Heaptalk, Jakarta — Amid uncertain global economic conditions and the threat of food security, Indonesia still has the optimism to survive the dark year predicted in 2023. According to the President Director of Cilacap Samudera Fishing Industry (CSFI) William Sutioso, the country has several strengths, including a large population of 276 million people in June 2022, to anticipate the recession.
Currently, the strengths are starting to show a positive trend, one of which is increasing domestic consumption, particularly for marine products. Ministry of Marine Affairs and Fisheries recorded that the domestic fish consumption reached 55.37 kg per capita in 2021. The number grew by 1.48% compared to the previous year which was 54.56 kg per capita.
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The trend in the last ten years demonstrates an increment of 69.17% compared to the national fish consumption in 2011 which was only 32.25 kg per capita. The government aims to boost fish consumption to reach 59.33 kg per capita in 2022.
“We see domestic consumption remains stable. This large population is great for sustaining local sales. From my perspective, the food sector has the strength to face next year, resulting in better food security than other countries,” said William.
Market expansion as the world’s population rising
Although domestic consumption is performing well, exports are still valuable for expanding the market. The transition to post-pandemic brought a fairly rapid and dynamic change to export activities, thus raising new issues. One of the latest issues, for instance, is China tightening imported products that enter their ports, especially with the finding of covid-19 traces in fisheries products.
To overcome this issue, William Sutioso implemented a warehouse franco sales agreement strategy. The agreement allows the buyer to be responsible for the goods upon arrival at the port of destination. Therefore, the seller can minimize the risk if any issues are found at the destination.
Exploration of new markets is also necessary to expand product absorption in the post-pandemic period. He delivered, “We open several markets to mitigate the risk if one market does not work, we still have other markets that can absorb our products. Those are some of our strategies in mitigating risks to our export activities.”
In addition to market expansion, William is building mini plants in several regions, one of which is in Lampung, as an effort to improve production capacity and quality. The mini plants will process catches with high economic value according to the potential commodities in each region.
In the World Population Prospects 2022 report, the United Nations (UN) projects that the world’s population will reach 9.7 billion people by 2050. As of July 2022, the world’s population has reached around 7.94 billion people with East and Southeast Asia as the most populous region.
The rapid population growth will be followed by an increasing need for food, one of which is protein from fishery products. William said that the catch alone will not be able to meet the protein needs of the world’s fishery. It is not surprising that now many fishery business actors are starting to develop aquaculture according to geographical conditions. For example, Indonesia as a tropical country is suitable for the cultivation of vaname shrimp and high economic value fish such as grouper and snapper while subtropical countries can cultivate salmon.
“The food needs will indeed increase rapidly in the future. Solely relying on capture fisheries will not be able to fulfill these needs. For instance, shrimp caught in the sea cannot keep up with demand. Hence, this white vaname shrimp began to be developed rapidly and Indonesia becomes one of the top vaname shrimp producers in the world,” explained William.
The need for business and investment certainty
One of the breakthroughs made by the Cilacap Samudera Fishing Industry is developing aquaculture in collaboration with fishing companies from Norway. Currently, the aquaculture project is in the stage of site survey and environmental testing, especially regarding water quality, current strength and direction, and other aspects. William Sutioso and his team continue to coordinate with partners in Norway to determine what commodities are the most suitable.
The aquaculture project being built in East Lombok will be able to produce 120,000 superior brood stocks and 5,000,000 barramundi fish with a slaughter weight of 3 kg. Targeting to be operational in Q4 2023, the project will also produce fish slime for fertilizer and protein from slaughtering waste.
Currently, Indonesia does not yet have a high-quality fish meal factory with a protein content of 65-75%. Meanwhile, Vietnam partnered with Norway to build a feed mill worth €25 million. The collaboration between CSFI and partner from Norway potentially bridge this gap. This cooperation also is one of CSFI’s strategies to attract foreign investors.
Discussing the investment climate in Indonesia fishing industry, William affirmed that the investment can be improved. Among various aspects, the certainty of doing business is crucial for investors both foreign and domestic. William considered that policies should be made to become government regulations or parliament decrees, not only as ministerial decrees, to ensure business certainty.
His concern is that changes may occur to ministerial regulations when there is a ministerial reshuffle. Adjustments to new rules that change rapidly make investors doubt the certainty of doing business in Indonesia. If the policies can be ratified in the form of parliament decrees, according to William, investment in this sector, both foreign and domestic investments, will flourish. In addition, simplification of licensing and synchronization between the central and local governments are also critical.
Besides the investment, the capture fisheries sector itself faces the challenge of the need for skilled human resources. Based on William’s observation, Indonesian fishermen have proven to be reliable but still need to enhance their capacity, particularly in handling fish after being caught.
Good fish handling can rise the selling price, resulting in higher profits obtained by fishermen. CSFI applies the pricing strategy to fishermen to emphasize the importance of quality over quantity. The pricing strategy is carried out by purchasing high-quality fish at a higher price than the low one.
“Our fishermen are very reliable. Their education is not high but they learn from experience in a self-taught manner. Their fishing skills are indeed good, but the fish handling on the fishing vessel still needs to be improved,” said William Sutioso. With the pricing strategy, fishermen can notice the importance of fish handling after cathing as it can offer better price.