FISHERIES SECTOR Investing in Indonesia's - EU-Indonesia Business Network
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Investing in Indonesia’s FISHERIES SECTOR An overview of opportunities, capabilities and provisions Published in December 2018 With the support of:
Contents
Opportunities: Tuna, Shrimp, Crab, Seaweed, Cold Storage, and Shipyard/Ship-building
• Introduction to the sector 3
• Why Indonesia? 5
• Market opportunities 6
• Existing and future capabilities 15
• Government provisions and support 27
• Six good reasons to invest in Indonesia’s Fisheries sector 38
The Investment Coordinating Board of the Republic of Indonesia
2
Introduction to Indonesian fisheries
Indonesia is currently the… World’s 2th Longest
• World’s 2th Largest Fisheries Producer Coastline
• World’s Largest Source of Seaweed
• World’s 7th Largest Exporter of Processed and Canned Tuna
• Largest Shrimp Producer in South East Asia
Challenges in the sector remain:
The fisheries sector provides vital In 2014 , almost 5,000 foreign
support to coastal economic fishing boats were operating illegally • Addressing illegal, unreported and
development, creating employment in in Indonesian waters. In 2016, the unregulated (IUU) fishing.
fish catching and in onshore number has been successfully
processing, as well several thousand reduced to 163. • Prohibited the issuance of new
indirect jobs. licenses to vessels over 150 GT.
New regulations and reformations on
Indonesia lands approximately 1.1 licenses have been introduced to • New regulation limits traditional
million tonnes of pole and line caught sustainably manage the sector’s fishing methods in order to remove
tuna a year, though it is estimated supply chain, as well as to maintain doubts around destructive and
that only 10-20% reaches market the welfare of as many as 2 million overly exploitative fishing gears.
labeled as pole and line caught. local fishermen.
Hence it has been one of the least
regulated subsectors.
The Investment Coordinating Board of the Republic of Indonesia
3
Indonesia’s geography and location
Indonesia lies at the intersection of the Pacific Ocean and the Indian Ocean. Over
half of all international shipping goes through Indonesia waters.
Indonesia is one of the most populated countries in the world (currently 265 million
people*). Indonesia accounts 40% of total ASEAN population.
As the largest archipelagic country in the
ASEAN
world, Indonesia comprises more than 16,056
islands spread over nearly 6,500km from east
to west. At 95,181km, it has the world’s 2nd
longest coastline. Indonesia’s Java island
alone is as big as England and home to 125
million inhabitants, including its capital
Jakarta, which can be reached via direct
flights from numerous locations worldwide,
including:
Singapore: 1h40min Kuala Lumpur: 2h50min
INDONESIA
Bangkok: 3h30min Hong-Kong: 5hrs
Sydney: 6h50min Tokyo: 7hrs
Sumatra Java Kalimantan Sulawesi Nusa Tenggara Papua
Seoul: 7hrs Dubai: 7h50min
Beijing: 7h20min Amsterdam: 14h20min
Source: Minsitry of Home Affairs (2016)
http://www.bakosurtanal.go.id The Investment Coordinating Board of the Republic of Indonesia
4
Why Indonesia
MARKET EXISTING & FUTURE GOVERNMENT
OPPORTUNITIES CAPABILITIES PROVISIONS & SUPPORT
Indonesia is the world largest 60,584 Fish Processing Units Continuously enforcing and
source and fisheries producer, are available throughout promoting sustainable fisheries
including tuna, seaweed and Indonesia programme
shrimp.
Lowest operating costs in Revitalising existing land for
it is expected that the industry ASEAN-5 (Thailand, aquaculture of seaweed,
can produce various type of Philippines, Malaysia, Vietnam shrimp and crabs.
