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Agribusiness Opportunities

in Kalimantan and Sulawesi


by Cisca Spencer, Asia Research Centre
and David Quane

Rural Industries Research and Development Corporation


Global Competitiveness Research and Development

RIRDC Publication No. 99/42 RIRDC Project No. UMU-20A


© 1999 Rural Industries Research and Development Corporation.
All rights reserved.

ISBN 0 642 57841 9


ISSN 1440-6845

Agribusiness Opportunities in Kalimantan and Sulawesi


Publication No. 99/42
Project No. UMU-20A

The views expressed and the conclusions reached in this publication are those of the author and not
necessarily those of persons consulted. RIRDC shall not be responsible in any way whatsoever to any
person who relies in whole or in part on the contents of this report.

This publication is copyright. However, RIRDC encourages wide dissemination of its research, providing the
Corporation is clearly acknowledged. For any other enquiries concerning reproduction, contact the
Publications Manager on phone 02 6272 3186.

Researcher Contact Details


Name: Cisca Spencer
Address: Asia Research Centre
Murdoch University
Murdoch WA 6150
Phone: 08 9360 6005
Fax: 08 9310 4944
Email: spencer@sunarc.murdoch.edu.au
Website: http://wwwarc.murdoch.edu.au

RIRDC Contact Details


Rural Industries Research and Development Corporation
Level 1, AMA House
42 Macquarie Street
BARTON ACT 2600
PO Box 4776
KINGSTON ACT 2604

Phone: 02 6272 4539


Fax: 02 6272 5877
Email: rirdc@netinfo.com.au
Website: http://www.rirdc.gov.au

Published in March, 1999


Printed on environmentally friendly paper by the AFFA Copy Centre

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Foreword
This research surveys the agribusiness opportunities for Australian companies in
selected regions of Indonesia. Recognising that Indonesia is a very large and
diverse country, not a single market, the study concentrates on the eight
provinces of Kalimantan and Sulawesi. It is a companion volume to an earlier
study by the Asia Research Centre, published as RIRDC Research Paper 96/6,
which covered Sumatra and East Java.
The study was jointly funded by the Department of Agriculture, Fisheries and
Forests (DAFFA), RIRDC and AusAID.
The choice to commission a study of Kalimantan and Sulawesi in part reflects
the Australian Government’s desire to increase the knowledge of the Australian
private sector about the opportunities there, and in this way contribute to the
impetus of the Australia Indonesia Development Area (AIDA) initiative.
Additionally, knowledge about the agribusiness potential of Kalimantan and
Sumatra is more limited than that of Java, which remains the agribusiness hub of
the archipelago.
While this research has been written at a time when Indonesia faces a very
uncertain future, a key point is that it will come back as a market for Australian
agribusiness products and expertise: in the meantime, companies need to
maintain their links in Indonesia and be ready to develop the potential that is
undoubtedly there.
This report, a new addition to RIRDC’s diverse range of over 250 research publications,
forms part of our Global Competitiveness program which aims to identify important
impediments to the development of a globally competitive Australian agricultural sector
and support research that will lead to options and strategies to remove these
impediments. This report, and others, can be viewed or purchased online at
www.rirdc.gov.au/pub/cat/contents.html

Peter Core
Managing Director
Rural Industries Research and Development Corporation

iii
List of acronyms
AIDA Australia Indonesia Development Area
BAI Business Advisory Indonesia, one of many private sector groups
interacting with the government on policy issues
BAPPEDA Badan Perencanaan Pembangunan, or Development Planning Board
BIMP-EAGA Brunei Indonesia Malaysia Philippines-East Asian Growth Area
BKPM Badan Koordinasi Penanaman Modal, or Investment Coordinating
Board, which vets foreign and domestic investment applications
BKPMD Badan Koordinasi Penanaman Modal Daerah, provincial offices of
BKPM
BPS Biro Pusat Statistik, or Central Bureau of Statistics
BULOG Badan Urusan Logistik, or National Logistics Board (established to
stabilise prices for staple foods, especially rice)
CIF Cost Insurance Freight
EFIC Export Finance and Insurance Corporation
GMP Good Manufacturing Practice
HACCP Hazard Action Critical Control Points (process used to monitor safety
procedures)
ISO International Standards Organisation
PMA Penanaman Modal Asing, or Foreign Investment Company
PMDN Penanaman Modal Dalam Negeri, or Domestic Investment Company

Glossary of Indonesian terms


bakso meatballs usually made of chicken or beef, often served in soup
dalam anka each province produces a standardised annual volume of statistics, e.g.
Sulawesi Selatan Dalam Anka, South Sulawesi in figures
fiskal departure tax levied on Indonesians travelling abroad by air or sea (with
some limited exceptions, e.g. departures from Kalimantan to other parts
of Borneo Island)
halal method of slaughtering and preparing food according to Islamic law
kecap sauce, which can be spicy or sweet, used for meat and vegetable dishes
khaki-lima mobile food vendors
krupuk crisp dry deep-fried cracker, often flavoured with prawn or fish, served
as an accompaniment to a meal
ramadan fasting month in the Muslim calendar, during which observers do not
eat between sunrise and sunset. It is followed by a week of feasting and
family celebration
tahu precipitated soybean cake
tempe fermented soybean paste, often served fried or boiled as a snack, or as
part of a meal

iv
Contents
Foreword iii
Contents v
Tables viii
Figures viii
Maps viii
List of acronyms iv
Glossary of Indonesian terms iv
1. Executive Summary IX
1.1 The Impact of the Economic Crisis ix
1.2 Kalimantan and Sulawesi x
1.2.1 Major findings: production and processing x
1.2.2 Major findings: retailing xi
1.3 Recommendations xii
1.3.1 Retailing xii
1.3.2 Production and processing xii
2. General Points 1
2.1 The Indonesian consumer 1
2.2 Doing business in Indonesia: some basic issues 3
2.2.1 Terms of payment 3
2.2.2 Investment licences 3
2.2.3 Customs 4
2.2.4 Accurate information 5
2.2.5 Food safety issues 5
2.2.6 Halal 6
2.2.7 Health foods 6
2.3 The experience of some Australian companies 7
3. Agribusiness Opportunities in Kalimantan and Sulawesi 9
3. 1 Business opportunities in Kalimantan and Sulawesi relative to other parts of Indonesia 9
3.2 Exports of Australian products 10
3.3 Technical and managerial skills 11
3.4 Export of food and packaging equipment 11
3.5 Distribution systems 12
3.5.1 Distribution in Kalimantan and Sulawesi 12
3.5.2 Investment in retail and distribution 15
3.6 BIMP-EAGA 16
3.7 AIDA 16
3.8 Problems of centralisation 17
3.9 Transport 18
3.10 Speed of development 18
3.11 Retailing: partnerships with supermarkets 19
3.12 Catering to the mining industry 21
3.13 Agribusiness opportunities in Kalimantan 21
3.14 Agribusiness opportunities in Sulawesi 22
3.14.1 South Sulawesi 22
3.14.2 Central Sulawesi 24
3.14.3 North Sulawesi 25
3.14.4 South-east Sulawesi 26
3.15 Special investment for Eastern Indonesia 27

v
Annex 1: Kalimantan 29
1.1 Introduction 29
1. West Kalimantan 29
1.1 Introduction 29
1.2 Infrastructure 29
1.3 Agricultural Production 30
1.4 Current and potential agribusiness development 34
1.5 Agroindustry - processing 34
1.6 Agricultural imports 35
1.7 Agribusiness exports 35
2. East Kalimantan 35
2.1 Introduction 35
2.2 Infrastructure 35
2.3 Agricultural production 36
2.4 Current and potential agribusiness development 40
2.5 Agroindustry - processing 40
2.6 Agricultural imports 41
2.7 Agribusiness exports 41
3. South Kalimantan 41
3.1 Introduction 41
3.2 Infrastructure 41
3.3 Agricultural production 42
3.4 Current and potential agribusiness development 46
3.5 Agroindustry - processing 46
3.6 Agricultural imports 46
3.7 Agribusiness exports 46
4. Central Kalimantan 47
4.1 Introduction 47
4.2 Infrastructure 47
4.3 Agricultural production 48
4.4 Current and potential agribusiness development 51
4.5 Agroindustry - processing 51
4.6 Agricultural imports 52
4.7 Agribusiness exports 52
5. Sulawesi 54
5.1 Introduction 54
6. South Sulawesi 55
6.1 Introduction 55
6.2 Infrastructure 55
6.3 Agricultural production 56
6.4 Current agribusiness development 59
6.5 Agroindustry - processing 60
6.6 Major agricultural imports 60
6.7 Major agribusiness exports 60
7. Central Sulawesi 61
7.1 Introduction 61
7.2 Infrastructure 61
7.3 Agricultural production 62
7.4 Current agribusiness development 65
7.5 Agroindustry - processing 66
7.6 Major agricultural imports 66
7.7 Major agribusiness exports 66

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8. North Sulawesi 67
8.1 Introduction 67
8.2 Infrastructure 67
8.3 Agricultural production 68
8.4 Current and potential agribusiness development 71
8.5 Agroindustry - processing 71
8.6 Major agricultural imports 72
8.7 Major agribusiness exports 72
9. South-east Sulawesi 72
9.1 Introduction 72
9.2 Infrastructure 72
9.3 Agricultural production 73
9.4 Current agribusiness development 76
9.5 Agroindustry - processing 76
9.6 Major agricultural imports 77
9.7 Major agribusiness exports 77
Annex 2: List of persons interviewed during field trips (August/September 1997, February 1998)
78

Annex 3: Selected References 85

vii
Tables
Table 1 Percentage of average monthly per capita expenditure in
urban and rural areas by commodity group and monthly
per capita expenditure group class, 1996 1
Table 2 Trends in consumer spending by sector 2
Table 3 Analysis of consumer expenditure by object 2
Table 4 Social indicators (1) 2
Table 5 Social indicators (2) 3
Table 6 Cumulative approved foreign and domestic investment by region,
(1968 - June 1998) 9
Table 7 Cumulative approved domestic investment by sector,
(1968 - June 1998) 9
Table 8 Cumulative approved foreign direct investment by sector,
(1968 - June 1998) 10
Table 9 Gross regional domestic product by province 10

Figures
Figure 1 Sole distribution 14
Figure 2 Semi-direct distribution 14
Figure 3 Multi-distributor system 14

Maps
Map 1 Sketch map of agricultural trade flows 8
Map 2 Kalimantan 28
Map 3 Sulawesi 53

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1. Executive Summary
1.1 The Impact of the Economic Crisis
Economic crisis, drought and (in parts of Kalimantan and Sulawesi) forest fires have greatly
diminished prospects for new agribusiness. Kalimantan is physically not suited to large-scale
food production, and agribusiness is limited to plantation crops. Sulawesi is more diverse and
has more agribusiness potential.

The shake-up in Indonesian agribusiness – from production to retailing – is severe, but it will
also bring new growth and new opportunities. This will be caused by several factors:

• many private sector producers and processors are squeezed by debt and by shrinking
markets, especially in the more up-market sectors such as production under license of
foreign brands of dairy products, fruit juice, biscuits etc.;
• new investment in food crops, horticulture and livestock will be interrupted;
• the IMF-induced end of certain monopoly practices will bring new players onto the
market and change the way in which business is done;
• in retailing and distribution, hitherto closed to foreign equity investment, there will be
many changes brought about by the combination of foreign competition and the need to
hold on to a shrinking market.

The situation over 1997 and early ’98, when information for this study was gathered, has
been volatile and fast moving. Companies interested in export and other agribusiness
opportunities in Indonesia will need to monitor the situation constantly. However, the
Indonesian market will come back, and its size and proximity mean that it is not an option
for Australian business simply to pull out of Indonesia now, and then to expect to take up
where they left off once the situation improves.

Price constraints will make it harder to hold on to existing markets, whether bulk
commodities such as wheat, or processed foods. Other producers of wheat, such as the
USA, may provide incentives to capture more of the Indonesian market.

Exports of Australian products in the high-value areas such as horticulture, meat and dairy
products have been very badly hit. While these products constitute a small proportion of the
total food products sold to Indonesia, the loss of business and of confidence in the future is
still significant. When the market returns, Australian exporters will find new players and
ways of doing business (e.g. more or different importers). Either they will need to start all
over again, only to find that competitors will have been working the ground before them; or
they can use the ‘dead period’ to monitor developments closely and establish new contacts,
while maintaining old ones, so as to be ready to do business when times improve.

The economic crisis will hasten a trend that has existed for some time. Namely, the future
for Australian agribusiness companies lies not in exporting products to Indonesia, but in
participating in the food industry in Indonesia: some years ago, supermarkets had imported
biscuits, confectionery and dairy products. Now many foreign brands are made under
license in Indonesia, at a much cheaper price than a fully imported product. Similarly, the
need to provide large cities with fresh foods will put traditional farming under pressure to

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modernise and industrialise production, providing opportunities for Australian companies to
participate in that process.

Retailing and distribution of food will also change. Some major changes were due there
anyway, since the growth of retailers catering to the upper income market had already
outstripped the growth of those income groups before the crisis. This point was made as
early as the 1996 report for RIRDC, Agribusiness Opportunities in Sumatra and East Java.
Now, to compete for a shrunken market and against incoming foreign companies,
Indonesian retailers and distributors will need to become more efficient and cost-effective.

There will be opportunities in the hitherto closed distribution sector, and to provide such
things as refrigerated transport and storage, packaging and labelling, all with the aim of
getting a fresher product at a higher value, but cost-effectively, to a price-conscious
consumer. However, that also is a longer-term opportunity, as distributors now, like the
retailers, are switching from imports to local products, trying to improve their credit terms,
and also squeezing their suppliers. The new terms on which foreign distributors can
participate in Indonesia are yet to be clarified.

The opportunities now in Indonesia are for Australian companies to buy into Indonesian
agribusiness. Equity and the control it can bring have never been cheaper, and there are a
number of otherwise good companies which have cash problems. This is of course not
without risk, as nobody knows how long it will be before business will pick up. It can be
hard to know whether a local company will be able to survive in a new political-business
environment, but a number of the least debt-burdened companies will certainly survive.
Australian companies should weigh the possible long-term gains of buying into basically
strong companies against risks in the current uncertain climate.

1.2 Kalimantan and Sulawesi


1.2.1 Major findings: production and processing
Over the next 5–15 years, Indonesian agriculture will modernise, under pressure from
liberalisation of trade in agricultural goods and from the need to feed a very large
population without excessive recourse to imports. The rising cost of land on Java will force
much low-value agriculture to move more production onto other islands. However, there
was little evidence before the economic crisis of new investment in agriculture in
Kalimantan and Sulawesi, apart from plantation crops such as palm oil. New investment in
food crops, livestock and horticulture will be delayed further by the economic crisis.

The long-term commercial opportunities for Australian agribusiness in Sulawesi and


Kalimantan, as elsewhere in Indonesia, lie in participating in the modernisation of
Indonesian agriculture: through partnership with the larger and more forward-looking local
firms, through investment, and through the provision of food services and technology,
whether this is refrigerated transport and storage, packaging and labelling technology,
integrated pest management systems or quality assurance systems, to name but a few.
However, as noted, this is a long-term prospect that will slowly radiate from Java to the
outer islands.

Business and government in Kalimantan and Sulawesi are all aware of the AIDA initiative,
and are hopeful that it will indeed lead to more private sector-led economic development of
their provinces. However, it would have to be said that business, in particular, is frustrated

x
by the overwhelming influence of Jakarta in their local business environment, and therefore
believes that, in the current situation especially, there is little capacity or will to address
some of the structural and other problems of business development in Kalimantan and
Sulawesi.

Kalimantan has land available, but little of it is suitable for intensive food or livestock
production: it is either uplands still largely forested and difficult of access, or peaty lowland
swamps not suitable (except at very high cost) for food crops or horticulture. The climate
and the poor nutritional value of tropical grasses make Kalimantan unsuitable for cattle
raising.

Kalimantan is a food deficit island and only limited areas of it are suited to food production:
the major primary products are timber, oil palm and rubber. Its small, scattered population
does not constitute a major market for traded foodstuffs. There is a local poultry industry,
which has however been severely hit by rising feed prices. Some chicken, and most beef,
are traditionally imported from Java and Sulawesi, as are fruit and vegetables. Over the
long term, there may be opportunities for Australian agribusiness to become involved in the
poultry and poultry stockfeed industry in Kalimantan and Sulawesi.

Sulawesi’s major advantages include more land available, and at lower prices, than in Java.
These advantages will only increase as land prices in Java come under pressure from
urbanisation and industrialisation. Sulawesi has seen rapid improvements in infrastructure;
and it has a range of climatic and soil conditions, which makes it suitable for various
agricultural and agro-processing activities. As with Kalimantan, the focus is on plantation
crops, including cocoa, coffee, palm oil, rubber, coconuts, and spices such as cloves,
nutmeg/mace and vanilla. The overwhelming bulk of these products are exported raw, or
processed on Java. There are few exceptions to this picture, but those exceptions are
commercially successful. Agro-processing is strongest in South Sulawesi, the most dynamic
of Sulawesi’s provinces, and the best connected to markets in Java.

On both islands the major problems remain: cost of getting products to major domestic or
export markets, and of bringing in capital goods; limited population, with attendant limits
on technical and managerial skills; limited purchasing power in the local markets; and
higher returns on investment elsewhere in Indonesia, making both islands relatively less
attractive as an investment destination for local and foreign investors. The current dire
economic conditions only exacerbate the problems.
1.2.2 Major findings: retailing
Food retailing, and the supporting environment of shopping centres and malls, is more
developed in Sulawesi than in Kalimantan, except for Balikpapan. Ujung Pandang and
Manado, the provincial capitals of South and North Sulawesi, both have new air-
conditioned shopping malls, and outlets of the major Java-based supermarkets, such as
Matahari, Gelael and Hero. All of these have opened since 1995. The Gelael store in Ujung
Pandang is the largest and best stocked supermarket outside Jakarta seen by the authors of
this report anywhere in Sumatra, East Java and Sulawesi. Hero has one store in Balikpapan
(in a large new mall) and one in Banjarmasin.

Smaller locally owned supermarkets also exist in all provincial capitals. In Manado (North
Sulawesi), Ujung Pandang (South Sulawesi), and Pontianak (West Kalimantan), they carry
an extensive range of imported foods. Palu (Central Sulawesi), Kendari (South-east

xi
Sulawesi), and Palangka Raya (Central Kalimantan) do not have Java-based supermarkets,
and their local supermarkets are not well stocked with imports.

Distribution usually is by a combination of local distributors/agents, and by Jakarta


headquarters in the case of chains. Distribution systems, traditionally Chinese-owned, have
been hard hit in the current crisis.

The food retail sector was hard hit by social unrest in the period leading up to President
Suharto’s resignation. This is because some large chains had connections to the then ‘first
family’, or because small supermarkets are dominated by Chinese. Some eleven of Hero
supermarkets are reputed to have been torched during the worst of the crisis. Players on the
food retail scene can be expected to change significantly over the next few years. For
example, one of the largest food retailers, Golden Truly, closed in 1998, while Hero is now
30% foreign owned.

1.3 Recommendations
1.3.1 Retailing
Export of Australian processed and high-value foodstuffs direct to Sulawesi and
Kalimantan is not a practical option, since decisions are made in Jakarta. The economic
crisis has also cut off imports of all but the most price-competitive foodstuffs. However,
Australian suppliers should use this period of downturn to develop their relationships with
distributors (including the new ones that will enter the game) to ensure that their products
will be well placed once the situation improves.

Australian distributors will find opportunities in the food distribution business itself, since
rules against foreign participation are being relaxed. Successful distribution by foreign
companies will require a very detailed knowledge of the complexities of networks in each
province, and is more likely to be successful if developed in partnership with local
companies. Indonesian distribution in outer areas such as Kalimantan and Sulawesi can be
rough, but it is surprisingly efficient and relies as much on informal networks as on
commercially developed distribution chains.

A new opportunity that may arise from this crisis lies in forming commercial alliances to
assist Indonesian supermarkets to be more competitive, as consumers become less free-
spending. The explosion of supermarket outlets that has happened in the last 5 years has not
been matched by a corresponding explosion in high-income consumers: thus competition
between supermarkets for the consumer is inevitable, and will be intensified by the
currency crisis. This could provide opportunities for Australian companies to provide
expertise in inventory management, supermarket planning and layout, staff training,
warehousing and distribution, perishables management, and so on. However, this
opportunity is not a short-term one. Most chains are now exclusively focused on survival
through cost cutting, rather than investing in becoming more cost efficient.

1.3.2 Production and processing


Maize is grown in much of Eastern Indonesia, for human consumption and as stockfeed. Up
to 1 million tonnes of maize are imported per annum, mainly for stockfeed, and there may
be opportunities to grow maize in Sulawesi to meet this demand. However, there are no
storage facilities or feedmills in Sulawesi or Kalimantan, so corn is sold at low prices to
traders in Surabaya in high season and re-imported from Java at high prices during low

xii
season: there would be scope for both corn storage operations and feedmill operations in
Sulawesi, and to a lesser extent in Kalimantan. If this were integrated with battery chicken
operations, there would be further commercial opportunities.

There are no commercial beef cattle feedlots anywhere in Sulawesi, although a number of
Australian companies are understood to have assessed the potential. There is land available,
especially in South and South-east Sulawesi, and the dry climate is more suitable than Java
or Lampung (where the current commercial feedlots are located). However, the relatively
greater distance from the major market of Jakarta makes the issue of transport costs to and
from Sulawesi a major hurdle, especially as there are no abattoirs in Sulawesi and cattle
would have to be transported live both ways. Raising cattle in Sulawesi would have to be
considered a long-term proposition, and only if rising land prices in Java offset the added
freight costs. Some efforts have been made to raise Australian-bred cattle commercially in
Kalimantan, but the climate has defeated these efforts. Local government officials continue
to believe that the potential is there.

There is some scope for horticultural operations in the Palu Valley (Central Sulawesi),
where suitable land is available, and irrigation is well established, using water from the
surrounding mountains. There is one large diversified agribusiness company operating in
this region, which already has one joint venture in cut flowers with an Australian firm, and
is interested in further developing its alliances with foreign firms. Horticultural
opportunities are also available in the Malino area (South Sulawesi) to supply the Ujung
Pandang market and possibly Kalimantan, and in the Gorontalo and Minahasa/Lake
Tondano areas of North Sulawesi.

