Indonesia Country Report 2016

Presented by

Discovery Reports

Kapal Api expands coffee business across Asia

The Indonesian company exports to Malaysia, Myanmar, China and the Philippines, and plans to establish coffee shop chains in China

PUBLISHED : Tuesday, 28 June, 2016, 2:14pm
UPDATED : Tuesday, 28 June, 2016, 2:14pm

Country Business Reports interviews and articles by Discovery Reports

As a young immigrant from Fujian in the 1920s, Go Soe Loet sold unbranded coffee on the streets of Indonesia. Balancing a wooden yoke, he peddled his goods to patrons who were mostly sailors whose ships were moored at the port of Surabaya, where he also ran a small coffee-powder factory.

In 1957, Go’s son, Go Tek Yok, suggested branding the product Kapal Api (a translation of “steamship”) as a tribute to the driving force behind the city’s prosperity. Indra Boedijono, Soedomo Mergonoto and Ahmad Rivai established Santos Jaya Abadi in 1979, developing a market for coffee by promoting the Kapal Api brand. The company has since expanded its business, carrying other brands to capture leadership within Indonesia’s coffee industry.

“Coffee is an important beverage in Indonesia, and the country has well-suited microclimates to grow and produce some of the world’s finest coffees,” says Mergonoto, CEO of holding company Kapal Api Global. “We aim to bring Indonesia’s coffee culture across Asia, with a focus on China.”

Living up to its stellar name, Kapal Api sparked a string of firsts in Indonesia’s coffee industry. The company pioneered the adoption of German roasting technology. It was also ahead in its use of nitrogen-flushed packaging to seal in the coffee’s freshly-roasted flavour.

We aim to bring Indonesia’s coffee culture across Asia, with a focus on China
Soedomo Mergonoto, CEO, Kapal Api Global

“A regular roaster requires about 45 minutes of roasting time, but our computer-controlled machines enable us to roast within six to 12 minutes. This helps preserve the coffee’s pleasant, earthy aroma,” Mergonoto says. The company’s commitment to innovation and high quality made it a popular destination for Chinese delegates during their state visit last year.

Coffee products – with brands including Good Day, Kapal Api, ABC, Kapten and Ya – comprise 85 per cent of Kapal Api’s total business. The company exports to Malaysia, Myanmar, China and the Philippines, with supermarkets and retail stalls providing its routes into these markets. It also sells various types of instant coffee using 100 per cent robusta beans.

Kapal Api has a 1,200-hectare plantation in Sulawesi, where it organically grows the finest coffee beans and other well-known varieties such as Kalosi Toraja. It also breeds civet cats at its plantation for its kopi luwak production.

Kapal Api’s other products include candies, biscuits and non-dairy creamers. It also ventured into the coffee shop business under the brand Excelso, with 120 branches across Indonesia. Kapal Api has 44 distribution outlets in the country.

In China, the company plans to establish coffee shop chains and welcomes partnership opportunities with franchisees. It also targets increasing its retail sales of instant coffee products and eyes China’s e-commerce market as a potential revenue stream.


Kapal Api Global