250,000DWT vessels by 2025 and Indonesia) for a food and
beverage manufacturing plant. Open FDI investments include:
Indonesia maritime economic aquaculture, seaweed
potential is US$ 1,33 trillion Host to leading centres of processing industry and
per year. excellence, including a shipbuilding/shipyards and cold
prestigious government-funded storage facilities.
specialist fisheries college
The Investment Coordinating Board of the Republic of Indonesia
5
MARKET OPPORTUNITIES
The Investment Coordinating Board of the Republic of Indonesia
Image source: http://www.flickr.com/photos/arditpg/3590772699
6
Indonesian Marine Resources
Potential of Maritime Economy Contribution of Fisheries to National GDP
Capture 2.56 2.57
fisheries 2.51
Non-conventional 1%
resources Aquaculture 2.32
15% 16% 2.27 2.27 2.28
2.21 2.21
2.16
Mangrove
forest
1%
Fish processing
Resources of small industry
islands 7% 2013 2014 2015 2016 2017
9%
Share of fisheries to the national GDP at constant prices
Share of fisheries to the national GDP at current prices
Biotechnology
Maritime services
industry
industry
14%
Target of Marine and Fisheries Ministry
15% Information 2016 2017 2018 2019
GDP Growth of Fisheries (%) 8,00 9,50 11,00 12,00
Sea
transportation Mining and Fishery Production (million tonnes) 22,63 27,24 34,19 43,09
2% Marine tourism energy
Export (USD billion) 6,82 7,62 8,53 9,54
16%
4%
Source: Statistics Indonesia, 2015 Fish Consumption (kg/capita/year) 43,88 47,12 50,65 55,78
Processed Product Volume (ton) 5,90 6,20 6,50 6,80
Indonesia maritime economic potential: Investment Need for Marine and
139,31 165,23 209,95 260,22
Fisheries Sector (IDR Trillion)*
US$ 1.33 trillion per year *) Government, Private, and Community
The Investment Coordinating Board of the Republic of Indonesia
7
Abundant wealth in Indonesian territorial waters
Global future demand is on the rise and will be dependent on these sources
World’s Fisheries sector +60,000 Fish Processing
2nd Growth was Units are available
throughout Indonesia:
longest coastline 5.95% in 2017
GDP Growth of
5.500 rivers and lakes Year Fisheries Sumatra
Java
: 13.947
: 26.840
2013 7.24
Kalimantan : 8.880
2014 7.35
5,8 million km2 sea 2015 8.96
Bali & Nusa Tenggara : 5.231
Sulawesi : 5.137
area (including 2,55 million 2016 5.14 Maluku & Papua : 1.767
km2 of Exclusive Economic 2017 5.95 Total (2016) : 61.802
Zone) Target 2019 12
Indonesia GDP is USD $ 1 Trillion (2017)*
Tremendous biodiversity Value Export of Fisheries Commodities in USD
16,500 aquatic species
65 million tons/year
potential fisheries
production (7,4 million ton
capture and 47,6 million ton
aqua/marine culture)
Source: BIG (2016), BPS (2018), KKP DirGen Fisheries Processing and shrimp Tuna Other Fish Crab Cephalopods
Marketing (2016), Ministry of Marine Affairs and Fisheries (MMAF) 2016.
The Investment Coordinating Board of the Republic of Indonesia
8
Investment Realization
Fishery Investment in Indonesia, 2010-2017 (FDI)
FDI Realization by Sector (USD Million) Fishery Investment by Location (USD Million)
Fishery Investment by Countries (USD Million)
The Investment Coordinating Board of the Republic of Indonesia
9
Increased production capacity spurring from
increased domestic consumption
The Indonesian fisheries sector contributed almost 2.57 The Government through its Midterm Plan* has
% or USD 16,8 Billion to the country’s economy in indicated its targeted volume to reach 19.5 million
2017. tons of fish by 2019. Through the plan, the
Indonesian Government states three targets for
Domestic fish consumption** grew to 47.34 kilograms increasing fisheries products and fish processing
(kg)/capita in 2017 from 43.94 kg/capita in 2016. The industry:
average monthly expenditure per capita for fish was
IDR28,356 in 2013, by 2017 it became IDR 40,478 1. Achieve GDP growth of 7.2% annually in the
(USD 3). The consumption per capita target by 2019 is fisheries sector
54,4kg. 2. Reach fish production volume of 19.5 million,
and USD 9.5 billion in export value by 2019
Fish Consumption per Capita (in Kg) 3. Increase the volume of processed fisheries
products by 6.8 million tons by 2019
2014 2015 2016 2017
19.5
Fish Consumption/Capita
38.14 41.11 43.94 47.34 Targeted Total Volume and Fish Production
(million ton) 2014 – 2015
Source: RPMJN 2015 - 2019 16.2
In order to meet its 2019 production target of 50 million
ton, Indonesia will require approximately 141,1 billion 13.4
seeds of fresh water, brackish & sea fish. 11.1
10.2 10.6
2014 2015 2016 2017 2018 2019
Source: Statistik KKP (2017), RPJMN (2015 -2019) The Investment Coordinating Board of the Republic of Indonesia
10Indonesian shrimp exports are expected to rise to meet with
global demand
Shrimp Aquaculture in Asia: 2010 – 2018 Total Indonesia Shrimp Production (Ton)
Major Producer 800000
MT=Metric tones 698138
645955 639369 615871
555138
415703
2012 2013 2014 2015 2016 2017 2018
(Target)
Global demand for Indonesian shrimps is
estimated to be around 560,000 – 570,000
tons yearly with main destination USA,
getting about 57% of Indonesian exported
shrimp.