There are more generic opportunities to provide services and technology in the plantation
sector, for instance integrated pest management, but it should be noted that smallholders do
not generally have the capital to improve the productivity of their plantation crops. Once
the large palm oil plantations, mainly in Kalimantan, regain their capacity to invest, there
will be scope to supply fertilisers, irrigation/sprinkling equipment etc. Suppliers need to
travel extensively to plantations, since many plantation managers are not aware of the
products that can be supplied by Australian companies. Plantation managers tend to look in
the handbooks produced by the associations of American equipment suppliers, in which
Australian firms can also register their details, and this can be one way of publicising
Australian firms’ equipment.

xiii
2. General Points
Table 1 Percentage of average monthly per capita expenditure in urban and
rural areas by commodity group and monthly per capita expenditure
group class 1996

Monthly per capita expenditure class (rp)


Commodity Less 15 000 20 000 30 000 40 000 60 000 80 000 100 000 150 000 200 000 300 000 Rata per
group than - - - - - - - - - and capita
15 000 19 999 29 999 39 999 59 999 79 999 99 999 149 999 199 999 299 999 over average
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
Food
Cereals 36,75 35,09 29,84 24,54 18,80 13,64 10,48 7,70 5,43 3,87 1,92 12,78
Tubers 6,37 3,67 1,83 1,19 0,84 0,66 0,55 0,46 0,39 0,31 0,19 0,67
Fish 3,47 4,54 4,99 5,45 5,73 5,64 5,22 4,65 3,84 3,18 1,97 4,78
Meat 1,17 0,50 1,00 1,50 2,42 3,32 3,88 4,49 4,65 4,14 2,83 3,23
Eggs and milk 0,50 1,07 1,62 2,18 2,75 3,25 3,42 3,63 3,50 3,10 1,95 2,95
Vegetables 6,46 7,07 6,73 6,66 6,24 5,65 5,11 4,39 3,64 2,87 1,60 4,95
Legumes 1,79 2,15 2,60 2,74 2,51 2,21 1,99 1,69 1,37 1,00 0,60 1,94
Fruits 1,10 1,65 1,85 2,16 2,57 2,96 3,21 3,44 3,57 3,33 2,37 2,88
Oil and fats 4,40 3,91 3,82 3,59 3,17 2,67 2,31 1,92 1,57 1,24 0,74 2,40
Beverages 4,15 4,58 4,60 4,39 3,89 3,35 2,91 2,48 2,03 1,64 0,88 2,99
Spices 1,86 1,92 1,96 1,92 1,78 1,57 1,42 1,26 1,02 0,81 0,47 1,41
Misc.food 0,52 0,43 0,76 0,93 1,16 1,38 1,51 1,64 1,58 1,31 0,84 1,29
items
Prepared food 1,84 2,76 4,65 6,37 8,22 9,54 9,97 9,84 9,31 8,51 6,26 8,48
and beverages
Alcoholic 0,02 0,08 0,07 0,07 0,07 0,06 0,07 0,09 0,09 0,12 0,06 0,08
beverages
Tobacco and 4,58 4,21 4,68 5,40 5,89 5,52 5,04 3,98 2,98 2,18 1,10 4,44
betel
Total of food 74,97 73,64 71,02 69,10 66,06 61,42 57,10 51,66 44,98 37,61 23,78 55,27

Total of non- 25,03 26,36 28,98 30,90 33,94 38,58 42,90 48,34 55,02 62,39 76,22 44,73
food

Total 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00

Source: Statistik Indonesia 1997, BPS, Jakarta, 1998, p. 520–521

2.1 The Indonesian consumer


Much prominence has been given to the emerging upper- and middle-income groups that
comprise approximately 10% of the population, or 20 million people. However, disposable
income has been seriously eroded in dollar terms by the fall of the rupiah since mid-1997,
by high inflation and by the rapid rise of unemployment.

It should be noted that, despite the severe downturn, the population, and especially the
middle class, has become more cosmopolitan. This process is assisted with about 15,000
students annually returning from studies overseas. International TV channels are easily
accessed with the ubiquitous parabola. Modern malls as well as international hotel chains
and restaurants can be found in cities throughout the country. These changes in the society
have affected the basic lifestyle, particularly urban lifestyles, and spending patterns.
Evidence of this may be easily seen in any large city in Indonesia, with the proliferation of
foreign franchised food outlets alongside traditional food stalls and in the high quality food
courts that can be found in all the malls and attached to the supermarkets.

The Indonesian consumer is very price and quality conscious. Only the highest 5% of
income earners are more quality than price conscious. Table 1 indicates that the lower
income groups still spend the largest proportion of their disposable income on fresh food,

1
but that all consumer groups spend similar percentages of their disposable income on
packaged or processed food.

Broad comparison with another ASEAN country, and Australia, is provided in Tables 2 and
3.

Table 2 Trends in consumer spending by sector


Consumer Expenditure on Food 1985, 1990 and 1996, million units of national currency

1985 1990 1996

Indonesia 28,965 39,314 77,584


Malaysia n.a. 21,711 31,726
Australia 22,740 33,233 51,826
Source: International Marketing Data and Statistics, 1998, p. 330

Table 3 Analysis of consumer expenditure by object


Consumer Expenditure by Object 1996 (% analysis)
% of total Food/ Clothing/ Housing Fuels Household Health Transport Leisure & Others Total
drink/ footwear goods & comms. education
tobacco & service

Indonesia 38.8 3.3 11.9 2.7 8.7 n.a. 3.2 1.1 30.3 100.00

Malaysia 31.7 7.0 7.5 4.4 13.3 2.5 15.2 6.7 11.7 100.00

Australia 22.7 4.9 16.9 2.1 6.2 8.1 14.1 10.7 14.4 100.00

Source: International Marketing Data and Statistics, 1998, p. 329

These figures, from 1996, do not reflect the severe recent decline in purchasing power in
Indonesia.

Table 4 Social indicators (1)

Availability of safe drinking Availability of sanitation services


water 1993 (%) 1993 (%)
Indonesia 65 55
Malaysia 90 94

Australia 95 n.a.

Source: International Marketing Data and Statistics, 1998, p. 312

2
Table 5 Social indicators (2)

Government % of % of Hospital Nutrition:


expenditure on population population beds per Calories and protein consumed per day
health (% of with access with access ‘000 per capita
central to health to polio inhabitants
government services, vaccination Calories (no.) Protein (grams)
expenditure) 1995 1995 (average 1992-94) (average 1992-94)
1994
Indonesia 3.3 80.0 91 0.7 (1990) 2,609 60
Malaysia 5.5 88.0 90 1.7 (1992) 2,782 64
Australia 13.4 98.6 72 5.5 (1990) 3,080 102
Source: International Marketing Data and Statistics, 1998, p. 417, 399, 402, 414.

2.2 Doing business in Indonesia: some basic issues


2.2.1 Terms of payment
A major component of Indonesia’s current economic crisis is the liquidity squeeze affecting
banks and businesses. Letters of credit and other normal mechanisms of international trade
have been virtually paralysed. At the time of writing, there is little value in discussing terms
of payment, since so few Indonesian companies have access to dollars in quantities
sufficient to maintain any semblance of normal trade.
2.2.2 Investment licences
Licences for agribusiness are issued by central and provincial government authorities,
depending upon the size and type of investment being made.

At central level the Investment Coordinating Board Badan Koordinasi Penanaman Modal
(BKPM) gives the final approval for all foreign and domestic investment proposals.
However, the Coordinating Board must consult the provincial authorities and its own
provincial office (BKPMD) before final approval can be given. There are no clear
guidelines on the importance or the weight of the consultations, or recommendations from
provincial level.

In 1990 the private sector group Business Advisory Indonesia (BAI) surveyed the business
community to determine the major costs and constraints on doing business. The overriding
conclusion from BAI’s report was that obtaining inputs and raw material was the most
important constraint on agribusiness in Indonesia, not the cost or the complication of
obtaining a licence. Linked with the problem of obtaining sufficient raw materials were two
associated constraints:

i. non-uniform or non-standard quality of key inputs,


ii. discontinuity of supply of raw materials.

The BAI report concluded that the cost of obtaining licences, permits, land and capital was
by comparison not as critical to the operation of agribusiness in Indonesia. The agribusiness
managers that participated in the survey ranked the cost of licences as the least important
for their business in Indonesia.

3
Although the BAI report is old, the authors of this report found during fieldwork in 1997
and 1998 that inadequate raw materials was still the major factor in agro-processing
ventures, which had either failed or were operating below optimum capacity. This applied
to fruit canning, fish canning and freezing, cocoa bean processing, cashew
opening/roasting, coconut oil and other coconut processing plants, in both Kalimantan and
Sulawesi. The same problem was encountered in 1995 and 1996 in Sumatra in fieldwork
for the RIRDC report Agribusiness Opportunities in Sumatra and East Java.

Tariffs on processed foods are much higher than on commodities and unprocessed
foodstuffs. There are few constraints other than tariffs for imported prepared food products
that are ready for direct distribution. However, all such products must be registered through
the Ministry of Health (Directorate General for the Inspection of Food and Medicines) to
obtain what is referred to as a ML number. For mixed container loads, the importer
generally does not register the products. However, Australian exporters who are serious and
want to enter the market in Indonesia for the long term should ensure that their products are
registered. The procedures are somewhat lengthy.

Any Indonesian licensed importer can import any product with the exception of meat,
poultry and alcohol products. For such items a special import licence must be obtained. For
those interested in exporting alcoholic beverages there are only two licensed importers;
these products are subject to very high tariffs (as high as 300%), as well as quotas.
Importers are based in either Jakarta or Surabaya, and are (on the whole) Chinese. They
may source some of their Australian imports from suppliers in Singapore rather than direct
from Australia. Their products are distributed into Sulawesi and Kalimantan through
(mainly Chinese) wholesalers. These networks can get imports to consumers at prices that
would defeat competitors operating according to the letter of the law.
2.2.3 Customs
In 1985 the Indonesian Government decreed that all imports with a value of more than
$US5,000 must bear verification reports from the Swiss inspection firm Société Générale
de Surveillance (SGS) and indicate the type of goods, quality and quantity and applied cost.
The inspections were carried out at the port of exit and the duties were calculated on the
CIF value at prevailing prices at the port of exit.

In 1991 the Indonesian Government and SGS formed a joint venture, PT Surveyor
Indonesia, to take over the inspection role of SGS. SGS still holds an interest in the PT and
provides personnel and service to the company

In 1995 the government decreed that air shipments entering the country would be subject to
local customs service inspections and would no longer need to go through the PT Surveyor
Indonesia inspection system.

The $US5,000 level for reporting goods is still in place and is reported to be being used to
advantage by some firms that tranship their goods through Singapore and Hong Kong.
Some warehouses in Singapore are set up to fill mixed containers of food products so that
the reported value is less than $US5,000. If such a practice were used, it would strengthen
the competitiveness of Australian products in the market, provided the cost of transhipping
and repacking the containers was less than the import duties to be paid.

From an Indonesian perspective, buying such container loads from companies in Singapore
is also very attractive, because of the short shipping time and the ability to get small

4
quantities. These benefits are to some extent countered by the high freight costs between
Singapore and Indonesian ports.

Food products with expiry dates on their labels must arrive in Indonesia well before the
expiry date. This ranges from one year before expiry date (for products with a shelf life of
two years or more), to two months before expiry date (for products with a shelf life of three
months).
2.2.4 Accurate information
Obtaining accurate information and statistics from Sulawesi and Kalimantan is very
difficult given the long lines of communication and many isolated areas. The Central
Bureau of Statistics (BPS) provides detailed information on a standardised province-by-
province basis, but the capacity of the less developed provinces to provide accurate
information about their own more remote areas is very limited, as can be seen by even a
quick glance at the dalam anka, or provincial statistical yearbooks.

The statistics obtained from government and official sources sometimes seem
contradictory, often because these statistics have been collected by different agencies over
different time periods. For example some agencies may have collected the data over a
financial year and others over the calendar year. Often clerical errors creep into the
statistics and it is not uncommon to find the kilogram production of some crop misquoted
as tonnes in the official statistics, or even for rupiah and dollar values to be confused.

Export statistics for a province may be misleading, because they are recorded by port of
departure rather than by provenance. This situation is also true of many other agricultural
products recorded in official statistics.

Any investor from Australia should always crosscheck the information and data with
as many sources as possible to verify accuracy and consistency. There is really no
substitute for visiting the area to assess personally the potential of any proposed
activity, while treating the official data as an indicative guide only.

In addition, the radical changes in the Indonesian economy since 1997 mean that even
recent figures on consumer behaviour or purchasing power are unlikely to reflect accurately
the rapidly changing circumstances. Cuts in government expenditure mean that BPS offices
are unlikely to be able to work at even basic levels, especially in the remote provinces.
2.2.5 Food safety issues
The food and beverage sector in Indonesia has developed considerably over the past five
years. Many factories have obtained ISO certification and have Hazard Action Critical
Control Points (HACCP) programs operating in their facilities. This is to satisfy demands
by Indonesia’s export markets, especially the USA in respect of seafood. Good
Manufacturing Practice (GMP) is a program being promoted by all government
departments involved in the food and beverage sector. However, there remains a perception
in Indonesia that imported foods have a higher nutritional value, have been produced with a
higher degree of hygiene and are safer than local foods. The way in which the American
franchised food chains operate reinforces this perception.

Australian-made products could be labelled and promoted for the Indonesian market
to highlight the high standards of safety and hygiene applying in Australia.

5
Food safety issues that are important for the Indonesian consumer can be highlighted as a
selling point for Australian products in Indonesia. These very same issues would not
perhaps be so important in Australia, as the consumer would assume a certain level of GMP
and safety simply by virtue of a product being on the supermarket shelf. For instance, one
Indonesian made brand of corned beef promotes that it is made under Australian
government approved standards.
2.2.6 Halal
Indonesia is the largest Muslim country in the world. All food consumed by Muslims must
follow the Islamic law and rules for preparation. Food that is so prepared is termed halal.

Halal meat products can be so described only if slaughtering procedures conform to Islamic
rules. The average Australian slaughterhouse and slaughtering procedures would not
conform to the Islamic requirements, although there are of course halal butcheries in
Australia to meet both domestic and export requirements.

Indonesian consumers distrust labels with a halal sticker on them. There has been much
debate in the Indonesian press and Department of Trade and Industry over the use of halal
stickers. Indonesian regulations stipulate that a sticker indicating the product as halal may
not be placed on any processed food. The halal certification must be an integral part of the
labelling and can be used only after the necessary requirements for the production of that
food, including inspection, have been met.

Halal certification is very important in certain types of food, particularly any meat product.
Australian manufacturers should take particular care in indicating on the label that
inspection and certification of the procedures for the preparation of the food have been
conducted by the Islamic religious authorities. As the Indonesian consumer is inherently
distrustful of the halal labels of food coming from non-Islamic countries, it may be
worthwhile to invite Indonesian importers and distributors of Australian-made halal
products to visit halal facilities in Australia.

Alternatively and depending on the product, it may be cost-effective in the long term to
establish a plant in Indonesia. This is particularly so in the light of pressure on imported
foodstuffs arising from the sharp depreciation of the rupiah since August 1997.
2.2.7 Health foods
Health concerns relating to salt, sugar, fat and fibre content do not figure with the vast
majority of Indonesian consumers. However, a striking new development, observed in
supermarket research since 1995 in Indonesia, is the appearance of health foods: these
include low-joule sweet foods – both local and imported – and low-fat dairy and other
products, and some weight reduction products and high-energy sports drinks. Energy
supplements (building on the market for baby food and nursing mother formulae) have been
on supermarket shelves for some years, but products marketed as ‘health foods’ are new.
They are still a minority product, for the highest-income groups, and stocks had all but
disappeared during 1998.

Pre-crisis, Australian health products such as vitamins and other dietary supplements
already occupied a strong position in the Indonesian market accounting for 26.6% of the
import market, behind the USA with 42% in 1995. China, in third position, accounted for
only 8.3% of imports. There are long-term opportunities for Australian suppliers to
capitalise on the consumer’s identification with imports as being more healthily grown and

6
more hygienically processed to promote products both for the general and the health food
market. Such products might include:

• high-fibre products (the Indonesian diet is very low in fibre and promotion would need
to have a strong education component);
• seeds and nuts, which would also fit into the Indonesian snack-food tradition;
• sports drinks, which would also capitalise on the strong pre-crisis growth in sales of
beverages;
• dried fruit and snacks such as fruit leather and so on: Indonesians already eat a good
deal of locally produced dried fruit, but the only imports seen on supermarket shelves
are Californian raisins and prunes. Australian dried fruits have never been seen. There
would be a market for dried apricots and other stone fruits, as well as dried apples and
pears, but they would need to be either very competitively priced, or packaged and
promoted specifically for the gift market or for the high-income consumer. Dates, for
the idul fitri holiday season, could also be successful.

The slashing of imports means that the development of health foods in Indonesia is likely to
be put on hold for some years. The local brands, which were beginning to emerge (e.g.
Nutrifoods) may therefore have gained a good foothold by the time the consumers are ready
to buy imports again. For Australian suppliers to this new market sector, the best tactic is
likely to be the development of relationships with local producers of health foods.

2.3 The experience of some Australian companies


Different Australian companies established for some time in Indonesia have reacted
differently to the problems and opportunities thrown up by the economic crisis. Goodman
Fielder has fully written off the $A9 million book value of its joint venture with the Sinar
Mas Group (producing margarine and cooking oil). Arnott’s biscuits, which moved from
exporting biscuits from Australia to manufacturing under license in Indonesia, bought out
its joint venture partner in 1998 for $A14 million: on investment in 1995, Arnott’s valued
the share in its books at $A24 million. Heytesbury Beef, a major live cattle exporter to
Indonesia up to 1997, no longer sells cattle, and is looking to re-enter Indonesia once the
economy re-emerges, both for live cattle feedlotting and value-added downstream
opportunities.

These examples indicate the range of risks incurred and options available for Australian
companies. It is certainly the case, for companies determined to develop the long-term
opportunities in Indonesia, that equity participation in Indonesian companies has never been
cheaper. The openings now available in retail and distribution make this section more
attractive, although this is offset in the short-to-medium term by the slump in purchasing
power. The risks of buying into an Indonesian company revolve around two issues: its debt
levels may not be fully apparent from the information provided during due diligence work;
and the political connections that may have been an essential factor in its profitability
before the change of regime may be severed, or indeed, be a liability in the new business
climate.

7
Map 1 Sketch map of agricultural trade flows

(not available electronically – contact RIRDC to obtain a copy)

8
3. Agribusiness Opportunities in
Kalimantan and Sulawesi
3.1 Business opportunities in Kalimantan and Sulawesi
relative to other parts of Indonesia
Improvements in transport and communications are indeed reducing barriers to business in
the outer islands and (as noted elsewhere) land costs on Java will drive some production
and processing off Java. The Government is making efforts to encourage investment in the
outer islands, which over time will bear fruit.

However, in terms of the relative attractiveness of business prospects in Kalimantan and


Sulawesi (as opposed to Java) the following tables provide an indication of the dominance
of Java in domestic and foreign investment. They also indicate the relative lack of focus of
nation-wide investment in agriculture, as opposed to other sectors.

Table 6 Cumulative approved foreign and domestic investment by region, 1968 –


June 1998

Foreign investment Domestic investment


$US million Percent Billion rupiah Percent
Sulawesi 8,972 4.2 23,874 3.8
Kalimantan 11,157 5.2 65,002 10.4
Java 136,919 64.2 366,595 58.6

Total Indonesia 213,204 100.00 625,896 100.00


Source: Indonesian Financial Statistics, Bank Indonesia, September 1998, p. 141–147

Table 7 Cumulative approved domestic investment by sector, 1968 – June 1998

Agricul- Forestry Fisheries Mining Industry Construc- Total


ture (incl. tion
food processing & services
Billion 120,014 6,564 9,044 5,626 355,748 102,166 625,896
rupiah
Percent 19.1 1.0 1.4 0.9 56.8 16.3 100.00
Source: Indonesian Financial Statistics, Bank Indonesia, Jakarta, September 1998, p. 141–147

9
Table 8 Cumulative approved foreign direct investment by sector, 1968 – June 1998

Agriculture Forestry Fisheries Mining Industry Construc- Total


(incl. food tion
processing) & Services
Million 11,313 703 639 9,532 131,448 59,572 213,204
$US
Percent 5.3 0.3 0.3 4.5 61.7 28.0 100.00
Source: Indonesian Financial Statistics, Bank Indonesia, Jakarta, September 1998, p. 141–147

The pattern of investment reflects not only the economic dominance of Java, but also the
fact that, with 67% of the total population, the major markets are in Java. Added to this is
the cultural and historical predominance of Javanese in Indonesia’s political system. In the
case of agriculture, the rich volcanic soils of Java are more productive than almost any
other region of the archipelago. The result is that Java still is a net exporter (by value) to the
other islands. This will not be sustainable over the long term, given the price and population
pressures on land in Java which have been noted elsewhere in this report. In the meantime,
the following table indicates the disparities between Java and the outer islands.

Table 9 Gross regional domestic product by province

Billion rupiah at current market price


1996 1996
(without oil and gas)
West Kalimantan 8,446 8,446
Central Kalimantan 5,273 5,273
South Kalimantan 7,170 7,164
East Kalimantan 25,344 12,683

North Sulawesi 4,818 4,818


Central Sulawesi 3,024 3,024
South Sulawesi 11,822 11,822
South-east 2,102 2,102
Sulawesi

Total Kalimantan 46,233 33,565


Total Sulawesi 21,765 21,756
Total Java 315,045 300,982

Total Indonesia 532,631 490,317


Source: Statistik Indonesia 1997 BPS, p. 557–558

3.2 Exports of Australian products


Given the current economic situation, the expansion of Australian food exports to
Kalimantan and Sulawesi is not a realistic option. Even when the situation stabilises, the
purchasing power in these islands is limited, with the exception of towns like Ujung
Pandang, Manado and Balikpapan. The market for fresh fruit and vegetables will recover

10
once the rupiah strengthens, but the recovery in consumption of imported meat, dairy
products and processed foods will in all probability be slower.

