA) business environment.
The risk management function will help the Board of
Directors perform risk management procedures in a more
comprehensive, planned, and systematic manner so that
the Company will be able to anticipate more swiftly and be
better prepared to face loss probabilities.
During 2022, there were no changes in the composition of the Board of Commissioners.
The Board of Commissioners is well aware that the
Company owes every achievement to stakeholders’
support. Therefore, on behalf of the Board of
Commissioners, allow me to express my deepest gratitude
to all stakeholders for the trust given so that the Company
is able to go through every difficult and challenging period.
We also appreciate the Company’s Board of Directors,
management, and all employees for their performance,
contribution, and dedication to the Company’s business
sustainability. Hopefully, the Company can continue
to provide value-added and greater benefits for the
shareholders, employees, customers, business partners,
and all stakeholders in the future.