Shrimp is the most important fisheries export commodity, In 2016, more than 60% of total fisheries
representing 45% of the total value of Indonesian export of exported to the US was shrimp, valued at
fishery products. above USD 1 billion, and is expected to
increase in 2017. Most Indonesian shrimp
Shrimp production in 2016 was estimated to range between 11.2 are either exported in frozen form or with
and 17.6 million metric tones. Farmed shrimp is a key driver of heads and shells removed.
global aquaculture supply, which exceeded wild caught supply for In 2017 due to bad weather the shrimp
the first time in 2014. production declined.
Exports are expected to rise in order to
Source: http://www.aqtinfo.com/2016/11/global-shrimp-survey-goal- meet global demand.
2016.html/, KKP Book (Analisis Data Pokok, 2017),
http://www.trobos.com/detail-berita/2017/12/15/12/9648/menatap-
peluang-perudangan-2018 The Investment Coordinating Board of the Republic of Indonesia
11Indonesia is the world’s Top 5* global exporter of
canned and processed tuna
Indonesia Tuna Production by Type (2012-2016)
in tons
The second most important fishery commodity is
450608
tuna. In 2016 tuna contributed 22% of the
413152
401619
national fisheries production.
362143
340016
Indonesia produces mainly skipjack and Frigate Tuna
yellowfin tuna and to date still producing below
197207
193385
185966
182809
172543
Longtail Tuna
157801
the RFMO assigned quotas.
134346
119899
skipjack Tuna
107380
86883
82634
76240
75581
yellowfin Tuna
67714
58819
Indonesia’s tuna mainly goes to the UK,
Germany, the US, and Japan. Japan remains
Indonesia biggest importer.
2012 2013 2014 2015 2016
Since 2015 Indonesian government’s policy in
combating illegal, unreported and unregulated
Indonesian Tuna Export in Thousand USD
fishing (IUUF) has resulted in increase of fish
stock. Based on the study by University of Non Processed Processed
California Santa Barbara and Ministry of Marine
Affairs and Fisheries (MoMAF) it is expected by
2050 the fish biomass will increase by 224% and
can be translated to USD 3,7 billion economic
gain.
*, Thailand, Ecuador, Spain, China, Indonesia and Mauritius in the first half of
2016 according to Globefish.
Source:: KKP Book (Analisis Data Pokok, 2015), BPS (2015)
The Investment Coordinating Board of the Republic of Indonesia
12Enforcement on sustainable crab aquaculture
Volume of Crab Export in Thousand Ton Traditionally, Indonesia had relied on nature
and wild-catch for its crab production, which
might caused shortages of current crab family
population.
In 2015 the MoMAF enacted a new regulation
enforcing more sustainable aquaculture in this
area. It prohibited the catchment of crab
(Portunus spp., Scylla spp.) and lobster
(Panulirus spp.) when they are breeding and
when they are smaller than a certain size. The
policy is to provide for a healthier and more
abundance stock.
Of all fishery products exported, which was
mainly to China and the US, crab has the
highest added value because the end product
was ready-packed for retail. The value of
exports continued increasing steadily between
2015-17.
In 2016, the value of crab exports stood at
USD 322 while in 2017 was USD 411 million.