Since the collapse of the currency, there have been no new statistics that might give a
realistic picture of the purchasing power of consumers in Kalimantan and Sulawesi. 1996
dalam ankas showing per capita incomes are irrelevant in the current situation.

3.3 Technical and managerial skills


One constraint for Australian companies contemplating agribusiness in Kalimantan and
Sulawesi is the lack of indigenous technical and managerial skills. There are some good
universities and training institutes in the eastern islands, but the employment opportunities
for ambitious young graduates and business people are better in Java.

This said, it is quite common to meet managers or senior officials in Kalimantan and
Sulawesi who have been trained in Australia or whose children are being educated there.
Such people, aside from being familiar with western ways of doing business, are usually
well disposed to Australia and constitute a potentially valuable resource for Australian
businesses wanting to set up in these provinces. For instance, a Pontianak food retailer who
owns two supermarkets in that town sent his son to be educated in Australia; the son runs
one of the supermarkets and is anxious to use Australian expertise to upgrade the
supermarket management (once they have survived the current critical downturn). The
professor of Veterinary Science at Hasanuddin University, educated in Australia, routinely
uses Australian technology and equipment in his private practice. A former senior official
in West Kalimantan, now managing director of an oil palm plantation, is having his son
educated in Australia and is anxious to use Australian irrigation equipment for his palm oil
nurseries. By contrast, a North Sulawesi family-owned food processing company is
managed by a son educated in Singapore and the USA, who was unfamiliar with the
expertise available in Australia since he automatically turned to contacts from the USA and
Singapore.

Companies setting out to establish themselves in Kalimantan and Sulawesi may do


well to recruit Australian-educated graduates, who are likely to come from well-
connected families and to be valuable sources of information about these provinces,
as well as good bridges between Australian and Indonesian ways of operating.

The dearth of technical and managerial skills in eastern Indonesia has been recognised as a
constraint to private sector led growth in the AIDA region, and is a priority area for
cooperation between the two Governments. There may be scope for Australian companies
wanting to cement their business relationships by providing training for their Indonesian
staff to access training opportunities through the AIDA programs facilitated by AusAID.

3.4 Export of food and packaging equipment


Noodles and bakery goods are among the processed foods produced widely in Kalimantan
and Sulawesi. They are overwhelmingly produced by cottage industry-style factories
(although large companies such as Indofoods (noodles) and ABC (biscuits) are also
present). It has been estimated by the US Embassy’s commercial section in a report dated
July 1997 that home industries and cooperatives nationwide produced ten times more
bakery products than large factories, and 2 ½ times more noodles than the large plants.

11
Indonesian production of food processing and packaging equipment is still small. Sales of
local equipment reached a value of $US15.5 million in 1995 and was estimated at $US26.4
million in 1996. This contrasts with sales of imported equipment with $US210 million in
1995, and $US 278 million (estimated) in 1996. Most equipment is sourced from Taiwan,
China and Korea, not from the major manufacturers in the US, Europe and Japan. This is
because the preponderance of small-scale food processing plants in Indonesia means that
most equipment is small and inexpensive, ranging in price from $US1,000–5,000.

Australian suppliers of food processing and packaging equipment would not find a large
market in Kalimantan or Sulawesi, except as a result of decisions made in Jakarta by large
food processing companies in respect of their provincial plants.

3.5 Distribution systems


Distribution of foodstuffs throughout Indonesia involves a dual system: a localised,
traditional one involving many small distributors for goods traded on a local market (fresh
fruit and vegetables, snack foods, meat, and the dry goods sold in small stalls); and a more
modern, sometimes national, network for widely-used, low-cost products sold in all types
of food retail outlets (cooking oil, kecap, instant noodles). In addition, the major
supermarket chains (e.g. Hero Group) and major processed food producers (e.g. PT
Indofoods), also act as distributors of their own products, sometimes through a distribution
company that forms part of the conglomerate.

Distribution has been hard hit by social unrest during 1998. This is because it is largely
owned and controlled by Chinese. Information is patchy, but the smaller distributors in
provincial towns appear to be more vulnerable to looting and trashing of warehouses than
the bigger operators.
3.5.1 Distribution in Kalimantan and Sulawesi
Distribution in rural areas is mostly performed by wholesalers based in nearby small cities.
Wholesalers and sub-agents are often closely linked through ethnic and family ties, and
through common business interests. They frequently operate collectively within an informal
network that makes movement of goods surprisingly fast, despite an inherently fractured
and conservative distribution system. Sub-agents have usually been doing business in their
respective areas for a long time, and their intimate knowledge of it often compensates for
their lack of modern stock management. It is common for sub-agents to be slow payers, and
creditors have to be prepared to exert pressure to get paid. Sub-agents account for about
80% of volume of goods distributed in Kalimantan and Sulawesi.

The remoter areas of Kalimantan and Sulawesi pose some problems for distribution.
However, as the populations are small and purchasing power very limited, these problems
would not affect Australian exporters in any practical sense.

Companies catering to the mining and associated construction industries arrange their own
distribution to sites. As quantities are small, this may be by van or speedboat, and
refrigeration of perishables can be by very simple expedients such as eskies.

There are few large-scale distributors who aim for national coverage, and many of those are
distributor/manufacturers (e.g. Indofoods with its subsidiary distributorship PT Indo Marco)
or distributor/retailers (e.g. Matahari), or a combination of all three (e.g. Hero). While

12
distribution and other activities may be handled by separate companies within or associated
with the conglomerate, own products will take precedence over products from outside.
However, where there is no competition these distributors will handle outside products. One
distributor told us that imports are worth only some 10% of the goods distributed by
manufacturers/distributors. It is therefore well worthwhile to check if one of these mixed-
business distributors is interested in handling a particular Australian product.

As part of the IMF package signed in January 1998, the Indonesian retail and distribution
sector, hitherto closed to foreign equity investment, is to be opened up to foreign
participation. Over the long-term this will speed up the process of modernising Indonesia’s
distribution sector. However, during the current crisis, distributors and their customers will
be primarily focused on cutting their costs rather than investing in their long-term viability.

The following are the major independent foodstuff distributors with a national network:

Tigaraksa (food and toiletries)


Enseval (pharmaceuticals and food)
Wicaksana (food and general goods)
Intermas Tata Trading (Smart Corporation) (90% food, 10% general goods)

Each of these has different strengths, and suppliers themselves have different needs. It is
particularly important for Australian companies to check that large national distributors do
not lose focus on their particular product(s) as a result of carrying too many brands.
Australian companies interested in ensuring that their products are sold outside Java should
also check that a potential distributor is not over-centralised, but allows its regional branch
managers the autonomy to market their products energetically. Finding the right match will
be a matter of investigation for the Australian supplier. The checklist to look for in an ideal
distributor could include the following:

• good reputation, supported by a successful track record,


• extensive trade network,
• efficient sales organisation,
• ability to focus on your particular product,
• efficient infrastructure,
• efficient market information system,
• long-term commitment to building the market for your product,
• sound financial backup,
• not also acting for your direct competitors.

In addition, depending on the type of product, the logistics of cold chains are important:
there are very few cold stores or refrigerated trucks in use in Kalimantan and Sulawesi and
they are in any case mainly used for fish and shrimp exports. Some Chinese-owned
supermarkets in Balikpapan and Pontianak also own cold stores in which they are
sometimes willing to rent space.

While distribution systems vary, Figures 1 to 3 show typical set-ups.

13
Figure 1 Sole distribution

Manufacturer

Sole distributor

Subdistributor

Wholesaler

Supermarket
Retailers

Figure 2 Semi-direct distribution

Manufacturer

Sales department

Direct (Java) Subdistributor (outer Java)

Figure 3 Multi-distributor system

Manufacturer

Local distributor-region A Local distributor-region B E.T.C.

14
3.5.2 Investment in retail and distribution
Until 1997 foreign companies were not allowed to invest in retail and distribution through
direct equity investment. However, investment through technical service agreements,
licensing and franchising arrangements was allowed, and in this way major foreign retailers
have long been present in Indonesia.

In November 1997, the Indonesian government announced that, as part of quid pro quo for
the IMF rescue package, it would loosen the restrictions on foreign operators in the retail
and distribution sector. This will include allowing foreign companies to oversee their own
sales network, which may ease a major problem for suppliers of consumer goods to
Indonesia. By 2003, foreign investors will be allowed to sell their products to end-users
throughout the country. Before then, they should also be able to control wholesale
distribution through setting up their own local distribution networks, or by establishing
branches of their home-based distribution systems in Indonesia.

While at the time of writing the details of how exactly the Indonesian Government would
liberalise foreign participation in the retail and distribution sectors were not clear, what is
clear is that the restrictions will gradually ease and that this sector will provide
opportunities for Australian retailers and distributors. One firm which has not been slow to
realise this opportunity has been Cold Storage, the Singapore subsidiary of the Hong Kong
based Dairy Farms company, which has acquired a 30% stake in the supermarket group
Hero. Its stake includes management rights.

A BKPM Regulation, released on 13 May 1998, allows:

• foreign firms to establish joint ventures in the retailing/wholesale/distribution sectors


with up to 51% equity;
• fully foreign-owned export companies to operate wholesale/distribution or retail
businesses as long as this does not affect their main business of exporting.

All foreign joint venture companies in wholesale and retail will also have to demonstrate
that they are large-scale. To do this, both wholesalers and retailers must have sufficient
warehouse space and modern management. Additionally, retailers must have non-property
capital of at least $US100,000 and use modern service marketing technology.
Wholesalers/distributors must have adequate transport facilities.

Any involvement in these sectors by foreign firms would also be subject to an Indonesian
Government decree, issued in October last year, which requires large retailers, operating
outside provincial cities, to act in partnership with traditional markets and local
cooperatives.

Sectoral liberalisation will provide opportunities for Australian firms that have specific
expertise in distribution systems. In addition, there are a number of significant advantages
for Australian firms manufacturing in Indonesia to become involved in the distribution
sector:

• manufacturers would have more effective control over promotion of their products;
• it may allow companies to operate more efficiently, ultimately lowering the price of
goods; and

15
• the level of damage to goods, quality of service could be controlled more effectively. 1

3.6 BIMP-EAGA
The Brunei-Indonesia-Malaysia-Philippines East Asian Growth Area (BIMP-EAGA)
officially covers all eight of the Indonesian provinces in Sulawesi and Kalimantan. (Initially
it covered only East and West Kalimantan and North Sulawesi.) In practice, the awareness
of BIMP-EAGA is very limited, except among a few officials. There appears to be no
private sector impetus to develop business links with BIMP-EAGA neighbours except
where this is developing organically. The abolition of the hefty fiskal, or departure tax, for
Indonesians travelling from Kalimantan to other parts of Borneo has boosted travel between
major cities in Kalimantan and Kuching and Brunei, both of which can be conveniently
used to reach other international destinations. This has in turn boosted trade between, in
particular, Pontianak and Kuching, aided by the existence of a good sealed road and cheap,
frequent, good quality bus services between the two cities. Trade in agricultural products
includes frozen fish and some horticulture from West Kalimantan.

Over the long term, there may be opportunities to develop horticultural exports to East
Malaysia from West Kalimantan. However, the province is still a net importer of
horticultural products, despite the availability of suitable land. Horticulture is largely an
activity of recent Madurese transmigrants, rather than a traditional smallholder activity.
(The same is true of Balinese and Javanese transmigrants in South and Central Kalimantan.)

In North Sulawesi there is some awareness of BIMP-EAGA, but more in terms of a


business threat from the southern Philippines, perceived as a competitor in the tourism
sector and a more competitive producer of coconuts and their by-products than North
Sulawesi. There are also complaints that Filipino fishermen are poaching in North
Sulawesi waters. (The greater devaluation of the rupiah in relation to the peso may make
the Indonesian products more competitive in export markets.)

There have been other reductions in the costs of doing business between BIMP-EAGA
countries, such as reduced telecommunications costs, reduction in charges for Indonesian
vessels entering ports in the Philippines and some deregulation in the fisheries sector.
However, the economies of the BIMP-EAGA region are competitive in major commodities
(coconuts, oil palm, rubber); in the case of the oil and mineral wealth of East Kalimantan,
and the spices of North Sulawesi, the market is global; and in the case of small business
such as food processing and light manufacturing, they are also competitive rather than
complementary.

3.7 AIDA
There appears to be more awareness of AIDA and its aims than of BIMP-EAGA, not only
among officials but also among local chambers of commerce and business people.

While AIDA aims squarely at developing the private sector as an engine of economic
growth in Eastern Indonesia, it has the advantage of realism in recognising that Australian
aid programs will also be necessary to provide impetus to the process. This is a plus that

1
Information from Department of Foreign Affairs and Trade Asialine, June 1998.

16
BIMP-EAGA does not have. The aid component will be crucial in the period until the
Indonesian economy revives.

Australian agribusiness companies assessing the opportunities in Kalimantan and Sulawesi


would be well advised to contact the Agriculture, Forestry and Fisheries Sub-committee
(currently chaired by Mr Patrick Markwick Smith, Department of Asian Relations and
Trade and Industry of the Northern Territory), as there is a range of programs for the
agribusiness sector that may be accessed to facilitate private sector involvement in eastern
Indonesia, including Kalimantan and Sulawesi.

3.8 Problems of centralisation


Like most of Indonesia, the development of agribusiness in Kalimantan and Sulawesi is
hampered by a high degree of centralisation: at the government level, planning and
infrastructure investment decisions are made in Jakarta (with local input). There has been
some loosening up to provide more autonomy for provincial development (e.g. the
decentralisation of some decision making to port authorities within the BIMP-EAGA
framework), but this is very limited still. In business, local bank branches are not able to
approve loans above approx. $US100,000 (pre-crisis exchange rates), which means that
access to capital for business development involves frequent and expensive trips to Jakarta
bank head offices. Major investment applications are approved by the BKPM in Jakarta,
and the local offices (the BKPMDs) frequently seem to be unaware of what investment
proposals are being considered for their province.

In agribusiness, smallholders dominate the production of commodities, but the marketing,


processing and exporting of these commodities are carried out by large firms in Jakarta and
Surabaya. As a result, most of the coffee produced in Toraja (South Sulawesi) is roasted
and ground in Java, the cashews grown in Sulawesi are opened and roasted in Java, the
maize grown in South Sulawesi is sold in high season for low prices to traders in Surabaya
and re-imported for stockfeed in low season at high prices by Sulawesi poultry farmers.
Cocoa grown in Sulawesi and elsewhere is exported unprocessed to Singapore traders or to
Java. However, there are two successful examples of foreign investment in Ujung Pandang
(Effem Foods, a subsidiary of Mars Foods, and Kong Guan, a Singapore biscuit maker)
which process cocoa to powder and butter. Copra from Sulawesi is only to a limited extent
processed to cooking oil in Sulawesi (indeed a number of mills have closed and the PT
Bimoli mills in Manado are running at well below optimal capacity). Most copra is sent to
Surabaya for processing. Agricultural inputs such as stockfeed and fertiliser are produced in
Java, although some of the raw materials such as maize or fishmeal could be sourced from
Kalimantan and Sulawesi.

In some cases, agricultural commodities were subject to a marketing monopoly that


effectively channelled profits away from producers in Kalimantan and Sulawesi into the
pockets of politically well-connected companies in Jakarta. Cloves are perhaps the best
known example of this practice, but it has also applied to the Pontianak citrus industry, the
rotan industry in Sulawesi, and the plywood industry in Kalimantan.

With the change in regime and nationwide demands for reform, including in business
practices, there may be some thorough changes in these practices. However, the economic
dominance by Java over the other islands, and its appropriation of their raw materials, is a
long-standing tension-ridden issue that is not going to be resolved quickly. Regional
inequalities are likely to persist for a long time. In fairness to the Suharto regime, some

17
efforts were made through the special policies adopted to promote economic development
of the eastern islands. President Habibie may well be more conscious of the needs of the
outer islands, being himself a native of South Sulawesi and the person overseeing the
eastern Indonesia development program under his predecessor.

3.9 Transport
While transport infrastructure has improved significantly in the outer areas of Indonesia,
companies should allow for delays when visiting these regions. Flights are often delayed
and can be cancelled without warning. Without alternative transport, it is possible to be
stuck for 48 hours until a flight is available. Commercial flights to the more remote parts of
Sulawesi, such as Kendari, can be difficult to obtain (there is one flight daily, via Ujung
Pandang in an F-28, which takes only 50 passengers, and even ticketed passengers are
liable to find themselves unable to board). Air transport between cities in Kalimantan may
involve travelling via Jakarta, which can be very time-consuming. Business travellers
should allow extra time when planning travel to the region, as they will find it hard to
maintain a tight schedule.

One positive side of the transport problems arising in the more remote locations is that
appointments are relatively easy to make even at short notice, and high level access is also
not so difficult as in some other provinces. In September 1997 the Australian manager of
Ellem foods in Ujung Pandang commented that he had found it easier than would have been
the case in Java to solve problems such as access to water and power, the recruitment of
labour etc, because of ready access to local senior officials.

If exporting foodstuffs to the outer islands, Australian suppliers should take care to check
that their agent or distributor can ensure that their product can be properly handled in the
event that shipping or airfreight is subject to delays. One supermarket manager in Manado
complained that imports were not very fresh by the time they got to the Manado store, and
this may be a problem arising from transport time between Jakarta/Surabaya and the outer
islands. Cool storage and refrigerated transport is generally not available in Sulawesi or
Kalimantan, except for seafood. Some importers and supermarkets rent refrigerated
containers to store perishables, but the cost is high, and there may be some attempt to cut
costs in refrigerating perishables.

3.10 Speed of development


While the level of economic activity in Sulawesi and Kalimantan is far from as high as in
Java, a key point to emphasise is the pace of change. South Sulawesi, Ujung Pandang in
particular, has grown very fast. There is a new industrial park (KIMA) outside Ujung
Pandang, where Sulawesi’s highest level of light industry (including some agribusiness) is
concentrated; the airport will be upgraded with French aid money; a toll road is being built
around the city; new hotels and a new port have appeared; new shopping malls and
supermarket outlets have been built. This has all happened since the mid-1990’s.
Hasanuddin University, the largest university in Eastern Indonesia, has a new campus just
outside Ujung Pandang. Small business and construction have mushroomed all over the
city, especially in the outskirts. Tourism, destined for the Tana Toraja region and the diving
sites not far from Ujung Pandang, is supporting a number of new 4-star hotels in the
waterfront area of the city. Ujung Pandang is the gateway between Java and Eastern
Indonesia, and its strategic location will grow in importance once Eastern Indonesia regains
impetus.

18
Manado, in North Sulawesi, is also developing, but not as fast as Ujung Pandang. A new
international airport is under construction there, and new hotels and shopping outlets are
also appearing. Tourism, in particular diving and other marine activities, is developing,
although it is not mass tourism by any means. The port of Bitung, 45-minutes drive from
Manado on the southern side of the Minahasa Peninsula, is being developed as the premier
port for Eastern Indonesia. The Trans-Sulawesi highway from Ujung Pandang to Manado is
now complete. However, North Sulawesi being a very spread out province, road
connections off the Trans-Sulawesi highway are slow.

The pace of change is much slower in Central and South-east Sulawesi, but there is new
building going on in their respective capitals, Palu and Kendari. There is a new port just
north of Palu, and new government buildings in both towns. The investment in both towns
appears to be dominated by government, rather than the private sector. There are no
shopping malls yet, and purchasing power is clearly not as strong as in South and North
Sulawesi. With small populations and more isolated locations, Central and South-east
Sulawesi can be expected to lag behind the other provinces for some time.

In Kalimantan, Balikpapan is the most dynamic city (supported by East Kalimantan’s huge
oil, gas and mineral resources), followed by Pontianak, capital of West Kalimantan.
Pontianak has a large Chinese community with its own business networks across South-east
Asia, and it is oriented more to trading with eastern Malaysia than with other parts of
Kalimantan. In February 1998, there was a large well-stocked Hero outlet in a new mall in
Balikpapan and three Chinese owned local supermarkets also stocking imports. Pontianak
has local Chinese-owned supermarkets, but no Java-based outlets, and no malls although a
site in Central Pontianak had been cleared for construction of a mall. Matahari was
rumoured to be opening there.

Banjarmasin, capital of South Kalimantan, is a timber town and river trading port, with
strong connections to Java. Hero has a store in Banjarmasin (recently reopened after it was
burned out in riots in May 1997), and a local Chinese family owns two supermarkets in the
city. They all stock imports, including some fresh fruit. In February 1998, Hero carried a
range of well-trimmed lean beef, including imported and locally fattened Australian beef.

Palangka Raya, in Central Kalimantan, is a pleasant but sleepy government town, well laid
out and attractive, but with very small and locally owned food outlets, with imports limited
to a few dry goods.

3.11 Retailing: partnerships with supermarkets


As noted in the section on distribution, the retail sector may change quite fast following the
announcement in November 1997 of liberalisation of foreign participation in this sector.

While the opportunities to export Australian foodstuffs to the Indonesian market have
shrunk severely as a result of the collapse of the rupiah, the long-term opportunities are
likely to be in providing the technology and services, and the managerial skills that are
needed to upgrade supermarket management in Indonesia. This was a point made in an
earlier report (Agribusiness Opportunities in Sumatra and East Java, RIRDC, 1996), and
which holds true even more after the 1997/98 currency crisis.

19
While there has indeed been a rapid growth in Indonesian consumer expenditure over the
past ten years, the growth in food outlets to serve those middle-to-high income groups has
been even faster.

The market has been able to absorb this explosion of retail outlets simply because the base
from which it has grown has been so low. However, those supermarkets which survive the
crisis will have to compete among themselves for the consumer dollar, particularly in
Jakarta and other major cities. The currency crisis and the economic downturn will hasten
the development of such competition, as will the possible arrival of foreign retailers, who
may have more control in their Indonesian operations than they have been able to have
under the earlier more restrictive rules for participation in the retail sector.

Indonesian supermarkets, particularly the smaller non-national chains, are not all run
according to the most modern principles. Their handling of perishables leaves something to
be desired, cleanliness can be approximate, the layout and lighting are often unattractive,
the queues at checkouts are long, the staff are willing but untrained, and the inventory
management is not always computerised. There will be opportunities for Australian
companies to provide training and other services that will make supermarkets more efficient
and competitive.

At present, these should be seen as long-term opportunities, as supermarkets are


struggling to survive and do so by cutting costs and squeezing suppliers. They are not
in a position to invest for the future to be more cost-effective or to provide a better
service.

Of the two largest national chains, Hero and Matahari, the former has no presence in
Sulawesi, although Hero was understood to be coming into Ujung Pandang in 1998. Hero
has one store each in Balikpapan and Banjarmasin in Kalimantan. Matahari is expanding
very aggressively throughout the country, with three stores having opened in eastern
Indonesia since 1995 (Ujung Pandang, Manado, Ambon). Openings were planned in
Kalimantan for 1998. Matahari is teaching English to its Manado staff, to cater to the
tourist market, is looking to upgrade its staff skills, and will have the financial capacity to
do so. As well as its new relationship with Cold Storage mentioned earlier, Hero also has a
link-up with the Australian company Davids Holdings, which is providing warehousing and
distribution services. Davids is also providing supermarket training to companies outside
the Hero stable, and could well be a vehicle through which Australian companies and
TAFEs could provide training. The Singapore based Cold Storage group, which bought
30% of the Hero supermarket chain, may be one entrée to provide such services.

Another supermarket manager (GORO, in Ujung Pandang) was about to undertake training
in retail management in Singapore: this type of training can be provided by Australian
companies, particularly if training is done in-country to limit the foreign currency cost of
training. GORO has experience with Australian executives in their fresh foods division in
Jakarta, and the company could well be amenable to approaches by Australian companies to
provide the training and other services that will help this relative newcomer to the food
retail scene to compete.

20
3.12 Catering to the mining industry
Most caterers to the mining and associated construction industry are based in Balikpapan,
East Kalimantan. The minesite workforce in Kalimantan in February 1998 was 12,000, half
of which is supplied by one caterer (PT Prasmanindo Boga Utama). The workforce they
supply is roughly 96% local and the rest are expatriates. The mining and construction
workforce in Sulawesi is smaller, estimated at some 7000 by one caterer, and involves
mainly nickel and gold mining in North and South Sulawesi. A very large gold mine, which
will employ 10,000 people in the construction phase, is also being developed in Sumbawa
Island (outside the scope of this study).

Caterers provide all the food and cooking staff, as well as arranging for food to get to the
sites. Transport systems vary, depending on the size and location of the site; in Kalimantan
and Sulawesi, there are a few large sites, but most are small and are supplied by river or
road. (The huge Freeport mine in Irian Jaya has elaborate long-term catering arrangements,
but is outside the scope of this study).

No catering company has been allowed to have its own import license, and caterers must
therefore buy from importers via wholesalers or from large distributors. Suppliers from
Australia wanting to supply the catering companies thus cannot deal directly with the
caterers. The importers are mostly Chinese and operate through their own channels, which
allows customs duty to have less impact on the end prices that caterers pay. Some of the
large caterers have their own cold store in Balikpapan. Given the limited number of
expatriates on minesites, and the increasingly good quality of Indonesian dry goods,
caterers have for some years been using more locally produced foods. For instance, 85% of
the beef used by the caterers in the early 1990s when it was competitively priced was
Australian. Now Australian beef costs two to three times more than Indonesian beef and
caterers in Balikpapan use frozen Toraja beef flown in from Ujung Pandang.

The scope for Australian suppliers to target the minesite catering market is very limited,
given that caterers do not have direct dealings with foreign suppliers and that local
foodstuffs predominate.

3.13 Agribusiness opportunities in Kalimantan


There are very few immediate opportunities for Australian agribusiness in Kalimantan. The
main constraints to the development of agribusinesses in the area are: -

• virtually no excess produce from the area other than for estate or plantation crops;
• very small local market and small population centres;
• very long distances to other markets, with river/sea transportation as the major means of
transport; and
• difficult peat soils with the associated acid sulphate problems or relatively infertile
podsolic soils.

Nevertheless, there are opportunities for agribusiness development in the long term,
particularly for those prepared to invest in perennial crops suited to the area. Areas for
mangosteens, bananas and, rambutans have been identified for potential investors. Investors
are also being actively sought for the development of 300,000 hectares set aside for rice
cultivation in West Kalimantan.

21
There is also the potential for equipment manufacturers to enter Kalimantan, particularly
those able to supply nursery equipment, misters and spray irrigation for new palm oil
plantations. Plantation operators would prefer to source out of Australia rather than
Singapore because of Australian after-sales and support services. However, plantation
managers know little about Australian products and need both information and personal
contacts. One way for Australian companies to get information to managers is to register
their details in the handbooks produced by American equipment suppliers.

As mentioned in more detail in the section relating to Sulawesi, there is the potential to
produce coir fibre, activated charcoal and desiccated coconut from the coconut production
in the province.

The provincial poultry industry has been decimated with the currency devaluation and the
resulting high cost of imported feed. The potential remains for investment in establishing a
local feed mill using Indonesian-produced raw material supplemented by imported soy
products to service the broiler industry in the area. Some corn is grown locally and, as palm
oil production increases, oil seed cake could also be used. Fish meal could also be produced
locally, although given small boats and erratic catches, consistent supplies of raw material
would be a problem.

There are also a number of potential commercial options in the timber-processing sector in
Kalimantan. Many hundreds of thousands of cubic metres of wood waste is produced
annually from saw milling operations in the area and could be used for dowelling,
mouldings and similar small-diameter products. Similarly, hundreds of thousands of old
rubber trees are cut down and replaced every year. Furniture from these trees is sought after
in Japan because of its very light colour and fine texture, and furniture-making is a very
large industry in Malaysia.

Some 5,000 hectares have been reserved for a pineapple plantation near Palangka Raya in
Central Kalimantan for investors wanting to establish the crop and an associated processing
facility. Similarly, land has been reserved for investors wanting to establish tapioca and
banana plantations near Palangka Raya. Some 430,000 hectares have been set aside for
palm oil, cocoa and pepper estates. With the current buoyant world prices for cocoa and
pepper, these could present some opportunities, despite transport difficulties.

3.14 Agribusiness opportunities in Sulawesi


While Kalimantan has been treated as a single unit in the preceding section, Sulawesi is
more diverse as far as agribusiness potential is concerned. Each of its four provinces has
therefore been treated separately.
3.14.1 South Sulawesi
Undulating foothills and relatively good soils make the province ideal for horticultural
production. Access to the markets in Kalimantan, especially the oil, mining and logging
supply city of Balikpapan, as well as to other areas in Sulawesi itself, make the location
attractive. Local investors are already establishing areas for supplying these markets.

Dehydrated vegetables are a major component in the ubiquitous instant noodles, but
manufacturers of noodles have difficulty in securing consistent, reliable supplies of
dehydrated vegetables. An agribusiness based upon onion and garlic could be established in
the area and supply the ever-growing world demand for such products.

22
Mango, guava and custard apple grown in the Jeneponto area are of very good quality and
could be processed for juice and supplement the established passionfruit industry in the
province.

There are a number of factories in Ujung Pandang producing passionfruit juice. There is a
very large passionfruit factory some 90 kilometres west of Ujung Pandang at Malino. The
plant is very modern and uses aseptic packing methods, but has never operated at installed
capacity due to raw material supply problems (a very common problem throughout
Indonesia).

Small-scale operators using low-cost simple extraction technology continue to expand their
production. The majority of the fruit is sold as single-strength juice with the preservative
Sodium Benzoate added.

As of September 1997, frozen passionfruit pulp was being exported to Australia from
Ujung Pandang. Many operators are anxious to make contact with Australian companies
with expertise in passionfruit production, processing, and marketing to form joint ventures.

High-quality Arabica Coffee is an important domestic and international industry in the area.
Already a number of Japanese companies have established plantations and processing and
roasting facilities. Domestic companies are increasingly sophisticated in developing
distinctive regional branding and attractive packaging of their coffee for the export and
tourist markets. There is potential for Australian companies to enter this area of
agribusiness.

Cashew nuts are becoming a very important industry in the area. Nuts are brought from the
other provinces for simple processing. (Any processing beyond roasting and opening is
done outside Sulawesi.) There are currently four factories in the area. These factories are
not working at capacity so there is little potential for Australian enterprises to enter the
market at the present time.

Candle nut is a crop that is not very well known or used outside Indonesia, but no
Indonesian kitchen would be without it. Nationally, approximately 170,000 tonnes of the
nut is used annually as a condiment. There is a possibility to introduce candle nuts for
Australia and other parts of the western world where there is a market for Asian foods.

The potential to establish a feed milling operation for the livestock industry remains very
good. At the present time corn is sent to the Surabaya feed mills on Java only to be
returned to Ujung Pandang as a component of a composite feed. A number of companies
are involved in the feed milling operations in the country but none in Sulawesi; nevertheless
the potential remains for expansion into Ujung Pandang and other part of Sulawesi.

Cattle and goat numbers in the province are large and will increase over the next few years
as the government development programs target the area. Ranching cattle has been tried for
many years in the area but has failed due to a combination of poor feed, inadequate
management and problems with land titling. Nevertheless, with the large amounts of corn
grown in the area, and the by-products from the local wheat milling operation, there is long-
term potential for establishing a feed lotting operation with Australian know-how to supply

23
beef once the middle class market returns, not only in the province, but to Jakarta and
nearby Kalimantan markets.

3.14.2 Central Sulawesi


There are very few immediate opportunities for Australian agribusiness in the province.
The main constraints to the development of agribusiness are:

• very small quantities of excess produce from the area;


• very small local market and low purchasing power;
• long distances to other markets; and
• limited tourism and mining activity, therefore no demand for western style
supermarkets or products.

The sea fishing industry probably holds the greatest underdeveloped potential for the area.
Central Sulawesi is the largest province in Sulawesi and has three ‘arms’ entering the Gulf
of Tolmini, the Gulf of Bone, and the Makassar Strait. However, it is unlikely that a fish
canning industry can be developed, given the competition from the more developed port of
Bitung in North Sulawesi and the investment already made there in the canning industry,
much of which remains idle.

The frozen fish industry, for both the domestic and Japanese markets remains attractive but
the initial investment and access to these markets remain difficult.

Shrimp farming remains a very attractive commercial proposition. There are numerous
good locations for constructing ponds in the area. However, the operation would have to
establish its own breeding and stocking system to be commercially viable. Both large-scale
and smallholder shrimp farming suffer from uncontrolled disease and pollution, as well as
poaching, which pose management problems for this otherwise potentially attractive
industry.

The foothills in Central Sulawesi and the relatively good soils make the province ideal for
horticultural production. Access to the markets in Kalimantan, especially the oil and mining
supply city of Balikpapan, make the location attractive. There is regular shipping from Palu
to Balikpapan. Already local investors are establishing areas to supply Balikpapan with
vegetables.

Although very demanding, the Japanese and US markets for brined cucumbers and gherkins
remain insatiable. The Palu valley is well suited to producing these crops.

Mango, guava and custard apple grown in the Palu valley are of very good quality and
could be processed for juice. Similarly, passionfruit is well suited to the foothills in the
province: production for export or to supplement the South Sulawesi industry that exports
to Australia could warrant further investigation.

New varieties of lowland grapes are available in the area. Sun-dried raisins and sultanas
could be the basis of a new industry. However, the grape growers have recently experienced
difficulty with a rust problem and as a result the price of locally produced grapes was
higher than imported ones (September 1997).

24
There is also the potential to develop coconut products from the area. Copra is still the
largest agricultural product exported from Central Sulawesi, mainly from the port of
Donggala. Small quantities of coconut oil are still produced locally, but some facilities have
closed, due to erratic raw materials supplies, and pressure on prices from competition from
palm oil. The potential for establishing an industry based on the use of coir and the coir dust
is enticing, as the collection of the raw material from the Palu valley would be relatively
easy. Similarly the production of activated charcoal from the shell of the coconuts is under-
utilised and could be the basis of an industry for the area. There is the potential to produce
desiccated coconut for both the baking and confectionery industry. As many of the coconut
palms are very old and losing productivity, there is also potential for furniture making from
the wood, which is an attractive hardwood.

High quality arabica coffee and green tea have the potential to become an important
domestic and international industry in the area. The diversified agribusiness company
Hasfarm has already established plantations and processing facilities for these two
commodities, and is promoting it as a regional speciality, rather than as generic coffee and
tea.

Similarly cashew nut, although a relatively new crop in the area, has the potential to
become of substantial economic importance. It is likely the unopened nuts will be shipped
for the foreseeable future direct to Java or to South Sulawesi for opening.

As for South Sulawesi, livestock numbers in the area, especially cattle and goats, are large
and will increase over the next few years as government development programs target the
area. With large amounts of corn growing in the area, there is the potential for establishing
a feed lotting operation with Australian know-how to supply the demand from Kalimantan
and other areas of Indonesia. However, the major market will remain Jakarta, and the
freight costs for live cattle between Central Sulawesi and Jakarta remain a disincentive.
3.14.3 North Sulawesi
The fish canning industry at the port of Bitung appears to hold huge potential. Four
factories have been established, but only two of these are now operating, at well below
installed capacity. Obtaining a regular supply of good quality fish is the major constraint
and it is unlikely that any Australian company could successfully enter this market at the
present time. However, the situation may warrant close watching by any company involved
in the fishing industry, as deregulation and the development of better facilities continues.

The frozen fish industry, especially for the Japanese market, is very active and still holds
some potential for investors or joint partnerships. The economic crisis means that equity in
local fishing companies could be obtained at unprecedentedly low prices, although the
viability of local businesses, and their debt levels, would be a concern no matter what the
price.

The mountainous topography and the fertile soils make the province ideal for horticultural
production. However, commercially viable large plots of land in the production centres are
not available, and the distance to both the domestic and international markets make
investment in horticultural production unattractive.

With the exception of copra, maize and chillies, the quantities of agricultural products
grown in the area are very small and are insufficient to promote or establish new
agribusinesses.

25
There is the potential to develop coconut products from the area. Copra is the largest
product exported from the area. Coconut oil is still produced locally in the area by the
Bimoli company, although two local companies have closed their oil milling operations.
There is potential for establishing an industry based on the use of coir and coir dust,
activated charcoal and desiccated coconut. Coconut by-products potential is currently
attracting interest from a number of local businessmen. There were rumours in September
1997 that a Swiss-Italian group was planning a large investment in by-products from
coconuts.

As in other provinces of Sulawesi, livestock numbers may increase over the next few years
with the government development programs targeting the area. With large amounts of corn
growing in the area, the potential remains for a feedlotting operation with Australian
expertise. However, the constraints of distant markets and the need to ship live cattle still
remain.

3.14.4 South-east Sulawesi


South-east Sulawesi shares the same limitations as Central Sulawesi, viz. very small
population with low purchasing power, limited tourism and mining, and limited local
production. Transport of produce from South-east Sulawesi is more difficult than from
Central Sulawesi, as all produce must go by at least two ferries to reach Java, and there is
no transport to other islands apart from very small ferry services to islands further east.

Over the long term, there may be opportunities in cattle raising. Balinese cattle are being
bred and fattened for the local market by smallholders and the government is promoting
investment in the south-western part of the province (near Kolaka, which has a direct ferry
to South Sulawesi).

Cashew nuts, as in the rest of the island, are a new industry and may present some
opportunity, given the very suitable climate.

Marine fishing and aquaculture present large opportunities, but will require huge
investments. The seas around South-east Sulawesi are under-exploited and there is scope
for further development of the potential, but this would need additional investment in
infrastructure, such as port facilities and processing plants. At present there is one large
Jakarta-based group undertaking marine fishing, which has ice-making and some simple
processing facilities in a part of Kendari’s port. There is no major investment in shrimp- or
fish-farming.

Cocoa has become an important export income for the province, but the beans are sent to
Ujung Pandang and on to Java for processing, as there are no facilities in South-east
Sulawesi. Hasfarm, the Jakarta-based agribusiness company, is planting cocoa in the
province, but plans no value-adding investment.

26
3.15 Special investment for Eastern Indonesia
The Indonesian Government has set in place measures to encourage investment in Eastern
Indonesia (including Kalimantan and Sulawesi). Presidential decree no. 89\1996 provides
for:

• imports of capital goods and other equipment needed for production are free of value-
added tax and luxury sales tax;
• taxable items may be transferred for further processing into an integrated Economic
Development Zone from outside, free of value-added tax and luxury sales tax;
• taxable items may be transferred for further processing between companies located
within the same or different Integrated Economic Development Zones free of value-
added tax and luxury sales tax;
• taxable items may be transferred for further processing between companies located
within an Integrated Economic Development Zone and companies in a Bonded Zone
free of value-added tax and luxury sales tax; or may be transferred for further
processing between companies located in an Integrated Economic Development Zone
and companies in different Customs Office District, free of value-added tax or luxury
sales tax, if the items thus processed return to the integrated Economic Development
Zone;
• imports of capital goods and other equipment directly connected with production are
free of Article 22 income tax;
• accelerated depreciation and amortisation for income tax purposes;
• losses can be carried forward up to 10 years;
• reduction of Article 26 income tax on dividends of 50% of the amount assessed.
Payment in kind to employees is acknowledged as a production expense rather than as
employee income. The costs incurred in developing the vicinity for public good are also
acknowledged as a production expense;
• licensing facilities.

There are no IEDl’s or Bonded Zones in Sulawesi or Kalimantan. Businesses to whom the
authors spoke did not feel that they had benefited from any of these special incentives,
although the broad benefits of intensified expenditure on infrastructure were seen as a very
important plus. Centralisation of both business activity and political power in Java (referred
to elsewhere in this report) means that investment incentives can do little to address the
deep regional imbalances that exist in Indonesia.

27
Map 2 Kalimantan

(not available electronically – contact RIRDC to obtain a copy)

28
Annex 1: Kalimantan
Introduction
Borneo is the third largest island in the world after Greenland and New Guinea. The
Indonesian part of Borneo is known as Kalimantan and covers 539,460 square kilometres,
or roughly two thirds the size of New South Wales.

Kalimantan has the last large remaining area of tropical rain forest in Indonesia. The island
is traversed by several massive river systems, including the Mahakam, which flows to the
east, the Kapuas, which flows to the west, and the Barito flowing to the south. Despite
making up 30% of the total landmass of Indonesia, Kalimantan is home to only 5% of its
population, or around 9 million.

There are four provinces: East, South, Central and West Kalimantan. The indigenous
people of Kalimantan are known as Dayaks and were once famed for their long houses and
head hunting activities. They still maintain many of their cultural activities and a distinctive
dress, tattooing and extending the ear lobes of the women. The elegant spidery decoration
on house roofs and clothing is very distinctive to the Dayak people.

1. West Kalimantan
1.1 Introduction
West Kalimantan is one of the largest provinces in Indonesia with an area of 146,807
square kilometres. Most of the 5 million inhabitants are settled in and around the Kapuas
river basin, which comprises the greater part of the province.

The capital city of Pontianak was of strategic importance during the Dutch time. In the
19thcentury, the city was reinforced and supplied by the Dutch to prevent any English
expansion.

At the beginning of the 18th century, gold was discovered, which brought thousands of
Hakka Chinese to the area. The Chinese also established tin mining on the island of Bangka
but when the tin was exhausted they moved to Pontianak. The city has the highest
concentration of ethnic Chinese in all of Indonesia, making up 10–15% of the population.
As a result, the province’s business links and access to capital across South East Asia are
stronger than those of the other three provinces of Kalimantan.
1.2 Infrastructure
The province’s thousands of rivers are still used as the main method of communication and
transportation. River transport can be problematic during the dry season. There are all-
weather roads throughout the province but maintenance and expansion of the network is
difficult because of the terrain and climate. A Trans Kalimantan road link is under
construction.

There is a good road to Kuching, the capital city of Malaysian province of Sarawak, and
numerous buses and trucks make the 6-hour journey daily. Trade between West Kalimantan
and Sarawak has expanded considerably since the road was built.

29
The province has 6 ports. Only three (Ketapang, Teluk Air and Pontianak) are classified as
ocean harbours. The other three harbours are classified as domestic harbours and are at
Sambas, Sintete and Singkawang. There is direct shipping to Kuching and Singapore, as
well as other Indonesian ports. The main port of Pontianak is 2–3 kilometres from the sea
on the Kapuas River. While it is the busiest port, it is thought that it will soon no longer
serve the needs of the province and a new sea port at Teluk Air is being developed, less
than one hour’s drive south of Pontianak.

The airport of Supadio at Pontianak has international status, with daily flights to Singapore,
but cargo space is limited and is used mainly for seafood exports. The airport can
accommodate Boeing 737 aircraft.

There are no cool storage facilities at the port or airport; however, private companies
maintain their own cool room facilities.

Continuous electrical power is a major concern for development of industry in West


Kalimantan.

TRANSPORT TIMES

Pontianak to Jakarta By air 1 hour 20 minutes

Pontianak to Singapore By air 50 minutes

Pontianak to Kuching By road Executive 20-seat buses cost


$10 for the 7-hour trip
Pontianak to Banjarmasin By air 1 hour 15 minutes

Pontianak to Jakarta By sea 30 hours

1.3 Agricultural Production


Agriculture (both for plantation and food crops) does not have a dominant role in the
provincial economy compared to the mining and timber industries. The main food crops
grown in the area are rice, corn, cassava, peanuts, soybeans, and cowpeas. The main
plantation crops are rubber, coconuts, palm oil and pepper. West Kalimantan’s
horticultural products are almost entirely grown for the local market. The main fruit grown
in the area are bananas, rambutan, durian, avocado and particularly mandarins. Pontianak
mandarins were famous throughout the country, but production has declined by 75% since
the mid-1980’s, due to disease and cartel marketing that disadvantaged growers.

Poultry feed costs are high because all stockfeed has to be brought into the province. The
broiler industry has virtually ceased to operate due to the currency crisis and the cost of
imported stockfeeds, which have gone from 900 rp/kg to more than 2,700 rp/kg
(February1998). There are no feedmills anywhere in Kalimantan, and feed is brought from
Java.