Source: KKP Processing Crab Products (2017), FAO (2014)
The Investment Coordinating Board of the Republic of Indonesia
1380% of the world’s Carrageenan Seaweeds originate
from Indonesian waters
Seaweed Export Value and Volume The Potential of Seaweed
220 250 Farming Land in Indonesia
Volume in Thousands Tons
210 200 Region Potential Size
Value in million USD
200 150 (Hectare)
190 100 Aceh 104,000
180 50 North Sumatra 20,000
170 0
Riau islands 37,635
2015 2016 2017
Volume Export Value Export East Java 16,420
Seaweed Production in Million tons Bali 1,151
Seaweed 2015 2016 2017 2018 2019
West Nusa Tenggara 22,270
Production 11.3 11.6 10.8
Target Production 10.6 11.1 13.4 16.2 19.5 East Nusa Tenggara 10,086
Indonesian seaweeds have been exported all over the world, 85% of South Sulawesi 250,000
them as raw materials. While Indonesia has 555 species of seaweeds, it North Sulawesi 50,600
produces mostly Cotonii sp. and some Glacilaria sp.
Central Sulawesi 106,000
Blessed with an ideal climate and geography for seaweed cultivation, Southeast Sulawesi 83,000
the majority of seaweed cultivation is in the Eastern parts of Indonesia East Kalimantan 15,520
including Bali, Nusa Tenggara, Sulawesi and Maluku.
Gorontalo 2,850
The government is committed to support seaweed industry, not only by Maluku 206,000
increasing seaweed target production to 19.5 million tons in 2019 but Papua 501,000
also giving various incentives and setting up industrial clusters across
Total land available 925,523 ha
the archipelago for farming
Source: Ministry of Fisheries and Maritime Affairs
The Investment Coordinating Board of the Republic of Indonesia
14Potential of Indonesian shipbuilding industry
Currently, there are 250 shipyards companies with ship repair capacity of 12
million DWT and new ship building capacity of 1 million DWT per annum
Indonesia’s shipyards have the Vessel Age Percentage There are around 60 companies
capacity and capability to build 0-5 25 make up the Indonesia ship
various type of ships up to 50,000 components industry.
6-10 15
DWT and repairing up to 300,000
DWT (graving dock) 11-15 15 They are capable in producing
16-20 13 rubber and plastic product,
Indonesian shipbuilding industry is 21-25 9 capstans and windlass, casting
also capable in producing >25 21 product, crane, fire extinguisher,
Submarine, Strategic Sealift Vessel IMO fluorescent signs, marine
and Guided Missile Destroyer. and protective coating, anchor
and chain, steering gear,
In 2016 the Indonesian Government propeller.
ordered 193 units which was almost
quadrupled the previous years. According to the roadmap, by
2025 it is expected that the
In 2017 83% of 218,300 GT worth of industry can produce various
the ship orders are for domestic type of 250,000DWT vessels
market. As most of Indonesian ships '89: Ships, boats and floating structures 2012 2013 2014 2015 2016
are aging there is increasing demand
in the near future for new ships. Indonesia's exports to the World 818,577,342 942,474,406 714,460,834 375,307,498 492,294,853
Most of shipyards are concentrated Indonesia's imports from the World 1,807,631,000 1,131,030,000 1,212,744,000 1,107,534,000 990,342,000
on Batam and Java islands.
Source: Iperindo (2017) Total trade 2,626,208,342 2,073,504,406 1,927,204,834 1,482,841,498 1,482,636,853
The Investment Coordinating Board of the Republic of Indonesia
15Cold Storage Distribution is Still Concentrated in the Western Region
The construction of cold storage is plagued by electricity supply, clean water network and other
supporting infrastructure
Cold Storage Location, supported by MoMAF and MoMAF has prioritized to have 8 units of cold
Private Sector storage between 30-100 tons, 300 packages of
chest freezer & thermal ice gel and 30 units of
1,5 ton ice flake machines in 2018 to
accommodate fisheries industry.
According to Indonesian Cold Storage
Association Indonesia’s seafood industry alone
requires some 14 million tons of cold storage
facility capacity per year. Back in 2016 the
supplied cold storage capacity was 7.5 million.
MoMAF cold storage (2009-2015) MoMAF single cold storage
(2009-2016)
Private cold storage Other sectors such as processed meat industry,
fruit and vegetable industry also experience lack
Cold Storage Availability and Demand of cold storage facilities.