30
MAJOR AGRICULTURAL CROPS

Crop Area ( ha) Production


(tonnes)
Rice 341,104 838,863

Maize 25,003 37,307

Cassava 21,064 198,369

Soya Beans 6,906 7,115

Mungbeans 877 563

Peanuts 2,472 2,235

Source: West Kalimantan in figures 1996

MAJOR VEGETABLE CROPS

Crop Area (ha) Production


(Tonnes)

Sweet potatoes 2,268 16,907

Cucumber 3,282 12,401

Long beans 3,053 12,839

Water spinach 1,575 6,554

Tomato 245 780

Eggplant 1,318 3,659

Chilli 1,790 3,946

Spinach 2,409 5,517


Source: West Kalimantan in figures 1996

31
MAJOR FRUIT CROPS

Crop Number of Production Comments


trees/plants (tonnes)
Pineapple 1,342,502 3,189

Mango 22,684 506

Duku/Langsat 170,343 7,786

Durian 230,392 13,131

Mandarin 3,916,635 133,577 Only some 5,000 ha remain from a previous


total of more than 20,000 ha planted
Papaya 152,157 2,108

Salak 118,381 1,349

Banana 970,867 15,139

Rambutan 186,545 5,003

Nangka 103,571 3,989

Sapodilla 704

Guava 1,57

Source: West Kalimantan in figures 1996

MAJOR PLANTATION CROPS

Crop Number of Production Comments


trees/plants (tonnes)
Rubber 443,408 179,677

Coconuts 91,271 41,526

Palm oil 204,218 282,469 Most foreign investment in agribusiness has


been in palm oil
Coffee 9,990 3,902

Cocoa 2,486 0 Immature plantings

Pepper 5,865 2,203 Buoyant world prices during 1998 are a bright
spot in the current difficult situation.
Source: West Kalimantan in figures 1996

32
LIVESTOCK

Animal Animal Production Comments


numbers slaughtered
(tonnes)
Milk cows 55

Cattle 154,130 32,230 14,000 head are imported annually from East Java
for slaughter
Buffalo 7,315 n.a.

Horses -

Goats 105,477 42,190

Sheep 70 0

Pigs 616,921 94,022 Previous year 130,000 head slaughtered. The high
proportion of Chinese in Pontianak means that
pig production is important. Production has
declined due to disease problems.
Village chickens 4,672,500 7,010,780

Layers 1,782,000 n.a. Slaughtered birds included in broiler numbers.

Broilers 12,623,100 11,991,900 Numbers are expected to decline due to high feed
prices.
Ducks 368,600 195,370

Source: West Kalimantan in figures 1996

FISHERIES SUB-SECTOR

Type of fishery Tonnes

Marine fisheries 64,901

Open water 21,988

Brackish water n.a.

Freshwater ponds 1,411

Cages n.a.

Paddy field fish n.a.

Source: West Kalimantan in figures 1996

33
1.4 Current and potential agribusiness development
While investment capital is generally a severe constraint for business development in
Sulawesi and Kalimantan, the strong Chinese community in Pontianak is able to use its
networks throughout the region to gain access to investment capital.

The growth in links between West Kalimantan and Kuching (and, down the track, Brunei)
may mean that there is long-term potential for West Kalimantan to supply fresh goods to
East Malaysia and Brunei. Dried and frozen fish are already being exported to Kuching.

There are only 158 registered food processors operating in the province.

– A state owned PTP company operates rubber plantations in the province, with some
smallholders also using the processing facilities.
– There have been pineapple and fish canning operations in the province but these
closed down ten years ago due to the lack of raw materials.
– A high tech day-old-chick broiler operation has been established with investment
from Thailand (Charoen Pokphand Group) and produces 200,000 day-old-chicks
per month for the provincial market. However, this operation is also under threat
given the price rises for feed.
– Investment from Malaysia in the oil palm industry is continuing. Some 50,000
hectares have been planted and 480,000 hectares have been reserved for additional
oil palm plantings.
– Investment is being made in industrial tree plantations for paper and pulp.
– Some effort is being made to revive the mandarin industry. Formerly there were
20,000 hectares under cultivation but due to disease and the introduction of a
controlled marketing board only 5,000 hectares remain. Provincial officials and
businessmen appear unaware of developments in the world citrus industry and
cultivation technology.
– A Korean-owned plant is producing activated charcoal from coconut husks.
– A recent investment has been made to produce Aloe Vera as a drink.
1.5 Agroindustry - processing
Rice milling and polishing
Rice flour production
Rice wheat egg noodles
Tapioca products
Soybean products, soy sauce, tahu, tempe
Snack food production from corn, cassava
Prawn/fish crackers
Coconut oil extraction
Coffee processing (Robusta)
Rubber
Pepper
Soft drinks
Freshwater fish/shrimp ponds

34
1.6 Agricultural imports
Fresh fruit and vegetables
All forms of food products
Poultry feed
All packaging material
1.7 Agribusiness exports
Plywood
Wood mouldings
Crumb and RSS rubber
Frozen shrimp
Frozen fish
Pepper (white and black)
Copra
Crude palm oil (CPO)

2. East Kalimantan
2.1 Introduction
East Kalimantan covers an area of 211,440 square kilometres. Approximately 80% of the
province are still covered by tropical rain forest. The province is one of the most sparsely
populated of the country, with a total population of just over 2 million. The province has
very large oil and natural gas reserves and gold, coal and iron mines. Sand, kaolin, quartz
and phosphate are also mined. East Kalimantan is arguably the richest province in
Indonesia.

The capital of the province is the river town of Samarinda, is situated on the massive
Mahakam River, where the river is more than half a kilometre wide and some 100 metres
deep. Samarinda is some 45 kilometres from the sea and difficult to reach. It is very much
smaller than the centre of commerce for the province, Balikpapan.

Balikpapan is a very busy oil town with a population of approximately 500,000. The newly
constructed airport is of international size and standard and has a dazzling array of jets and
helicopters continuously landing and taking off. The airport is some 7 kilometres from the
main city of Balikpapan and is connected by a very good all-weather sealed road.
Balikpapan has a number of 5 star hotels and a foreign population said to be more than
1,500. Balikpapan is also the service centre for the oil and mining industry throughout
Kalimantan. Caterers to Indonesian mining and associated construction industry tend to be
based in Balikpapan, from where they service sites all over the country.

2.2 Infrastructure
There are many rivers in the area. This dissected topography makes inland travel difficult
and thus access to markets and the movement of produce from the outlying areas
exceedingly difficult, especially in the dry season. There is a good coastal road system but
it does not extend the length of the province.

35
The ports of Balikpapan and Samarinda are the most important harbours for the province.
Balikpapan has container facilities and is the main supply point for foreign companies
working in the mining and oil and gas sector.

A new international airport at Balikpapan has been recently constructed and currently there
are daily flights to Singapore and Brunei, as well as good connections to Jakarta and other
domestic airports. Cargo space is limited and is used mainly for seafood exports.

There are no cool-storage facilities at the port or airport of Balikpapan. Some supermarkets
and caterers to the mining industry have their own cool-storage facilities. The caterers
arrange their own distribution to mine sites.

TRANSPORT TIMES

Balikpapan to Jakarta By air 1 hour 50 minutes

Balikpapan to Banjarmasin By air 45 minutes

Balikpapan to Pontianak By air 1 hour 25 minutes

Balikpapan to Banjarmasin By road 10 hours

Balikpapan to Samarinda By road 4 hours

2.3 Agricultural production


The province has large tracts of peat soils, and tidal swamp areas that may be cultivated in
the future. There are areas of cleared land, undulating on the eastern side of the mountains
that could be brought under cultivation.

The main food crops grown in the area are rice, peanuts, soybeans and corn. Very few
vegetables are grown and most are imported from Java. The main fruit grown in the area
are bananas, rambutan, durian and oranges. Most fruit is imported from other islands. The
main plantation crops are coffee, sugar, rubber, pepper, cocoa and palm oil.

Some canning plants have been tried and have failed, due to the lack of a consistent and
continuous supply of raw materials.

The local broiler industry has virtually ceased to operate, due to the currency crisis and the
tripling of feed costs.

The province is not self sufficient in food production, as the following table indicates.

36
Commodity Provincial deficit
(tonnes)
Mandarin 2,733

Rambutan 46,960

Papaya 12,501

Banana 119,845

Beans 44,869

Leafy vegetables 40,020

Water spinach 32,233

Beef 13,393

Chicken meat 33,679

Eggs 94,758 **

Fish 6,154

Coffee 7,436

(Note**The figure for eggs above is quoted as tonnes but seems


very high and may be the number of eggs rather than a tonnage
figure. The figure has come direct from the source.)
Source: Plan for the Development of Agribusiness, from a base
line study and SWOT analysis from the City of Balikpapan, 1996.

MAJOR AGRICULTURAL CROPS

Crop Area ( ha) Production


(tonnes)
Rice 159,461 413,124

Maize 6,434 20,474

Cassava 9,305 119,088

Soybeans 4,046 4,357

Peanuts 3,351 3,161

Source: East Kalimantan in figures 1996

37
MAJOR VEGETABLE CROPS

Crop Area (ha) Production


(tonnes)
Sweet potatoes 3,456 29,604

Cucumber 1,387 14,149

Beans 1,128 12,528

Water spinach 1,271 8,009

Tomato 818 5,505

Eggplant 1,187 6,882

Chilli 1,594 7,504

Source: East Kalimantan in figures 1996

MAJOR FRUIT CROPS

Crop Area (ha) Production


(tonnes)
Avocado n.a. 139

Mango n.a. 639

Duku/Langsat n.a. 2,029

Durian n.a. 7,541

Mandarin n.a. 11,853

Papaya n.a. 5,250

Salak n.a. 206

Pineapple n.a. 1,255

Rambutan n.a. 6,130

Banana n.a. 26,427

Sapodilla n.a. 1,289

Rose apple n.a. 1,674

Source: East Kalimantan in figures 1996

38
MAJOR PLANTATION CROPS

Crop Area (ha) Production Comments


(tonnes)
Rubber 48,664 76,106

Coconuts 65,864 48,335

Palm oil 58,444 --- New plantations not yet producing

Coffee 15,491 2,752

Cocoa 36,194 125

Clove 486 20

Pepper 12,507 3,847

Source: East Kalimantan in figures1996

LIVESTOCK

Animal Animal Production Comments


number slaughtered
(tonnes)
Milk cows 0 n.a.

Cattle 82,558 25,481 24,891 head imported for slaughter

Buffalo 23,349 840 882 head imported for slaughter

Horses 2,251 n.a.

Goats 82,052 212 14,137 imported for slaughter

Sheep 2,657 n.a.

Pigs 114,335 2,190

Village chickens 4,139,400 n.a.

Layers 646,400 n.a.

Broilers 19,726,200 n.a. 1,353,000 imported for slaughter

Ducks 318,2000 n.a.

Source: East Kalimantan in figures1996

39
FISHERIES SUB-SECTOR

Type of fishery Production


(tonnes)
Marine fisheries 75,469

Open water 35,238

Brackish water 7,241

Freshwater ponds 147

Cages 3,587

Paddy field fish 50

Source: East Kalimantan in figures1996

2.4 Current and potential agribusiness development


There are approximately 54,000 registered small food and beverage processors operating in
the province.
– Agribusiness growth has been around 2 % per annum for the last 5 years.
– Investment in rubber plantations in the area has been linked with smallholders
preparing Ribbed Smoked Sheet (RSS). Production is exported to Surabaya.
– Large blocks of land (anything up to 1,000 ha) are unavailable for horticultural
production. The land ownership system and traditional land use systems are complex.
Available land is either flooded during the wet season or is of very poor quality.
– Investment in the cocoa industry has proved very profitable and is expanding.
– Further investment is being considered for cane sugar and tapioca processing.
– Old investments in coconut oil processing are now under threat with the expansion of
more competitive oil palm industry in the province.
– A planned cattle feed lot facility using imported Australian cattle was suspended in late
1997, due to the rupiah currency crisis.
– New investment in the oil palm industry has been expanding over the past few years.
2.5 Agroindustry - processing
Rice milling and polishing
Rice flour production
Rice wheat egg noodles
Tapioca products
Soybean products, soy sauce, tahu, tempe
Snack food production from corn, cassava
Prawn/fish crackers
Crumb and rubber sheet
Coconut oil extraction/refinery
Coffee processing (high quality Robusta)
Cocoa
Palm oil (CPO)
Candle nut processing
Sugar refining
Cigarettes

40
Freshwater fish/shrimp ponds
2.6 Agricultural imports
Stockfeed: there are no feed mills in the province
Maize, for the poultry industry
Day-old-chicks from other provinces
Fresh fruit and vegetables, mostly from Java
Preserved/canned foods
All packaging material
Cattle for local slaughtering
2.7 Agribusiness exports
Rice
Wood
Plywood
Rattan and rattan furniture
Crumb rubber
Coconut cake (Bungkill)
Copra
CPO for further refining (to Malaysia and Europe)
Frozen prawns/shrimp
Salted and sundried anchovies

3. South Kalimantan
3.1 Introduction
South Kalimantan is located on the south-east tip of Kalimantan and is the smallest of all
the provinces in Kalimantan, being only 37,000 square kilometres in area. Nevertheless, the
province has the highest population with 2.7 million people, who live mostly on the narrow
strip of alluvial land between the mountains and the swamps.

Over 85% of the population of the province are Banjarese and are thought to have
originated from South India when Muslim Sultanates were established. The Dutch
abolished the Muslim Sultanates and established direct rule in the 1860s.

Of the total area in the province 5% is designated as tidal swamp, 16% monotone swamp,
5% alluvial plain, 16% grassland and 58% forest.
3.2 Infrastructure
Roads connect the main towns in the province and there is an all-weather highway
connecting Banjarmasin, the capital of the province, with the bustling oil town of
Balikpapan in East Kalimantan. Banjarmasin is the centre for sawmill and plywood
factories, as it is on the Barito river which connects many parts of both South and Central
Kalimantan. Banjarmasin is connected by road to Palangka Raya, capital of Central
Kalimantan. Banjarmasin is the commercial centre for both South and Central Kalimantan.
The road uses a new bridge over the Barito river, but a ferry is still necessary across the
Kapuas river, and much of the road is still dirt.

The very large swamp and tidal swamp areas in the province make developing and
maintaining the road system difficult. The rivers have traditionally been used for moving
produce throughout the province.

41
The port of Banjarmasin is on the river and rather small but has cranes that can handle
containers. A new port on the eastern island of Pulau Laut is nearing completion. However
it takes 7 hours by road to travel to the new port from Banjarmasin.

There are daily flights to Jakarta and other provinces of Kalimantan but no direct
international flights.

Companies have established their own cool-storage facilities for export, mainly shrimp and
certain high-value fish products.

TRANSPORT TIMES

Banjarmasin to Jakarta By air 50 minutes

Banjarmasin to Balikpapan By air 45 minutes

Banjarmasin to Palangka Raya By air 35 minutes

Banjarmasin to Surabaya By sea 12 hours

Banjarmasin to Jakarta By sea 1.5 days

Banjarmasin to Palangka Raya By river 4 hours

Banjarmasin to Palangka Raya By road 5 hours

3.3 Agricultural production


The province has large tracts of acid peat soils and tidal swamp areas, and ambitious
projects to drain and cultivate these areas are unlikely to go ahead. The topsoil is very
shallow and many areas cannot be ploughed.

The province also has areas of cleared land that could be brought under cultivation. These
areas have been identified for transmigration settlement. Javanese and Balinese
transmigrants are very evident on the road to Palangka Raya, and grow most of the
province’s limited horticultural products. The average land holding per farmer is small,
being approximately 0.5 ha. The main food crops grown in the area are rice, peanuts,
soybeans and corn. Very few vegetables are grown and most are imported from Java. The
main fruit grown in the area are bananas, rambutan, durian and mandarins. The main
plantation crops are coffee, sugar, rubber and palm oil. There is a fragmented marketing
system in the area, which makes consistent supply of produce very difficult.

Some canning/processing facilities have been tried and have failed, due to the lack of a
consistent and continuous supply of raw materials.

The broiler industry has virtually ceased to operate recently, due to the currency crisis and
the cost of imported feed.

42
MAJOR FOOD CROPS

Crop Area ( ha) Production


(tonnes)
Rice 457.337 1,233,168

Maize 22,370 28,833

Cassava 13,419 182,794

Soybeans 9,212 11,895

Mungbeans 1,932 1,552

Peanuts 19,966 22,000

Source: Statistical Year Book of Indonesia 1996

MAJOR VEGETABLE CROPS


Crop Area (ha) Production (tonnes)

Sweet potatoes 2,561 23,031

Cucumber 2,282 5,093

Cabbage 7 93

Mustard greens 308 1,330

Tomato 328 914

Eggplant 1,144 3,056

Chilli 1,046 2,574

Shallots 6,443 32,248


Source: Statistical Year Book of Indonesia 1996

MAJOR FRUIT CROPS

Crop Area (ha) Production


(tonnes)
Avocado -- 24

Mango 1,066 4,369

Duku/Langsat 405 2,003

Durian 1,470 14,253

43
Mandarin 3,368 41,228

Papaya 149 7,510

Salak 37 206

Pineapple 42 1,255

Rambutan 5,112 25,734

Banana 6,214 17,036

Sapodilla 671 2,576

Rose apple 355 2,861

Source: Statistical Year Book of Indonesia 1996

MAJOR PLANTATION CROPS


Crop Area (ha) Production Comments
(tonnes)
Rubber 69,608 76,106

Coconuts 42,724 48,335

Palm oil 300 - Actual area believed to be around 20,000 ha,


mainly new plantings not yet producing.
Coffee 6,287 2,752

Cocoa 514 125

Clove 3,288 239

Sugar cane 6,810 239

44
Sago 1,484 12,097

Pepper 1,413 871

Source: Statistical Year Book of Indonesia 1996

LIVESTOCK

Animal Animal Production Comments


number slaughtered
(tonnes)
Milk cows 0 n.a.

Cattle 166,743 n.a.

Buffalo 47,636 n.a.

Horses 2,251 n.a.

Goats 71,882 n.a.

Sheep 4,345 n.a.

Pigs 11,075 n.a.

Village chickens 5,356,500 n.a.

Layers 661,700 n.a.

Broilers 6,020,000 n.a.

Ducks 3,116,300 n.a. Ducks and duck eggs are a major village
industry in the province
Source: Statistical Year Book of Indonesia 1996

FISHERIES SUB-SECTOR

Type of Fishery Production (tonnes)

Marine fisheries 79,372

Open water 65, 997

Brackish water 1,103

Freshwater ponds 301

45
Cages 490

Paddy field fish 50

Source: Statistical Year Book of Indonesia 1996

3.4 Current and potential agribusiness development


There are approximately 1,240 registered small food and beverage processors operating in
the province.
– Agribusiness growth has been around 2% annually for the last 5 years.
– State-owned plantations operate the rubber plantations in the area with some
smallholders also sending their materials to the crumb rubber factory. Ribbed Smoked
Sheet (RSS) is also made and exported to Surabaya.
– Large blocks of land (anything up to 500 ha) are unavailable for horticultural
production. The land ownership system and land use systems are complex. Smaller
areas of land are available, but many are either flooded during the wet season or have
very poor soils.
– Some investment is being made in cane sugar and tapioca processing.
– Old investments in coconut oil processing are under threat with the expansion of the oil
palm industry in the province. Investment in the oil palm industry is expanding.
3.5 Agroindustry - processing
Rice milling and polishing
Rice flour production
Rice wheat egg noodles
Tapioca products
Soybean products: soy sauce, tahu, tempe
Snack food production from corn, cassava
Prawn/fish crackers
Crumb and rubber sheet
Coconut oil extraction/refinery
Coffee processing (high quality Robusta)
Candle nut processing
Sugar refining
Cigarettes
Freshwater fish/shrimp ponds
Rattan mats and furniture
3.6 Agricultural imports
Stockfeed: there are no feed mills in the province
Maize, for the poultry industry
Day-old-chicks from other provinces
All packaging material
Many fruits and vegetables from Java
Cattle for local slaughtering
3.7 Agribusiness exports
Rice
Wood
Plywood
Rattan and Rattan furniture

46
Crumb rubber
Coconut cake (Bungkill)
Copra
CPO for further refining to Malaysia and Europe
Frozen prawns/shrimp
Salted and sundried anchovies

4. Central Kalimantan
4.1 Introduction
Central Kalimantan is a huge province covering 153,800 square kilometres, of which
126,200 square kilometres are still forested. The province has a population of less than 2
million.

The forestry and mining sectors dominate the province’s economic activity. Resources
include diamonds, manganese, bentonite, phosphate, sulphur, iron, asbestos as well as oil
and natural gas.
4.2 Infrastructure
The province is improving its infrastructure, but remains very difficult to travel around.
Rivers provide the main transport. The provincial capital Palangka Raya was until quite
recently only accessible by air or by river. During the 1997 fires, air access to the province
was suspended for many weeks due to smoke haze. The main road from Palangka Raya to
Banjarmasin is still under construction.

Access to markets and the movement of produce from the outlying areas are exceedingly
difficult.

The province has three export/import ports – Pulang Pisau, Sampit and Kumai – and six
river inter-island ports. Generally passenger ferries from Java terminate at Sampit and
Kumai. There are no cool-storage facilities at any of the ports.

The capital Palangka Raya can be reached by air from Jakarta, Banjarmasin, Pontianak and
Balikpapan. There are no direct international connections. The largest plane the airport of
Tjilik Riwut can accommodate is the Fokker 100.

The province has 39 diesel power stations but they are operating at capacity and new
stations will have to be brought on stream if the economy is to expand.

An industrial zone of Kakab/Kahayan-Kapuas-Barito has been established and a rail link to


a port with direct access to the sea is under consideration. There are also industrial zones at
Sampit and Kumai but these are very small and there is little activity there.

47
TRANSPORT TIMES

Palangka Raya to Jakarta By air 1 hour 45 minutes

Palangka Raya to Banjarmasin By air 35 minutes

Palangka Raya to Banjarmasin By river 4 hours

Palangka Raya to Banjarmasin By road 5 hours

4.3 Agricultural production


There is an environmentally and economically controversial project to convert one million
hectares of peat swamp for rice and sugar cultivation. Trials have proved disappointing, due
to fertility problems and the high cost of flushing out the acid sulphates occurring when the
peat soils dry out. The project, which began with the digging of drainage canals, will almost
certainly peter out as a result of the economic crisis. The fact that the project was known to
have strong support from former President Suharto, as well as its controversial nature, make
it very unlikely that it will receive support from the new government.

Agriculture is a minor activity in the province, the main food crops being rice and cassava,
and some corn, soybeans and sweet potato. The province is far from self-sufficient in food.

The main fruit grown in the area are bananas, rambutan, durian and orange, and some
pineapple in acid soils.

The main plantation crops are rubber, coconuts, cloves, coffee and palm oil. Some 46
companies are actively involved in the plantation industry and have planted some 390,000
ha.

MAJOR AGRICULTURAL CROPS

Crop Area ( ha) Production


(tonnes)

Rice 179,448 395,896

Maize 6,685 10,127

Cassava 4,983 56,025

Soybeans 7,053 6,824

48
Mungbeans 243 176

Peanuts 1,371 1,238

Source: Central Kalimantan in figures, 1996

MAJOR VEGETABLE CROPS

Crop Area (ha) Production


(tonnes)

Sweet potatoes 1,069 6,932

Water spinach n.a. 3,879

Cabbage 2,387 38,974

Mustard greens 2,265 20,200

Tomato 8,180 4,019

Eggplant 7,971 5,016

Chilli 16,473 5,711

Cucumber n.a. 5,744


Source: Central Kalimantan in figures 1996

MAJOR FRUIT CROPS

Crop Number of Production (tonnes)


trees/plant

Avocado n.a. 92

Mango n.a. 1,633

Duku/Langsat n.a. 4,423

Durian n.a. 22,860

Mandarin n.a. 2,843

Papaya n.a. 902

Pineapple n.a. 6,484

Cempedak n.a. 3,394

49
Rambutan n.a. 9,315

Banana n.a. 14,046

Sapodilla n.a. 902

Guava n.a. 1,388

Source: Central Kalimantan in figures, 1996

MAJOR PLANTATION CROPS


Crop Area ( ha) Production (tonnes) Comments

Rubber 272,373 120,979

Coconuts 48,586 35,489

Palm oil 89,910 29,790 Many new plantations yet to produce

Coffee 4,750 639

Cocoa 6,894 1,265

Pepper 2,770 359

Source: Central Kalimantan in figures, 1996

LIVESTOCK

Animal Animal Production


number slaughtered
(tonnes)
Milk cows 0

Cattle 49,146 9,697

Buffalo 9,734 346

Horses -

Goats 21,685 4,017

Sheep 2,002 74

Pigs 115,816 12,255

Village chickens 2,367,800 n.a.

50
Layers 51,100 n.a.

Broilers 1,780,000 n.a.

Ducks 280,212 n.a.

Source: Central Kalimantan in figures, 1996

FISHERIES SUB-SECTOR

Type of fishery Production


(tonnes)

Marine fisheries 50,542

Open water 42,265

Brackish water ----

Freshwater ponds 120

Cages 818

Paddy field fish ---

Source: Central Kalimantan in figures,1996

4.4 Current and potential agribusiness development


The province provides no statistics for the number of food processors operating there. The
number of processors is estimated to be fewer than 200.
– Rubber plantations in the area are state owned.
– There was some pineapple canning in the province, but these have closed down due to
the lack of raw materials. Local varieties of pineapple are virtually tasteless.
– Investment from Malaysia in the oil palm industry is continuing.
– Livestock production has been tried under Asian Development Bank loans using
Australian cattle but these proved to be unprofitable. Very few cattle remain of the
many thousands introduced into the area under ADB auspices.
– Timber, oil palm and mining dominate commercial activities in the province.
– Domestic investment in the rattan industry continues and approximately 7,000 tonnes
are worked per month.
4.5 Agroindustry - processing
Rice milling and polishing
Rice flour production
Rice noodles
Tapioca products
Soybean products: soy sauce, tahu, tempe
Snack food production from corn, cassava
Prawn/fish crackers
Coconut oil extraction

51
Coffee processing (Robusta)
Freshwater fish/shrimp ponds
4.6 Agricultural imports
Fresh fruit and vegetables
Fresh and processed food products
Cigarettes
Stock feed: there are no feed mills in the province
All packaging material
4.7 Agribusiness exports
Plywood
Wood mouldings
Crumb and RSS rubber
Frozen shrimp
Frozen fish
Pepper (white and black)
Rattan
Copra
Crude palm oil

52
Map 3 Sulawesi

(not available electronically – contact RIRDC to obtain a copy)

53
5. Sulawesi
5.1 Introduction
The island of Sulawesi, sometimes called the Celebes, or the Spice Islands in English
literature, is known for its very diverse agricultural topography. With its tremendously long
coastline, no point on the island is more than 90 kilometres away from the sea. The
seafaring people from Sulawesi established extensive trading networks from India to China
and the Middle East many hundreds of years ago. Makassars from South Sulawesi are
known to have traded with Aboriginals in northern Australia long before European
settlement.

The total landmass of Sulawesi is approximately 189,000 square kilometres, or slightly


smaller than Victoria. However, the number of narrow peninsulas and the mountainous
topography makes road travel between Sulawesi’s four provinces, and even within them,
unusually difficult.

Most of the island lies above 500 metres and 25% of the island is 1000 metres or more
above sea level. Sulawesi has 11 active volcanoes, compared to 17 on Java and 10 on
Sumatra. The climate is monsoonal. During September the north-westerly winds come
across the South China Sea to Sulawesi and by November, most of the island is
experiencing very heavy rain on the west coast. However, Central Sulawesi does not
experience these rains, as Kalimantan shelters it. The Palu Valley is the driest region in
Indonesia, with an annual rainfall of about 500mm.

By April the south-easterly winds have started to blow and this brings rain to the east coast
of the island, the wettest month being May. This has very important implications for
horticulture and agriculture on the island.

Sulawesi is known for its ethnic diversity. There are more than 35 distinct ethnic groups
and languages on the island. Over half the 13 million inhabitants of the island live on the
fertile coastal plains. Although the majority of the population is Muslim, there is a
substantial Christian population in the north. The number of churches of different
denominations in the capital of North Sulawesi, Manado, is striking.

The agricultural base of most of the island is estate crops: cocoa, coconuts, cashews, coffee,
tea and spices. With a few exceptions, all these are grown by smallholders. Rice is a major
crop, especially in South Sulawesi. Horticulture is limited, and is largely grown for the
local market and other parts of Eastern Indonesia. Some livestock (poultry and cattle) is
raised also for the local market, and for export to Kalimantan.

54
6. South Sulawesi
6.1 Introduction
South Sulawesi is known for its very rich lowland rice-producing areas as well as its
mountains and a very dry southern area. This is the only province in the country that uses
horses for ploughing wet rice or paddy fields.

There are four major ethnic groups. Probably the best known of these are the mountain
‘Toraja’ people with their distinctive houses and culture. More than three million Bugis live
along the coastal areas and fertile plains. Approximately one million Mandarese live along
the north-west coast of the province, and approximately two million Makassarese in the
southern part and around Ujung Pandang.

Ujung Pandang is the capital city of South Sulawesi, and the largest city in the eastern area
of Indonesia. It is the centre of trade, commerce and communications not only for the
province, but for the rest of Sulawesi and the islands further east to Irian Jaya.

The provincial economy has been growing at more than 8% per annum for the past 10
years. Before the economic crisis hit in August 1997, there was a very aggressive trend to
attract foreign investment and joint partners and to further develop the province. South
Sulawesi is by far the most economically dynamic and diversified of Sulawesi’s four
provinces. South Sulawesi is the biggest cocoa-producing province in Indonesia, and
buoyant world prices for cocoa have to some extent insulated the province from the
economic troubles Indonesia is now facing.

6.2 Infrastructure
There is an extensive system of all-weather roads. Ujung Pandang is the southern start to
the Trans-Sulawesi highway, which connects it with the most northern city, Manado, in
North Sulawesi. There is a very good sealed road linking Ujung Pandang with Tanah
Toraja, a major tourist centre and highland horticultural producing area for the province.

There are 8 airports, the most important being the international airport of Hasanuddin, some
30 kilometres from the centre of Ujung Pandang. Hasanuddin is the major transit point for
all flights from the western part to the eastern part of Indonesia.

There are 17 seaports in the province, with the main port (Makassar) in Ujung Pandang.
This port has recently had a multi million-dollar upgrade. It was modernised to handle all
types of cargo including container cargo and refrigerated containers.

There are more than 20 star-rated hotels in the city.

Telecommunications are excellent.

55
TRANSPORT TIMES

Ujung Pandang-Jakarta By air 2 hours 10 minutes

Ujung Pandang-Jakarta By sea 2 days

Ujung Pandang-Manado- By air 2.5 hours


Davao (Philippines)

Ujung Pandang-Singapore By air 2 hours

6.3 Agricultural production


South Sulawesi has diverse agricultural land, ranging from the rich paddy fields in the
Centre and South to hilly land suitable for horticultural production (Malino and Toraja
regions). Cocoa is grown by smallholders throughout the province, and plantings have
expanded significantly, due to high world prices. South Sulawesi is now the biggest cocoa
producing province in Indonesia. Coffee and tea are grown in the Toraja highlands and
marketed as a regional speciality, rather than as generic coffee and tea.

Some efforts have been made to establish cattle ranching operations in South Sulawesi,
because it has suitable climate and available land. Some Australian companies have been
interested in the potential, but no project has yet come to fruition.

MAJOR AGRICULTURAL CROPS

Crop Area (ha) Production (tonnes) Comments

Rice 857,988 4,055,399 includes both wet and dry land paddy

Maize 344,602 811,800

Cassava 53,808 714,462

Soybeans 61,266 100,771

Peanuts 77,742 110,501

Mungbeans 70,942 82,189


Source: South Sulawesi in Figures 1995

56
MAJOR VEGETABLE CROPS

Crop Area (ha) Production (tonnes)


Sweet potatoes 10,106 77,198

Potatoes 3,126 26,951


Cabbage 2,387 38,974
Mustard greens 2,265 20,200
Tomatoes 8,180 30,912
Eggplant 7,971 23,970
Chilli 16,473 48,347
Shallots 6,443 32,248
Source: South Sulawesi in Figures 1995

MAJOR FRUIT CROPS

Crop Number of Production


trees /plants (tonnes)

Banana 6,564,711 358,580

Papaya 449,232 21,749

Mango 1383,207 116,594

Passionfruit 2,247,255 38,824

Jack fruit 339,857 26,871

Durian 316,566 23,907

Watermelon 1,971 23,253

Grapes 234,147 6,092


Source: South Sulawesi in Figures 1995

57
MAJOR PLANTATION CROPS

Crop Area (ha) Production Comments


(tonnes)

Coconut 167,767 137,208

Clove 52,401 10,791

Coffee 71,295 26,500 Production includes 9,000 tonnes high quality


Arabica coffee for export

Cashew nut 65,246 19,396 Production figures in unopened nuts

Candle nut 43,931 18,941

Cocoa 131,194 95,857 Cocoa planting has increased sharply in recent


years due to buoyant world prices. South
Sulawesi is the largest cocoa-producing
province in Indonesia
Source: South Sulawesi in Figures 1995

LIVESTOCK

Animal Animal Production / Comments


number slaughtered
(tonnes)

Cattle 795,571 8,094

Buffalo 324,640 4,579

Horses 168,365 251

Sheep/Goats 459,927 85

Pigs 556,940 1,815 90 % in the Tanah Toraja district

Chickens 18,835,250 9,568

Ducks 2,277,025 1,009


Source: South Sulawesi in Figures 1995

58
FISHERIES SUB-SECTOR

Production (tonnes) Comments

Marine fisheries 246,800

Brackish water 81,000

Freshwater ponds 1,130

Paddy field fish 19,396

Source: South Sulawesi in Figures 1995

6.4 Current agribusiness development


– There are more than 71,000 small-scale industries and some 200 medium to large-scale
industries in the province.
– Some international companies are establishing processing facilities in the Ujung
Pandang industrial park; instant noodles, biscuits, fish canning and freezing, cashew
roasting etc.
– Cocoa production in the province has attracted the Mars group (Effem Foods) to
establish a cocoa butter and powder grinding facility in the province. A Singapore
biscuit company (Kong Guan) is also processing beans to butter and powder.
– A number of modern Java-based supermarkets and retail outlets have recently been
established in the province.
– Japanese investment is very active in the coffee industry in the Tanah Toraja area.
There are now several well-known brand names exporting from the area.
– Shrimp ponds have attracted both international and domestic investment but disease
problems and overstocking have led to a decline in production with some ponds being
converted to seaweed production.
– Several local companies have invested in mango production in the drier southern area
of the province.
– Several local companies have invested in the broiler industry in outlying districts of the
province.
– Singapore companies have invested in biscuit manufacture.
– Indofoods has established a factory producing instant noodles and other wheat
products. The wheat is imported from Australia and milled in Ujung Pandang.
– Both domestic and international investors have entered the seaweed market. The USA
interests are linked with the pet food industries that need the seaweed as a thickening
agent for their products.
– A number of commercial attempts have been made at ranching cattle in the undulating
plains and foot-hill areas of the province. None of the enterprises has been able to stay
in business for very long.
– There have been investments in the pearl shell industry by Japanese interests.
– The stock feed company Cargills has a warehouse in the Ujung Pandang Industrial Park
(KIMA).

59
6.5 Agroindustry - processing
Rice milling
Wheat flour milling
Rice flour milling
Rice and wheat noodles
Biscuit factories
Feed mills
Tapioca products
Soysauce, soybean, tahu, tempe
Snack food production from corn, potato, cassava
Prawn/fish crackers
Passion fruit bottling/juice pulp
Chilli sauce
Vegetable drying (small scale)
Coconut oil extraction/refinery
Coffee processing (Arabica and Robusta)
Cocoa butter and powder production
Vanilla curing
Cloves
Nutmeg processing
Candle nut processing
Cashew nut processing
Sugar refining
Cigarettes
Stock feed
Agar-Agar powder processing
Local cakes
Ice cream
Freshwater fish/shrimp ponds
Tea
Rosella
Cotton
Kapok
6.6 Major agricultural imports
Wheat from Australia
All packaging and packing materials
Day-old-chicks (from Java)
Fresh fruit: apples, pears, oranges
Live cattle (most from Java, some direct from Australia, although imports have stopped
since the economic crisis)
Poultry feed, from Java
6.7 Major agribusiness exports
Wheat germ
Vegetables (to Kalimantan/ Singapore)
Fresh shrimp/prawns
Fresh/frozen fish
Live crabs
Rattan
Sawn timber

60
Passionfruit (to Australia)
Cocoa to the USA (largest supplier to the USA)
Coffee (especially to Japan and USA)
Cashew nuts
Pepper
Rubber
Coconut cake
Copra
Rice

7. Central Sulawesi
7.1 Introduction
Central Sulawesi is a very mountainous province. Forest covers 64% of the land area. A
very large proportion of the province's income is derived from the export of timber, ebony
being one of the best-known timbers from the area.

The province has a very high daily rainfall pattern. However and seemingly contradictorily,
the driest region in Indonesia, the Palu valley, is also to be found in the province. The Palu
valley consists of approximately 1.6 million hectares and has a rainfall of approximately
500mm a year. Many seeing the area for the first time are surprised to see that prickly pear
is a serious problem in some areas.

The rainfall for the Palu valley is unpredictable, depending upon whether the rainfall is
from north-east or south-west monsoon winds. However, there is continuous rainfall on the
hills that surround the valley. As result of this high rainfall, irrigation is available on the
fertile valley floor, with the result that the Palu is the most agriculturally productive region
in Central Sulawesi.

The town of Palu has expanded only since World War II when the Japanese occupying
forces used the river flats for rice production to supply their troops. As the population has
moved south along the valley, the foothills have been cleared and planted with annual
crops, or used for livestock grazing. This has led to serious erosion in many areas and there
is now a government policy to stabilise the foothills of the valley and resettle the small
farmers who have moved into the foothills.
7.2 Infrastructure
An all-weather road connects Palu to the Trans-Sulawesi Highway, which joins Ujung
Pandang in the south with Manado in the north. There is a comprehensive system of other
roads that service all areas of the province. However, while the East Coast’s road system is
an all-weather road, the West Coast road to Toli Toli is in very poor condition in some
sections. Roads in the Palu valley are good.

The port of Donggala at the end of the Palu Bay has operated for hundreds of years. There
are no container facilities either at the newer port of Palu or Donggala

Palu has no international air links, but there are daily flights to Ujung Pandang and
connections to Jakarta, Kalimantan and Manado.

61
Palu is the commercial and trading centre for the province. However, the eastern ‘finger’
(the Luwuk peninsula) of the province is extremely isolated.

TRANSPORT TIMES

Palu to Ujung Pandang by air 1 ½ hours

Palu to Jakarta by sea 2 days

Palu to Balikpapan by air 1 hour

Palu to Balikpapan by sea 12 hours

Palu to Luwuk by road 388 km 2 days

Palu to Ujung Pandang by road 2-3 days

Palu to Manado by road 2-3 days

7.3 Agricultural production


– There are large areas of unused land in the area but much of this land is inside
designated forest areas.
– Irrigated rice is grown on the Palu valley floor. The rainfall in the surrounding
mountains flows naturally through some complex river systems to the Palu valley,
where there are extensive irrigation systems.
– Maize is grown extensively in the middle to upper regions of the Palu valley. White
maize is preferred for human consumption, while red maize is used for animal feed.
– Shallots are grown throughout the area and are said to be superior to any other grown in
Indonesia. The onions are fried crisp and packed in plastic boxes for export. This is the
region’s processed food speciality.
– Pulses, cassava, soybean, mungbean, peanuts and chillies are all grown.
– There are small areas of fruit production in the Palu Valley and foothills: grapes, guava,
mango as well as custard apple.
– There are very large ageing stands of coconuts throughout the wetter southern areas of
the Palu Valley.
– Small areas of high-quality coffee and green tea are grown in the South Palu area and in
Napu, some 3 hours by road from Palu.
– Tamarind is a tree that can withstand the very dry conditions of the Palu North area.
The products of the tree are in demand throughout the country.
– Cashew nut is another crop that is being planted throughout the drier parts of the
province.
– Kapok grows well in the area and has been a traditional crop. Prices for this commodity
have been stable over the past few years.
– Cocoa planting is expanding, due to strong world prices.
– Livestock cattle in the areas are a major industry but overstocking has led to serious
land degradation in the area.

62
MAJOR AGRICULTURAL CROPS

Crop Area (ha) Production


(tonnes)

Rice 158,874 513,006

Maize 19,029 25,925

Soybeans 6,866 8,744

Peanuts 7,210 6,307

Cassava 8,680 79,599

Mungbeans 1,085 817


Source: Central Sulawesi in Figures 1995

MAJOR VEGETABLE CROPS

Crop Area (ha) Production


(tonnes)

Chilli 1,029 3,961

Shallots 771 1,886

Mustard green 370 2,062

Sweet potato 4,187 27,729

Tomato 1,128 4,031

Cucumber 931 6,963

Eggplant 610 5,709

Shallots 1,000 2,650


Source: Central Sulawesi in Figures 1995

MAJOR FRUIT CROPS

Crop Area (ha) Production


(tonnes)

Orange 1,554 5,818

Banana 6,456 35,354

63
Pineapple 1,023 4,400

Papaya 5,555 24,846

Durian 839 5,387

Mango 1,127 4,351

Grapes 271 618

Jackfruit 1,029 5,818


Source: Central Sulawesi in Figures 1995

MAJOR PLANTATION CROPS

Crop Area (ha) Production Comments


(tonnes)

Coconut 169,212 159,296

Cocoa 39,376 16,487 All grown by smallholders

Coffee 18,896 4,267

Cashew nut 9,504 724

Clove 51,327 5,894 Drought has damaged much of the clove


production

Palm oil 14, 115 9,724

Rubber 3,746 1,711


Source: Central Sulawesi in Figures 1995

64
LIVESTOCK

Animal Animal Annual heads Comments


number slaughtered

Cattle 273,440 21,437

Buffalo 13,576 100

Horses 5,431 0

Goats 206,524 12,239

Sheep 11,154 805

Pigs 147,573 10,543

Chickens 3,734,737 5,425,937 Virtually all village chickens

Ducks 185,392 111,232


Source: Central Sulawesi in Figures 1995

FISHERIES SUB-SECTOR

Production (tonnes)

Marine fisheries 72,550

Brackish water 1,957

Freshwater ponds 1,085

Paddy field fish 5


Source: South Sulawesi in Figures 1995

7.4 Current agribusiness development


There are some 1,600 small-scale food and beverage processors and 170 medium to large
manufactures in the province.
– There is interest by local investors in investing in vegetable production, for supplying
the Kalimantan market.
– The Jakarta-based diversified agribusiness company Hasfarm has established arabica
coffee and a green tea plantation in the area, along with processing facilities, and also
has horticulture interests in the Palu valley.
– Hasfarm has also invested in a gherkin/cucumber production unit for the Japanese
market.
– Some small investment in plants processing coconut oil has been made to supply the
local market but in general copra is shipped to the other centres for processing.

65
– Local investors established a fried onion industry but have found difficulty in obtaining
continuous supply of onions for processing.
– There is little investment in the marine fishing industry in the area or in the processing
of fish. Fleets based in Bitung find it easier to land in Bitung Port (North Sulawesi)
what they have caught in Central Sulawesi waters. In some cases, the catch is landed
directly in the Philippines to avoid local imposts.
– Smallholder investment in cocoa production has increased markedly over the past few
years, due to strong world prices.
– Oil palm is now being planted in the province.

7.5 Agroindustry - processing


Rice milling and polishing
Rice flour production
Noodle production
Tapioca products
Fried onions
Soybean products, soy sauce, tahu, tempe
Snack food production from corn, potato and cassava
Frozen shrimp
Prawn/fish crackers
Coconut oil extraction
Coffee processing (high quality Arabica and Robusta)
Tea (green, semi-fermented)
Kapok

7.6 Major agricultural imports


Apples and oranges via Singapore/Ujung Pandang
Animal feed
Fertiliser

7.7 Major agribusiness exports


Ebony
Rattan
Cocoa beans
Live/salted fish
Frozen shrimp
Sea cucumber
Coconut oil
Copra
Coconut cake
Activated charcoal
Gherkins
Fried onions
Cattle (to Kalimantan)
Vegetables (to Kalimantan)
Coffee
Tea

66
8. North Sulawesi
8.1 Introduction
The province covers an area of 27,475 square kilometres and contains some of the most
fertile volcanic soils in Indonesia outside Java. The rain is abundant and falls throughout
the year, with the highest falls in November and December. Coconuts, nutmeg and, until
quite recently, cloves, were the basis of wealth in the area. North Sulawesi is among the 10
richest provinces in Indonesia.