835
in Thousand Ton
349 Required Storage Available Cold Storage Facility
251 Product
Facility (in million tons) Supply (in million tons)
118 118 99 97
23 31 11 4 14 (Processed) Fish 14.0 7.5
(Processed) Chicken Meat 5.0 1.5
Java Sumatera Sulawesi Bali & Nusa Kalimantan Papua &
Fruits & Vegetables 30.0 1.5
Tenggara Maluku
Demand of Cold Storage Available Cold Storage
The Investment Coordinating Board of the Republic of Indonesia
Source: Marine and Fishery Ministry, 2016
16EXISTING AND FUTURE CAPABILITIES
Image Source: Tribune News
The Investment Coordinating Board of the Republic of Indonesia
17Project opportunities
PORTS: VESSELS: COLD STORAGE
Modernizing 5 Existing Fishing Vessel 512 units:
Fishing Ports: 300 vessels 120 GT 60 units ice flake machines
Zachman, Jakarta of 1.5 tonnage
• PPS Bitung, 10 units ice flake machines
North Sulawesi of 5 tonnage
• PPN Pengambengan, 14 Units cold storage of 30-
Bali 100 tonnage
20 Integrated Marine and
• PPP Sendang Biru, 1 Unit cold storage of 1000
Fisheries Centers all over
East Java tonnage
Indonesia, especially in the
40 Units of refrigerated
• Jayanti, West Java Eastern Indonesia
vehicles
For further Information and more inquires please visit:
http://www.bkpm.go.id/en
The Investment Coordinating Board of the Republic of Indonesia
18Investment Opportunity
Fishery Opportunity
Annual Potential Market
Competitive
Location Catch Opportunities Infrastructures
Commodities Local Export
(kilo tons)
Simeuleu Regency, Aceh Tuna, Lobster, 36 Fisheries, Aquaculture, Processing, Airport (Medan 1 hour, Jakarta 3 hours – transit), Ferry wharf and Medan, Jakarta Singapore,
Grouper Marketing and Cold Chain cargo, Road network Hongkong, Taiwan,
Shanghai
Mentawai Regency, West Grouper, Seaweed, 270 Fisheries, Aquaculture, Tourism Port in 4 major islands (Padang 3 hours), Electricity, Fisherman gas Padang
Sumatera Pearl station, Fresh water
Natuna Regency, Snapper, Mackerel, 542 Fisheries, Aquaculture, Processing, Airport (Batam 1 hour, Jakarta 2 hours – transit), Cargo port, 6 ice Bintan, Batam, Hongkong,
Riau Islands Grouper Marketing and Cold Chain factories, Cold storage Pontianak, Jakarta Malaysia, Singapore
Nunukan Regency, Tuna, Grouper, 338 Fisheries, Aquaculture, Processing, Airport (Balikpapan 1 hour – transit), Ferry wharf (Malaysia 1 hour), Tarakan, Serawak
North Kalimantan Mackerel, Seaweed Marketing and Cold Chain Cold storage, Ice factory, Cannery, Freezing plant, Filleting Balikpapan,
Pontianak
Sangihe Regency, Mackerel, Grouper, 30 Fisheries, Aquaculture, Processing, Airport (Manado 1 hour), Fish port, Pertamina storehouse, Fish Bitung, Manado, Asia, Europe,
North Sulawesi Pompano, Sea Marketing and Cold Chain processing unit, Solar packed dealer for fisherman Minahasa America
cucumber
Morotai Island Regency, Tuna, Mackerel, 1,228 Fisheries, Aquaculture, Processing, Part of SEZ which has completed infrastructure, Airport (Manado 1 Manado, Makassar Manila, Darwin
North Maluku Grouper, Yellow fin, Marketing and Cold Chain hour, Manila 3 hours, Makassar 2 hours, Darwin 3 hours), Fish port
Lolosi, Trevally equipped with ice factory, cold storages and sufficient electricity
Kisar, South West Tuna, Grouper, 200 Fisheries, Aquaculture, Processing, Airport (Kupang 90 minutes), Ferry wharf, Electricity, Fresh water Ambon Timor Leste, Darwin
Maluku Napoleon, Seaweed Marketing and Cold Chain
Rote Ndao, East Nusa Tuna, Grouper, 17 Fisheries, Aquaculture, Processing, Airport (Kupang 30 minutes), Port, Fish market, Electricity