The Dutch had established posts in the Minahasa area as early as the 1600s. However, it
was not until the early 1800s that the Dutch administration accompanied by missionaries
moved inland. The people of North Sulawesi quickly adopted Christianity and the area is
very strongly Christian, with many churches of different denominations co-existing with
Muslim communities. The Christian influence promoted the spread of education,
particularly in the Minahasa area, which for many years before independence had the
highest literacy rate in the country. The educational levels are still very high by national
standards.

The provincial population has doubled in recent times. The increase in population has led to
pressure on the available agricultural land and, as a result, more upland areas have been
placed under cultivation. This has led to significant increases in soil erosion.

The erosion is readily observed in the Gorontolo area, where Lake Limboto is rapidly
silting up. As in Central Sulawesi, the question of land ownership and use is very complex.
Agribusiness projects involving production, as opposed to processing, will need very
careful analysis and planning to ensure that the land can actually be used for the purposes
proposed.
8.2 Infrastructure
The expansion and maintenance of all-weather roads throughout the province are difficult
because of mountainous terrain. There are many small rivers in the steep ravines in the
area. This dissected topography makes travel difficult. Access to markets and the movement
of produce from the outlying areas are exceedingly difficult.

The port of Bitung, 45 minutes drive south of the capital Manado, is one of the best natural
harbours in eastern Indonesia. It has new container-handling facilities.

A new international airport at Manado is under construction. There are daily connections to
Singapore and Davao in the southern Philippines, as well as to domestic destinations (via
Ujung Pandang).

All fish processing factories have their own freezing facilities. There are cold- storage
facilities at the fishing dock at Bitung, together with an ice making and flaking facility.

67
TRANSPORT TIMES

Manado to Ujung Pandang by air 1.5 hours

Manado to Jakarta by air (via Ujung Pandang) 4 hours

Manado to Jakarta by sea 3 days

Manado to Ujung Pandang by road 5 days

Manado to Palu by air 1.5 hours

Manado to Davao by air 1 hour


(Philippines)

8.3 Agricultural production


– Land prices have risen sharply in the Manado area but are still cheap compared to land
prices on Java. The province has virtually no flat land that is not already under
cultivation. Some land on the slopes is available for cultivation but these slopes are
rapidly eroding. The average land holding per farmers is small, approximately 0.5 ha.
– Large blocks of land are not available for horticultural production. The land titling
system makes ownership of land by investors, or use for a certain period, difficult to
obtain. The only available land is often on steep slopes and would be very expensive to
develop and work profitably.
– The main food crops grown in the area are rice, peanuts, soybeans, corn, and a variety
of vegetables including, onion, carrots, cauliflower, cabbage, asparagus, broccoli,
potatoes and tomatoes.
– The main fruit grown in the area are bananas, rambutan, durian, oranges, avocado and
passionfruit.
– The main plantation crops are vanilla, cloves, nutmeg and coffee. For hundreds of years
the islands off Sulawesi were the only source of cloves, but cloves are now grown on
Sulawesi as well, including North Sulawesi. The province is one of the largest vanilla
and nutmeg producers in the world. The fragmented marketing systems in the area
make the consistent supply of reliable quantity of produce for processing very difficult.
– Some fish canning processing facilities in Bitung have failed, due to the lack of a
consistent and continuous supply of raw materials. Two facilities are still operating but
well below the installed capacity of the factories. A large Jakarta-based fishery
company (Djayanti Group) has a major facility at Bitung, including its own boats, ice
plant and fish processing plant.
– Coconuts are a major commodity in North Sulawesi, all grown by smallholders.
However, coconut oil processing facilities at Bitung and Manado have declined, due to
problems with raw material supplies.

68
MAJOR AGRICULTURAL CROPS

Crop Area (ha) Production


(tonnes)

Rice 109,042 414,414

Maize 79,745 164,431

Soybeans 30,745 37,643

Peanuts 8,045 8,004

Cassava 4,745 50,375

Mungbeans 2,337 2,150

Sweet potatoes 3,123 23,216


Source: North Sulawesi in Figures 1995

MAJOR VEGETABLE CROPS

Crop Area (ha) Production (tonnes) Comments

Not 36,569 231,072 No specific crop data are available for


specified the province, only the total as shown.
Source: North Sulawesi in Figures 1995

MAJOR FRUIT CROPS

Crop No of trees Production Comments


(tonnes)

Not 3,016,908 406,391 As above


specified
Source: North Sulawesi in figures 1995

69
MAJOR PLANTATION CROPS

Crop Area (ha) Production Comments


(tonnes)

Coconut 284,805 290,294

Clove 43,485 10,990

Nutmeg 15,836 7,390

Coffee 7,746 4,200

Cocoa 8,747 1,405

Vanilla 5,254 6,599 production estimated from export values


Source: North Sulawesi in Figures 1995

LIVESTOCK

Animal Animal Annual heads


number slaughtered

Cattle 266,865 n.a.

Buffalo 4,918 n.a.

Horses 36,529 n.a.

Goat 100,655 n.a.

Pigs 555,641 n.a.

Chickens 4,347,235 n.a.

Ducks 393,791 n.a.


Source: North Sulawesi in Figures 1995

FISHERIES SUB-SECTOR

Production Comments
(tonnes)

Marine fisheries 111,260 Thought to be underestimated as much of the


catch is landed offshore in the Philippines and
Thailand

70
Brackish water 3,406

Freshwater ponds 1,340

Seaweed 7,546
Source: Bappeda North Sulawesi –1995

8.4 Current and potential agribusiness development


There are approximately 22,000 registered small food and beverage processors operating in
the province. There are some 36 medium- and large-scale food processors.
– There has been investment in desiccated coconut production recently, mainly for the
European markets.
– There has been considerable investment in the tuna canning industry around the port of
Bitung.
– There is investment in the collection and curing of vanilla.
– Local companies are active in the collection and export of nutmeg.
– The province, and particularly the towns of Manado and Bitung, are well placed to take
advantage of the sub-regional growth triangle (BIMP-EAGA) operating between
Brunei, parts of Sulawesi, and Kalimantan, eastern Malaysia and southern Philippines.
However, each area produces similar products and is essentially competitive, rather
than complementary, with the rest of BIMP-EAGA. Hence there are limited
opportunities in the agribusiness sector within BIMP-EAGA at present.
– Because tourism and, to a lesser extent, mining, bring substantial numbers of
expatriates to North Sulawesi, there are some opportunities to supply imports to the
supermarkets of the province through a strong Jakarta-based distributor. The presence
of non-Indonesian consumers means that the rupiah devaluation is a less serious
problem for importers than would otherwise be the case.
8.5 Agroindustry - processing
Fish canning
Rice milling and polishing
Rice flour production
Biscuit factories
Tapioca products
Soybean products, soy sauce, tahu, tempe
Snack food production from corn, potato, cassava
Prawn/fish cracker
Coconut oil extraction/refinery
Coffee processing (high quality Arabica and Robusta)
Vanilla
Nutmeg oil process
Stock feed
Seaweed drying
Agar-Agar powder processing
Local cakes

71
Leather tanning
Freshwater fish/shrimp ponds
Tea (fermented, semi-fermented, green)
8.6 Major agricultural imports
Sugar
Fertiliser
Day-old-chicks from other provinces
All packaging material
Tin-plate (for fish canning)
8.7 Major agribusiness exports
Copra
Coconut oil
Coconut cake
Activated charcoal
Sawn wood
Desiccated coconut
Nutmeg
Mace
Vanilla
Cloves
Frozen and canned fish
Frozen shrimp
Seaweed

9. South-east Sulawesi
9.1 Introduction
A small province of some 148,140 kilometres, South-east Sulawesi is hilly rather than
mountainous. 85 percent of the land mass falls into this category and only 15% of the land
area is regarded as lowland plains suitable for agricultural development.

The province has abundant rainfall of more than 2,000mm on average a year. Most of the
rain falls between the months of November and March, with light rains between March and
June, after which a very pronounced dry season is experienced. This very pronounced dry
season makes the area suitable for cashew nut production.
9.2 Infrastructure
Transport to and from the province remains difficult. There is only one flight a day via
Ujung Pandang into the airport of Walter Monginsidi in the capital Kendari. Getting seats
can be very difficult. There are no international flights and no direct flights to Jakarta.

The Trans-Sulawesi highway to connect Kendari is still being completed; for all practical
purposes South East Sulawesi is not connected by road to the other provinces. There is a
comprehensive system of roads servicing all areas within the province. However, many
roads are not sealed and travel in the wet season is difficult.

The electrical power supply is just sufficient to supply the current needs of the province.

72
There are five ports in the province. The main port of Kendari is quite large but rather
shallow and the approach channels very narrow so that large ships have difficulty in
accessing the docks. There are cold-storage facilities at the port of Semudra (part of the
port of Kendari) but these are only for shrimp and seafood. There are no container facilities
at any port in the province and ships must be equipped to unload containers.

Ujung Pandang may be reached by ferry from Kendari, which first goes to Bau Bau on
Muna Island. The journey takes a day. A ferry travels from Kolaka to Watampone (Bone)
in South Sulawesi several times a day. The road journey from Kendari to Kolaka takes
some 3–4 hours in dry weather. The ferry trip takes about 8 hours.

TRANSPORT TIMES

Kendari to Ujung Pandang by air 1 hour

Kendari to Jakarta by air 4 hours (via Ujung Pandang)

Kendari to Ujung Pandang by sea direct 1 day

Kendari to Kolaka by road 3–5 hours


9.3 Agricultural production
There are large tracts of unused land and cleared forest land in the area but the soils are not
very fertile and gaining title to the land is very difficult. The rampant spread of blade grass
(Alang Alang) is a major problem for all agricultural production in the province. The soils
are essentially podsolic and in general rather poor.
– Mainly transmigrants grow irrigated rice on the flat and fertile areas. Maize and cassava
are grown extensively in all areas of the province, as are pulses, soybean, mungbean,
peanuts and chillies.
– There are very small areas of fruit production, mango, durian and banana being the
principal fruit grown. The area has the potential for pineapple production but this is yet
to be realised.
– Cocoa is a major agricultural earner for the province with approximately 40,000 tonnes
being produced annually.
– Cashew nut is a major crop in the area but recent unseasonal rains at the time of
flowering have disrupted production.
– Coconuts are still an important crop, with some 35,000 tonnes of copra being produced
annually.
– Cattle are a major industry in the area, especially in the south-western part of the
province. The cattle are smallholder-owned Balinese cattle.
– Poultry production is a purely village-based industry.
– The marine fish industry is large, with 130,000 tonnes being caught annually. This is
thought to be well below the sustainable catch levels.

73
MAJOR AGRICULTURAL CROPS

Crop Area (ha) Production (tonnes)

Rice 90,800 287,355

Maize 39,344 79,858

Soybeans 7,207 8,744

Peanuts 5,843 3,927

Cassava 15,429 177,828

Mungbeans 1,573 1,175


Source: South-east Sulawesi in Figures 1995

MAJOR VEGETABLE CROPS

Crop Area (ha) Production


(tonnes)

Chilli n.a. 1,047

Spring onion n.a. 0.5

Mustard green n.a. 4

Sweet potato n.a. 12,947

Tomato n.a. 1,711

Cucumber n.a. 1,288

Eggplant n.a. 2,078


Source: South-east Sulawesi in Figures 1995

MAJOR FRUIT CROPS

Crop Area (ha) Production Comments


(tonnes)

Orange 1,554 4,603

Banana 6,456 22,800

Pineapple 1,023 n.a. Home garden production

74
Papaya 5,555 2,733

Durian 839 n.a.

Mango 1,127 4,612

Grapes 271 n.a.

Jackfruit 1,029 n.a.


Source: South-east Sulawesi in Figures 1995

MAJOR PLANTATION CROPS

Crop Area (ha) Production (tonnes) Comments

Coconut n.a. 32,567

Cocoa n.a. 41,134 Transported to Ujung Pandang for


export

Coffee n.a. 2,837

Cashew nut n.a. 18,253 32,000 tonnes annual averaged over


past five years

Clove n.a. 2,998


Source: South-east Sulawesi in Figures 1995

LIVESTOCK

Animal Animal number Annual heads slaughter Comments

Cattle 265,136 16,942

Buffalo 11,639 1,114

Horses 5,865 n.a.

Goats 99,671 36,204

Sheep 257 n.a.

Pigs 14,021 6,778

Chickens 5,719,726 7,465,547 95% village chickens

Ducks 230,928 130,807


Source: South-east Sulawesi in Figures 1995

75
FISHERIES SUB-SECTOR

Production (tonnes)
Marine fisheries 133,680
Brackish water 6,772

Freshwater ponds 698

Paddy field fish n.a.


Source: South-east Sulawesi in Figures 1995

9.4 Current agribusiness development


There are some 1,300 small-scale agricultural and food processing facilities in the province.

− The Djayanti group has invested in marine fishing and has established its own fleet
and cold-storage facilities.
− There is little interest in investing in low-value vegetable production, because the
returns are better in plantation crops, and because the local market is very small.
Freight to bigger, but distant, markets is expensive.
− There were some investments in cashew nut processing. However, these factories
closed in 1994.
− Local investors are establishing mango, sugar cane and oil palm plantations. A
Jakarta-based company was building a sugar mill, as at September 1997, but it is
not known whether this has been completed. Investors have been targeting the
province for sugar cane production and some initial planting has taken place.
− There is insufficient excess of any agricultural product to establish profitable
processing industries within the province, given the transport costs and difficult
access to markets.
− Japanese investors have established two cultured pearl operations.
− The Jakarta-based agribusiness firm Hasfarm is planting cocoa on 6000 ha; as at
September 1997, it was considering raising livestock and developing horticulture on
other land the company owns, but these plans may have been suspended by the
liquidity and credit problems now faced by most Indonesian businesses.
9.5 Agroindustry - processing
Rice milling and polishing
Rice flour production
Rice - egg noodles
Tapioca products
Soybean products, soy sauce, tahu, tempe
Snack food production from corn, potato, cassava
Prawn/fish crackers
Coconut oil extraction (local small-scale)
Freshwater fish/shrimp ponds
Kapok

76
9.6 Major agricultural imports
Animal feed from other provinces
Fertiliser
9.7 Major agribusiness exports
Frozen fish (many species)
Frozen shrimp
Cultured pearls
Sawn timber
Rattan
Cocoa beans
Live/salted fish
Copra

77
Annex 2: List of persons interviewed
during field trips (August/
September 1997, February 1998)
CENTRAL SULAWESI Jl. Tg. Pesik no. 38
Palu
H. Moch. Amin Badawi Central Sulawesi
Managing Director Ph: 62-451-27688-22971
Saridewi Group
Jl. Kunduri no. 9 H. Syamsuddin M. Said
Palu 94223 Executive Secretary
Central Sulawesi Central Sulawesi Chamber of Commerce and
Ph: 62-451-27274 – 52663 – 24822 Industry
Fax: 62-451-24822 Jl. Sulawesi No 39
Palu
Ruddy Chandra Central Sulawesi
Director Ph: 62-451-22971-21929
Central Sulawesi Chamber of Commerce and Fax: 62-451-23373
Industry
Jl. Sulawesi no. 39 Ir. Abd. Rauf Toramai
Palu Head of Economic Division of Regional
Central Sulawesi Development Planning Board (BAPPEDA)
Ph: 62-541-2724, 22971 Jl Prof. Moh.Yamin
Fax: 62-541-23373 Palu 94112
Central Sulawesi
Ruben Kadang Ph: 62-451-55431
Secretary NORTH S
Indonesian Supplier & Distributor Association NORTH SULAWESI
Jl. Setia Budi No. 38
Palu 94111 John Honandar BSc.
Central Sulawesi Director
Ph: 62-451-54540, 22326 P.T. Multi Food (biscuits, crackers, spices)
Fax: 62-451-23540 Jl. Pingkan Matindas No.57
Manado 95127
Yonathan Masiki North Sulawesi
Commissioner Ph: 62-431-64053, 64341
PT. Gimpu Jaya Coklat Perkebunan Cocoa Fax: 62-431-63450
Plantations
Jl. Tanjung Lombongan No. 2 Drs. E. Ch. Kalesaran
Lolu – Palu 94112 Department of Industry and Trade for North
Central Sulawesi Sulawesi
Ph: 62-451-21886 Jl. Tololiu Supit 25
Manado 95119
Zakir Muhammad, SE North Sulawesi
Head of Finance and Banking Department Ph: 62-431-851 756, 862 289
Central Sulawesi Chamber of Commerce and Fax: 62-431-851 423
Industry
Jl. Sulawesi no. 39 Idrus Mamonto
Palu Department of Industry and Trade, Regional
Central Sulawesi Office North Sulawesi
Ph: 62-451-219 Jl. Tololiu Supit 25
Manado 95119
Arthur Pangemanan North Sulawesi
Head of the Division of Agriculture Ph 62-431-862 289, 851 756
Agribusiness and Transmigration

78
Stevanus Prasethio Danny Danuarsyah
PT Bimoli (coconut oil processing) Branch Manager
Jl. A. Yani no. 9 PT. Indofood Sukses Makmur
Manado 95114 Jl. Kima X Kav. A-3
North Sulawesi Biringkanaya
Ph: 62-431-866 202 Ujung Pandang
Fax: 62-431-868 064 South Sulawesi
Ph: 62-411-510 206-7, 510 876
Aldie Senduk, SS Fax: 62-411-510 027
Supervisor
P.T. Matahari Putra Prima (supermarket and Dra. Jawahir Djalani
department store) CV. Laketek, Construction Contractor and
MDS Boulevard Centre Supplier
Jl. Sam Ratulangi no. 22A Jl. Sultan Dg. Raja no. 47
Manado 95111 Ujung Pandang 90152
North Sulawesi South Sulawesi
Ph: 62-431-868 510, 868 512 Ph: 62-411-452 455
Fax: 62-431-868 511 Fax: 62-411-451 335
SOUTH SU
Dr. Djafar Baco Dr. Ir. Djamaluddin. MS, APU
Director/Entomologist Agronomist
Research Institute for Maize and Other Cereals Research Institute for Maize and Other Cereals
Jln. Ratulangi Maros 90514 Jl. Dr. Ratulangi
P.O Box 1173 Ujung Pandang Maros 90514
South Sulawesi Ujung Pandang
Ph: 62-411-371 016, 371 529 South Sulawesi
Fax: 62-411-318 148 Ph: 62-411-371 529/ 371 016
Fax: 62-411-371 961
H. Abd. Muis Bakkidu
President Director H.M. Syarifuddin Husain
Makassar Industrial Estate (PT KIMA) Vice-President Director
Jl. Perintis Kemerdekaan Km.15 Daya Bosowa Group
Ujung Pandang Jl. Urip Sumoharjo no. 188
South Sulawesi Ujung Pandang 90232
Ph: 62-411-510 086, 510 158 South Sulawesi
Fax: 62-411-510 098 Ph: 62-411-444 444
Fax: 62-411 447-744
Ir. Hamzah Barlian, MS
Vice-Manager Husain Ibrahim
ACRI-Askindo CPB Extantion Project Executive Secretary
ASKINDO – Association of Indonesia Cocoa South Sulawesi Chamber of Commerce
Producers Jl. Jend. A. Yani no. 23
Jln. Rusa 45 B Ujung Pandang
Ujung Pandang South Sulawesi
South Sulawesi Ph: 62-411-321 704
Ph: 62-411-873 644 Fax: 62-411-326 553
Fax: 62-411-856 230
Noel Janetski
Prof. Drs. H. Burhamzah, MBA President Director
Professor of Economics at Hasanuddin University PT. Effem Indonesia (subsidiary of Mars Foods)
and Managing Director Jl. Kima 10 KAV. A6 Daya
PT. Sarana Sulsel Ventura Ujung Pandang
Jl. Panakkukang Boulevard no. 12A-B South Sulawesi
Ujung Pandang 90222 Ph: 62-411-515 702
South Sulawesi Fax: 62-411-515 704
Ph: 62-411-447 989
Fax: 62-411-447 990

79
Drs. Hamka B. Kady MS Ujung Pandang
Village Cooperative Leader South Sulawesi
Jl. Kakatua no. 51 Ph: 62-411-453 486
Ujung Pandang Fax: 62-411-452 816
South Sulawesi
Ph: 62-411-873 657, 850 498 H. Baharuddin Sellang
Fax: 62-411-850 602 Commercial Director
PT. Industri Kapal Indonesia (ship building)
Matsui Kazuhisa Jl. Galangan Kapal
Japan International Co-operation Agency Ujung Pandang 90211
JICA-Bappenas Project on Policy and South Sulawesi
Implementation Support Ph: 62-411-448 653, 448 654
for the Development of East Indonesia Fax: 62-411-448 658
C/- BAPPEDA
Jl. Urip Sumoharjo no. 269 Ir. H. Tommy Y. Simanungkalit
Ujung Pandang 90231 General Manager
South Sulawesi PT. Citra Sekarwangi Agro Persada (cashew
Ph/Fax: 62-411-452 816 processing)
Jl. Kima 7 Kav R-2A
H. Muchtar Nurlim, Se.Msi KIMA Industrial Estate
Head Planning and Promotions Section Ujung Pandang 90241
Investment Coordinating Board South Sulawesi
Jl. Ribura’ne no. 15 Ph: 62-411-510 864, 511 874
Ujung Pandang 90174 Fax: 62-411-510 865
South Sulawesi
Ph: 62-411-316 042, 320 371 HM. Rudhy Syahruddin, MBA
Fax: 62-411-320 371 Director
Kalla Shipping Lines
Cornelis P. Patty Jl. Nusantara no. 444
PT. Aneka Bumi Kencana (cocoa trader), Ujung Pandang
subsidiary of Prasidha Group South Sulawesi
Jl. Prof. Dr Ir. Sutami no. 28 Ph: 62-411-320 464, 320 465
Ujung Pandang Fax: 62-411-320 465
South Sulawesi
Ph: 62-411-514 618 Ir. Muchtar Tanong
Fax: 62-411-512 878 Corporate Representative
Widya Corporation, General Contracting
Prasetyo Jl. Lasinrang no. 61
Store General Manager Ujung Pandang 90113
Goro (multigrocer and supermarket) South Sulawesi
Jl. Panakkukang 111 Blok E 19/1 Ph: 62-411-852 938, 852 939
Ujung Pandang Fax: 62-411-871 507
South Sulawesi
Ph: 62-411-867 670, 861 839 Christian Tansil
Fax: 62-411-861 838 Managing Director
P.T. South Suco, Frozen Fish and Prawns
Syamsul Rijal Jl. Kima VI KAP G4 B
Finance Manager KIMA Industrial Estate
PT. Duta Sulawesi Agro (palm oil) Ujung Pandang
Jl. Hos. Cokroaminoto 27 South Sulawesi
Ujung Pandang 90174 Ph: 62-411-510 201, 510 215
South Sulawesi Fax: 62-411-510 049
Ph: 62-411-311 111
Fax: 62-411-311 112