Tenggara Mackerel, Seaweed Marketing and Cold Chain
Saumlaki, Western Grouper, Lobster, 36 Fisheries, Aquaculture, Processing, Airport (Ambon 90 minutes), Fish market, Electricity, Fresh water, Ambon, Surabaya, Australia, Cina,
Southwest Maluku Seaweed marketing and cold chain, Warehousing, Seaweed processing plant Bali Hongkong,
Tourism (cruise) Singapore, Taiwan,
Japan
Tual, Maluku Tuna, Mackerel, 1,729 Fisheries, Aquaculture, Processing, Airport (Ambon 90 minutes), Ferry wharf, Fish port, Pertamina port, Ambon
Grouper, Shrimp, Marketing and Cold Chain Electricity, Fish processing plant
Seaweed
Biak Numfor, West Tuna, Grouper, Sea 1,997 Fisheries, Aquaculture Airport (Jayapura 1 hour, Makassar 2 hours), Pertamina storage, Manokwari
Papua cucumber Electricity, Fresh water
Sarmi, Papua Grouper, Snapper, 229 Fisheries, Aquaculture Airport (Jayapura 30 minutes), Ferry wharf Jayapura
Yellow fin, Lobster
Merauke, Papua Snapper, Shrimp, 125 The Investment
Fisheries, Aquaculture, Coordinating Board
Processing, of the(Jayapura
Airport Republic of Indonesia
1 hour), Port Surabaya, Makassar, China
Crab, Mullet fish marketing and cold chain Jayapura, Jakarta 19Success Story : Sea Delight, LLC
Sea Delight, LLC was founded in 2006 by Eugenio and Margarita
Sanchez, the owners of ADS Seafood, LLC dba Atlantic Fisheries, as
an initiative that sought to target the market of high quality frozen
and fresh seafood products.
Sea Delight is committed to supporting sustainable fisheries by
participating in sustainability workshops and partnering with our
suppliers to cooperate with appropriate NGO's (non-government
organizations) and join the Trace Register web-based traceability
program. This company support fisheries stakeholders in working
towards the goal of Marine Stewardship Council (MSC)
certification.
Sea Delight became the first company to receive official
membership in the WWF-Indonesia's corporate engagement
program, SEAFOOD SAVERS, their inter-business cooperation plan
for sustainable fisheries in support of Sea Delight's current Fishery
Improvement Projects (FIP) in Indonesia.
Source: http://www.sea-delight.com
The Investment Coordinating Board of the Republic of Indonesia
20Success Story : PT. Mustika Minanusa Aurora (PT. MMA)
PT. Mustika Minanusa Aurora (PT. MMA) is one of the leading
shrimp processing company in Indonesia. It was established in 1995
and managed by Dachan Greatwall group since 1998. The two
companies became partner in 2008 through Joint Venture.
Today, they have around 2500 skilled workers that is ready to
process wider range of product followed by the two extended new
plants which are PT. Misaja Mitra – Pati, which specialized in
producing finest breaded shrimp, and PT. Misaja Mitra – Kota Baru
which offer various of sea-caught shrimp freshly caught from
Sulawesi sea. PT. Misaja Mitra – Pati is located at Pati, Central Java,
Indonesia, and PT. Misaja Mitra – Kota Baru is located at Pulau Laut,
South Kalimantan, Indonesia.
PT. MMA is the pioneer organization that establishes the Mangrove
conservation program supported by World Wildlife Foundation
(WWF) and funds from our clients. They have successfully increased
the awareness of environmental protection among community.
Source: https://www.shrimp.co.id/
The Investment Coordinating Board of the Republic of Indonesia
21The corporate landscape
What are the investors saying?