Dr. S. Ruslan
Vice-Chairman
Regional Development Planning Board
(BAPPEDA)
Jl. Urip Sumoharjo no. 269

80
Arifuddin Temmi Ir. Yusuf Yakub, M. Ed
Managing Director Head
PT. Dataran Bosowa, Frozen Shrimp Industries Provincial Office of Department of Agriculture
BSW Group Jalan Balai Kota No. 6
Jl. Urip Sumoharjo no. 188 Kendari 9311
Ujung Pandang South-east Sulawesi
South Sulawesi Ph: 62-401-21365, 22733
Ph: 62-411-444 444
Fax: 62-411-447 744 CENTRAL KALIMANTAN

H.M. Thaif M Drs. Radiansyah Djanit


Director Executive Secretary
PT. Bosowa Cocoa Industries Central Kalimantan Chamber of Commerce and
BSW Group Industry
Jl. Urip Sumoharjo no. 188 Batang Garing Business Centre
Ujung Pandang Jl. Letjen D.I. Panjaitan 1
South Sulawesi Palangka Raya 73111
Ph: 62-411-444 444 Central Kalimantan
Fax: 62-411-447 744 Ph: 62-536-25308
SSULAWESI
SOUTH-EAST SULAWESI H.M. Hartani Mukti
Private citizen with business interests in Central
Drs. Ibrahim Pallatje Kalimantan
Chairman Jl. Dempo I No. 36
Regional Investment Coordinating Board of Kebayoran Baru
South-east Sulawesi Jakarta 12120
Jl. Pembangunan no. 40 Ph: 62-21-771 664, 711 668
Kendari 93124 Fax: 62-21-720 1635
South-east Sulawesi
Ph: 62-401-23269 EAST KALIMANTAN
Fax: 62-401-23267
Pascal C. Arnaud
Drs Laode Abdul Rajab Catering and Associated Services
Office of South-east Sulawesi BKPMD (Regional Pt. Prasmanindo Boga Utama
Investment Coordinating Board) Jl. Jenderal Sudirman 45A
Jl. Pembangunan no 40 Balikpapan 76114
Kendari East Kalimantan
South-east Sulawesi Ph: 62-542-66044, 61058
Ph: 62-401-23268 Fax: 62-542-66422
Fax: 62-401-23267
Drs. H. Abd. Rachim Asmaran
Prof. Dr. H. La Ode Abdul Rauf, M.Sc Head of Agency
Head Regional Development Planning Board BAPPEDA (Board of Regional Development
(BAPPEDA) Planning)
Jl.Taman Surapati no. 2 Jl. Jend. Sudirman 01
Kendari Balikpapan
South-east Sulawesi East Kalimantan
Ph: 62-401-21843 Ph: 62-542-22515, 21142
Fax: 62-542-21142
H. Surunuddin BE
President Tony J. Cooper
South East Sulawesi Chamber of Commerce and Area Manager
Industry Pt. AlatieF Jasakarya Corporation (Catering
Jl. Y. Wayong No 4 Services)
Kendari Jl. Jend. Sudirman No 806
South-east Sulawesi Balikpapan
Ph: 62-401-22620 East Kalimantan
Fax: 62-401-23167 Ph: 62-542-62816, 63474, 63463
Fax: 62-542-63169

81
Garry Kielenstyn Banjarmasin
Area Manager South Sulawesi
Petrosea Engineering, Construction and Mining Ph: 62-511-52075, 55404
Jl. Jend Sudirman no. 561 Fax: 62-511-55404
Balikpapan 76114
East Kalimantan H.Yusufhasan E. Tayibnapis
Ph: 62-542-61055 Secretary
Fax: 62-542-63951 South Kalimantan Chamber of Commerce and
Industry
SOUTH KALIMANTAN Jl. Katamso. 17-25, 2nd Floor
Banjarmasin 70111
Drs. Ec. H. Gusti Mahfudz South Kalimantan
Assistant Head Ph: 62-511-52075, 55404
Economics Faculty
University Lambung Mangkurat Jimmy Y
Jl. Brigjen H. Hasan Basry Plant Manager
Banjarmasin Pt. Ebi Mas, Dried Marine Products
South Sulawesi Tembus Mantuil no. 28
Ph/Fax: 62-511-52116 Banjarmasin 70246
South Kalimantan
Rawintan E. Binti Ph: 62-511-51016
Economics Faculty Fax: 62-511-363 618
Universitas Lambung Mangkurat
Jl. Brig. Jend. Hasan Basry WEST KALIMANTAN
Kayu Tangi WEST KALIMANTAN
Banjarmasin 70123 Satoko Emoto
South Kalimantan Agriculture and Agroindustry Expert
Ph/Fax: 62-511-52116 BAPPENAS-JICA Development Study on
Comprehensive Regional Development for
H. Syamsuri Darham Western Kalimantan
Chairman Jl. Selayar No 45
Indonesian Suppliers and Distributors Association Pontianak 78121
“Djok Mentaya” PWI Bldg, 4th Floor West Kalimantan
No. 1, Syari’ie Musaffa, SH Street Ph/Fax: 62-561-44881
Banjarmasin
South Kalimantan Ir. H. Zeinudin Gairach
Ph: 62-511-360 990 Department Head
Fax: 62-511-58104 Department of Livestock
Jl. Adisucipto no. 48
Ir. Muchlis Luthfi Pontianak 78121
Managing Director West Kalimantan
Pt. Asri Lestari, Furniture Industries Ph: 62-561-36144
Jl.P. Suriansyah No 20, Fax: 62-561-36144
Banjarbaru
South Kalimantan Imbran Susanto
Ph: 62-511-92359, 93247 Director
Fax: 62-511-92359 Alas Kusuma Group (oil palm plantations)
Jl. Adisucipto KM.5, 3 Sei Raya
Drs. Suryani MA Pontianak
Economics Faculty West Kalimantan
Universitas Lambung Mangkurat Ph: 62-561-21866
Jl. Brigjen H. Hasan Basry Fax: 62-561-21583
Banjarmasin 70123
South Kalimantan
Ph/Fax: 62-511-52116

Syarifuddin
Head, Administration South Kalimantan Chamber
of Commerce and Industry
17-25 Jl. Brig. Jend. Katamso

82
Pramono Hadhie Effendy Syahrir
Indonesian Agribusiness Association, West Pt. Esra Ariyasa Utama
Kalimantan Branch Jl. A. Yani no 22
Jl. Ketapang 152 Pontianak
Pontianak 78122 West Kalimantan
West Kalimantan Ph: 62-561-32143
Ph: 62-561-37357 Fax: 62-561-44264
Fax: 62-561-42628
Rudy Syamsuddin
Darius Na Manager
Vice-General Manager PT. Ligo Mitra Supermarket & Department Store
Benua Indah Group (Plantation Division) Jln. Gajah Mada No 77
Jl. Teuku Umar 19, 1st Floor Pontianak
Pontianak West Kalimantan
West Kalimantan Ph: 62-561-37382, 38474
Ph: 62-561-38550 (Hunting) Fax: 62-561-36253
Fax: 62-561-38656

Affan Nasution JAKARTA


President, West Kalimantan Chamber of
Commerce Ir. M. Asy’ari Akbar
President Director Director
Pt. Tri Haafco Pratama, General Contracting PT. Panguji Luhur Utama
MPI Building Jl. Spg VII No. 12
Jl. Zainudin 17 Lubang Buaya
Pontianak Jakarta 13810
West Kalimantan Indonesia
Ph: 62-561-36212, 32159 Ph: 62-21-841 3768
Fax: 62-561-33159 Fax: 62-21-841 3768

Ir. H. Pedi Natasuwarna MSc. Ir. Sapto Hadi


Managing Director General Manager
Mega Tania Group (oil palm plantations) Pt. Griya Senturi Asri
Jl. Gajah Mada No 96 Jl Sultan Hasanuddin No. 6
Pontianak Jakarta 12160
West Kalimantan Ph: 62-21-720 3484, 725 2325
Ph: 62-561-40142, 40148 Fax: 62-21-720 3487
Fax: 62-561-41766
Jimmy Handoko
Drs.Tribowo. K. Soebiandono, MBA Director
Managing Director Pt Dharmala Agrifood Tbk
Pt. Mitra Palma Kalbar (oil palm plantations) Wisma Dharmala Sakti, 20th Fl.
Jl. Tanjung Pura, Komplek Tanjung Pura Indah Jl. Jenderal Sudirman 32
Blok C No. 9 – 10 Jakarta 10220
Pontianak 78117 Ph: 62-21-251 0688-89
West Kalimantan Fax: 62-21-251 0685
Ph: 62-561-32910, 37291,
Fax: 62-561-33683 Achmad Kuntjoro
Corporate Director – Finance
Ir. Toyib Sutopo Kalimanis Group (pulp, plywood, palm oil
Production Supervisor, Breeding Farm plantation)
Pr. Cipta Khatulistiwa Mandiri Farm (Charoen 6th Fl, Wisma Kalimanis
Pokphand Group) Jl. Let. Jen. Haryono MT. Kav 33
Ds. Ambalau Jakarta 12770
Kel. Anjungan Melancar Ph: 62-21-798 5929
Km. 62 Kec. Sei Pinyuh Fax: 62-21-798 5894
West Kalimantan
Ph: 62-561-92777

83
Teddy Suratmadji Ir. Emil Harda, MM
Production & Environment Director (pulp and Operations Manager
plywood) Hasfarm International Corporation
Kiani Kertas, of Kalimanis Group Jl. Cipaku I No. 13
Wisma Kalimanis 4th Floor Kebayoran Baru
Jl. M.T. Haryono Kav. 33 Jakarta South 12170
Jakarta 12770 Ph: 62-21-722 1974, 725 7578
Ph: 62-21-798 6065, 66 Fax: 62-21-722 1977
Fax: 62-21-798 6036
Ir. Syech A. Moolfar
Mr. Mike McEvoy Managing Director
Senior consultant, Livestock Directorate, Hasfarm Plantations
Department of Agriculture Jl. Cipaku I No. 13
C/- ANZDEC (NZ) Kebayoran Baru
Bank Panin Pusat, 2nd Floor Jakarta South 12170
Jl. Jend. Sudirman 1 Senayan Ph: 62-21-722 1974, 725 7578
Jakarta 10270 Fax: 62-21-720 1977
Ph: 62-21-765 2537
Fax: 62-21-720 1970 Em. Haryadi
Director, Development Management and Training
Peni Sari Palupi Specialist
Editorial Staff Bina Swadaya Community Self Reliance
Trubus Agricultural Magazine Development Agency
Jl. Gunung Sahari III/7 Jl. Gunung Sahari III/7
Jakarta 10610 Jakarta Pusat 10610
Ph: 62-21-421 4884 Ph: 62-21-420 4402, 425 6535
Fax: 62-21-421 4884 Fax: 62-21-420 8412

SINGAPORE
F. Rahardi
Vice-Managing Director Karine Lainé
Vice-Editor In Chief Cocoa Research Manager
Trubus Agricultural Magazine Nestlé
Jl. Gunung Sahari III/7 Nestlé R&D Centre
Jakarta 10610 29 Quality Road
Ph: 62-21-421 4884 Singapore 618802
Fax: 62-21-421 4884 Ph: 65-268-6505
Fax: 65-265-5633
Onny Untung
Agriculture Consultant
Trubus Agricultural Magazine
Jl. Gunung Sahari III/7
Jakarta 10610
Ph: 62-21-421 4884
Fax: 62-21-421 4884

84
Annex 3: Selected references
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Ocean Rim, Proceedings of the Agribusiness 1996 conference, Fremantle Western
Australia, 19–23 August.

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Profile). Quest Economics Database (May).

Asia Pacific Food Industry. Various issues 1995–98.

Asian Development Bank. 1996. East ASEAN Growth Area: Brunei Darussalam,
Indonesia, Malaysia and Philippines Vol. VI, Part One. Manila: Asian Development Bank.

Asian Development Bank. 1996. East ASEAN Growth Area: Brunei Darussalam,
Indonesia, Malaysia and Philippines Vol. VII, Part Two. Manila: Asian Development Bank.

Asian Development Bank. 1996. East ASEAN Growth Area: Brunei Darussalam,
Indonesia, Malaysia and Philippines Vol. VII, Part Three. Manila: Asian Development
Bank.

Austrade: Australian Trade Commission. 1996. Livestock: Indonesia (Series: Market


Profile). Canberra: Australian Trade Commission (May).

Austrade: Australian Trade Commission. 1995. Meat: Indonesia (Series: Market Profile).
Canberra: Australian Trade Commission (Sep.).

Austrade: Australian Trade Commission. 1995. Fruit and Vegetables: Indonesia (Series:
Market Profile). Canberra: Australian Trade Commission (June).

Austrade: Australian Trade Commission. 1995. Dairy Products: Indonesia (Series: Market
Profile). Canberra: Australian Trade Commission (June).

Austrade: Australian Trade Commission. 1995. Beverages: Indonesia (Series: Market


Profile). Canberra: Australian Trade Commission (June).

Austrade: Australian Trade Commission. 1995. Livestock: Indonesia (Series: Market


Profile). Canberra: Australian Trade Commission (June).

Australian Bureau of Statistics. 1997. International Merchandise Trade: Australia, March


Quarter 1997. Canberra: Australian Bureau of Statistics.

Australian Financial Review. 1997. ‘Jakarta Cuts Tariffs on 1,600 Items.’ Australian
Financial Review 9 July: 8.

Bhinekawati, R. 1996. Overview of Fastfood Restaurants (Series: International Market


Insights). Jakarta (US Embassy): National Trade Data Bank: Market Reports (May 1).

85
Biro Pusat Statistik. 1997. Statistik Kesejahteraan Rakyat (Welfare Statistics) 1996. Jakarta:
Biro Pusat Statistik.

Biro Pusat Statistik. 1997. Monthly Statistical Bulletin: Economic Indicators July 1997.
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BKPM. 1996. ‘Trends of Domestic Investment Approvals by Sector 1992 – February 15,
1996.’ BKPM Monthly Report Feb: A012–A015.

Bolt, C. 1997. ‘Hard Fight Ahead with US Meat Exporters.’ Australian Financial Review.
Aug. 15: 11.

Bolt, C. 1997. ‘Beef Market is Looking Up Says Council.’ Australian Financial Review.
Jul. 14: 3.

Central Kalimantan Regional Development Planning Agency. Business and Investment


Opportunities in Central Kalimantan Province.

Chandra, S. 1997. Restrictions on Retail Chains (Series: International Market Insights).


Jakarta (US Embassy): National Trade Data Bank: Market Reports (Jun. 11).

Chandra, S. 1996. Health Foods (Series: International Market Insights). Jakarta (US
Embassy): National Trade Data Bank: Market Reports (Aug. 1).

DC/ICN. 1996. ‘Government Intensifies Development of Sugar-Production Centres in


Areas Outside of Java.’ DC/ICN. Aug. 26 (No. 202): 50–52.

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Department Pertanian Propinsi Kalimantan Timur. 1996. Perencanaan Pengembangan


Agribisnis Melalui Baseline Study Dan Swot Di Kotamadya Dati II Balikpapan.

Department of Agriculture, The North Sulawesi Provincial Office, Manado. 1997.


Investment Handbook on Agroindustry in the North Sulawesi Province.

Department of Foreign Affairs and Trade. Asialine. Various issues.

Department of Industry and Trade, North Sulawesi Provincial Office. 1997. North Sulawesi
Exporters Directory.

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Industrial Companies in North Sulawesi.

Earl, G. 1998. ‘Doubts Linger Despite Free-Trade Statement.’ Australian Financial Review.
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86
Earl, G. 1997. ‘Salim Group Turns to Singapore.’ Australian Financial Review. Jul. 17: 10.

Eastern Indonesia Development Council. 1997. The Opportunity of Investment in Eastern


Indonesia.

Eaton. 1996. Surabaya Economic Profile (Series: International Market Insights). Jakarta
(US Embassy): National Trade Data Bank: Market Reports (Jul. 5).

Eaton. 1995. Indonesia: Eastern Indonesia Economic Profile (Series: International Market
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Economic & Business Review Indonesia. 1996. ‘Flour Milling Unit Key to Indofood’s
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Fane, G. 1995. Economic Reform and Deregulation in Australia. Canberra: Centre of


Economic Policy Research, Australian National University

Felton-Taylor, L., S. Doyle & T. Scanlan. 1995. ‘The Changing Nature of Australia’s
Agrifood and Fibre Exports to ASEAN.’ Outlook 1995: 43–59.

Government of Central Kalimantan Province. Investment Opportunities in the Province of


Central Kalimantan.

Government of West Kalimantan Province. Potency and Opportunities Prospect in West


Kalimantan.

Governor of South Sulawesi. Agricultural Product Promotional and Selling Policy to Assist
Agrobusiness and Agroindustry in South Sulawesi.

Gray, S. 1996. ‘Distribution of Mandarins in Indonesia.’ Australasian Agribusiness Review.


4(2): 45–59.

Hartono, H. S. 1996. Market Development Report (Series: International Market Insights).


Jakarta (US Embassy): National Trade Data Bank: Market Reports (ID9624V).

Hilfe Country Report. 1997. Indonesia: January 1996 (Country Profile). Quest Economics
Database (Jan.).

Jakarta Post. 1996. ‘RI Feared to Become Asia’s Largest Importer of Foodstuffs.’ Jakarta
Post. Aug. 15: 1.

Jakarta Post. 1996. ‘New Paradigm Needed to Face Globalisation: Economists.’ Jakarta
Post. Aug. 14: 1.

Jakarta Post. 1996. ‘Pesticide Content in Fruit to be Regulated.’ Jakarta Post. Aug. 14: 10.

Jakarta Post. 1996. ‘Poor Management May Stall Agricultural Development.’ Jakarta Post
Aug. 9: 12.

JICA. 1997. Provincial Profiles of Eastern Indonesia: South Sulawesi.

87
Kantor Statistik Dengan Bappeda Propinsi Sulawesi Tengah. 1995. Regional Income of
Central Sulawesi.

Kantor Statistik Dengan Bappeda Propinsi Sulawesi Tengah. 1995. Central Sulawesi in
Figures.

Kantor Statistik Prop. 1996. South Kalimantan in Figure.

Kantor Statistik Prop. 1996. East Kalimantan in Figures.

Kantor Statistik Prop. Kalimantan Barat. 1996. Central Kalimantan in Figures.

Kantor Statistik Prop. Kalimantan Barat. 1996. West Kalimantan in Figures.

Kantor Statistik Propinsi Sulawesi Tenggara. 1995. Sulawesi Tenggara Dalam Angka 1995.

Kompas Online. 1996. ‘Perlu, Reorientasi Paradigma Pangan Nasional.’ Kompas Online.
URL: http://www.kompas.com/9609/14/DAERAH/perlu.htm Sep. 14.

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URL: http://www.kompas.com/9609/7/DAERAH/ruup.htm Sep. 7.

Kumalasari, M. 1997. Import of Beef (Series: International Market Insights). Jakarta (US
Embassy): National Trade Data Bank: Market Reports (Jan. 6).

Kumalasari, M. 1996. Shipping Consumer-Ready Food Products (Series: International


Market Insights). Jakarta (US Embassy): National Trade Data Bank: Market Reports (Oct.
15).

Kumalasari, M. 1996. Rice Field Irrigation Construction Project (Series: International


Market Insights). Jakarta (US Embassy): National Trade Data Bank: Market Reports (Apr.
16).

McBeth, J. 1995. ‘Swamp for Sale: Indonesia Woos Private Sector for Huge Rice Scheme.’
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Investment.

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Jakarta Post. 8 Feb.: 2.

Plansearch & Associates 1996. Retail/Wholesale Distribution Channels (Series:


International Market Insights). Jakarta (US Embassy): National Trade Data Bank: Market
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Jakarta Post. Aug. 8: 8.

88
Provincial Government of South-east Sulawesi Regional Investment Coordinating Board.
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Provincial Investment of Coordinative Board West Kalimantan. 1996. Profile Investment of


West Kalimantan.

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Jakarta (US Embassy): National Trade Data Bank: Market Reports (Apr. 15).

Regional Investment Coordinating Board of West Kalimantan. 1997. Investment


Opportunities West Kalimantan.

Regional Investment Coordinating Board North Sulawesi. 1995. Investment Opportunity:


North Sulawesi Manado.

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INSTRUCTIONS FOR PRINTER Pub no 99/42

BACK COVER BLURB:

This report surveys the agribusiness opportunities for Australian companies in


selected regions of Indonesia. Recognising that Indonesia is a very large and
diverse country, not a single market, the study concentrates on the eight
provinces of Kalimantan and Sulawesi.

It is a companion volume to an earlier study by the Asia Research Centre,


published as RIRDC Research Paper 96/6, which covered Sumatra and East
Java.

This publication, one of over 300 RIRDC research reports, can be veiwed and
purchased online at www.rirdc.gov.au/pub/cat/contents.html

SPINE TEXT

Agribusiness Opportunities in Kalimantan & Sulawesi RIRDC Publication


No. 99/42

95