The ocean is just one of “Indonesia offers big
many areas that opportunities through
sustainability can focus on, Our mission is to achieve ongoing its access to natural
and it is an area that is also commitment to build sustainable resources, a large
hard-hit by climate community through our Corporate work force and a
change. The Sea Delight Social Responsibility. We offer market of huge
2013 Annual report shows knowledge and skills to our potential. It is our
a strong effort to improve employees to support individual’s vision to become the
sustainability in Indonesia talents, as well as motivate them to market leader in the
achieve target through rewarding frozen food industry
system. Our organization believes renowned for high
that every member is an essential quality products, and
keystone to our success. we are open to
collaboration with
“As the largest shrimp partners with a similar
farms in Indonesia, goal”.
we guarantee the best
quality of shrimp for
export and have the
most advanced
techniques shrimp
farming in Indonesia”.
Source: http://fisheriesimprovementindonesia.org
The Investment Coordinating Board of the Republic of Indonesia
22Food Manufacturing:
Indonesia leads the way with operating costs
Data from the Financial Times has Total annual operating costs:
found that Indonesia has the lowest Food & Beverages Manufacturing Plant*
operating costs for a typical Food &
Beverages Manufacturing plant* of all
the 5 key ASEAN markets, at just over
US$1.51m per annum.
Indonesia is therefore 39% lower than
the average of US$2.47m per annum
across the 5 ASEAN countries.
Out of these markets, Indonesia has
the 2nd lowest labour costs and the
3rd lowest utility costs – it the only
market with relatively low costs on both
the labour and utility fronts.
Source: fDi Benchmark (Financial Times)
* Based on a food and beverage manufacturing plant with a headcount of 200, comprised as follows: 186 production
operatives (16 highly skilled, 70 skilled and 100 unskilled); 6 quality control specialists, 3 secretaries; 2 office service
specialists; 1 head of manufacturing; 1 production manager and 1 quality control manager.
The Investment Coordinating Board of the Republic of Indonesia
23Boat Building:
Indonesia’s labour costs lowest of the ASEAN-5
Data from the Financial Times has Total annual labour costs:
found that Indonesia is the most cost- Boat Building*
competitive country among the 5 major
ASEAN markets when it comes to
labour costs for a typical boat-building
operation.
Indonesia has the lowest operating
costs of all the 5 locations at $668,856
per annum.
Indonesia is therefore 20% lower than
the study average of $833,419 per
annum.
Source: fDi Benchmark (Financial Times)
* Based on a boat building operation with 150 employees, comprised as follows: 40 Unskilled Production Operatives; 16 Skilled
and Highly-Skilled Production Operatives; 40 Semi-Skilled Craftspeople; 20 Skilled Craftspeople; 9 Engineers; 8 Warehouse &
Distribution Operatives; 4 Secretaries; 3 Supervisors; 3 Quality Control Specialists; 3 Technical Drawers and 1 of each of the
following: Facilities Specialist; Head of Manufacturing; Production Manager and a Quality Control Manager
The Investment Coordinating Board of the Republic of Indonesia
24Private sector engagement in sustainable fisheries:
Eight companies have joined WWF’s Seafood Savers program.
This entails a commitment to operational safety, sustainable and
responsible use of Indonesia marine resources, and a
commitment to more towards MSC/ASC certification.
Corporate members of the Seafood Savers program will engage
in Fisheries Improvement Program (FIP) for capture fisheries
companies, an Aquaculture Improvement Program (AIP) for
aquaculture companies, and a Chain of Custody Improvement
Program (CoCIP) for restaurant, hotel, and supermarket
companies.
The Investment Coordinating Board of the Republic of Indonesia
25Commitment toward certification
1. Indian ocean long line 2. Indonesian pole, line, and 3. Blue Swimming Crab
tuna FIP. handline FIP FIP program
Contributes to the Development of the FIP Blue Swimming Crab
development, action Plan was (BSC) Processors and
improvement, and facilitated by IPNLF Exporters Association
sustainability of the (International Pole and (APRI), together with
Line Foundation). SFP and the Crab
tuna fishery industry by
Council, have worked to
promoting traceability,
improve the BSC fishery
improving the
through FIP since 2007.
availability and
accuracy of data on
total catch.
The Investment Coordinating Board of the Republic of Indonesia
26Indonesia Fair Trade Program
Indonesia Fair Trade program was initially based only in Maluku,
and now expanding the program to Sulawesi. At first, there were
only four groups of fishermen, and now increased rapidly up to
33 fishers association with a total of 712 fishers involved in this
program in August 2016.
Indonesia’s Fair Trade Achievement
In 2015, consumers in North Carolina, Portland, and Seattle
US can find Indonesian tuna products sourced by the certified
Fair Trade Fisherman from Maluku Ambon. As the number of
registered and participating fishers increases and hence the
volume available product increases the in-store product
range will also be expanded to more branches of Safeway
across the United States of America.
Source: http://mdpi.or.id/fair-trade-program/
http://mdpi.or.id/fair-trade-program/ The Investment Coordinating Board of the Republic of Indonesia
27Indonesia Fair Trade Communities
http:// mdpi.or.id/fair-trade-program /#
The Investment Coordinating Board of the Republic of Indonesia
28GOVERNMENT PROVISIONS AND SUPPORT
Image source: http://worldcocoafoundation.org/wp-
content/files_mf/aboutcocoatextpagesweb.jpg
The Investment Coordinating Board of the Republic of Indonesia
29Overview of Fisheries Minister Susi Pudjiastuti’s Policy:
a.Combating illegal fishing d. Provinces oversee near f. Launched a plan for
by foreign-owned and shore waters out to 12 modernizing the country’s
operated vessels is top nautical miles (nm); and the fishing fleet. Through its
priority. national government 2016 budget, Ministry of
oversees from 12-200 nm. Marine Affairs and
b.The administration’s Fisheries (MMAF) will
sinking of more than 160 d. MMAF will deregulate and spend IDR 3.72 trillion
illegal foreign-flagged simplify certain aspects of (roughly $286 million USD)
vessels. the fisheries sector in order on fish transportation,
to encourage foreign and fishing vessels, cold
c. Reform the capture fishing domestic companies to storage, and surveillance.
licensing system. submit tenders.
For further Information and more inquires please visit: http://
http://www.kkp.go.id/
The Investment Coordinating Board of the Republic of Indonesia
30Policy Reforms
Pro Investment Policies
Predictable
Tax incentive for
labor intensive
Dwelling time New Negative List of
Investment that is
Relaxation of entry
visa policy
Wage System industries optimization more open
Tax incentive
Acceleration of
Lower energy
for transport infrastructure & 3 Hour Licensing costs for Tax incentive
industries power Service in BKPM industries on property
development
EODB e-
Ease of Doing
%
Affordable
commerce
Incentive for
Acceleration of Business housing for investment in e-
land licensing Improvement the people commerce area
The Investment Coordinating Board of the Republic of Indonesia
31
Source: Bank Indonesia, May 2016Investment Opportunities in Indonesia 2015-2019
Investment Priority Sectors
BKPM’s PRIORITY SECTORS 2015-2019
35 GW power Multimode
Infrastructure 24 Sea ports
generation Transportation
Agriculture Food estate Corn Plantation Cattle Salt
Labor-intensive Food &
Textile Furniture Footware Lifestyle
industry Beverages
Import-subtitution Chemical &
Iron & Steel Component Defend Industry
industry Pharmaceutical
Industry
CPO &
Export-oriented Wood Products,
Electronics Derivative Automotive
industry Pulp & Paper
Products
Downstream industry
Cacao Sugar Smelter
of natural resources
Marine
Maritime Ship building Cold Storage
Technology
10 Tourism
14 Priority
Tourism, SEZ,& Industrial Park Priority 10 Tourism SEZ 8 Existing SEZ 7 New SEZ
Industrial Parks
Destination
IT Based
Finacial
Digital Economy e-Commerce Creative
Technology
Economy
The Investment Coordinating Board of the Republic of Indonesia
32Improving
INDONESIA
One-stop service for investment
Direct construction
Simplification of licensing
Pro-investment policy reforms
WHERE
ON EARTH
Bonded logistics centers
34 provinces &
514 regions,
decentralized
The Investment Coordinating Board of the Republic of Indonesia
33Indonesia has created some breakthrough to improve business climates
The Investment Coordinating Board of the Republic of Indonesia
34The Investment Coordinating Board of the Republic of Indonesia
35The Investment Coordinating Board of the Republic of Indonesia
36The Investment Coordinating Board of the Republic of Indonesia
37Green Lane Acceleration Facility
Four Customs Checking Status:
• RED line is for the new
companies.
• Physical & document checks
before transported from ports
• YELLOW line
• Document check before
goods transported from ports
• GREEN line
• Document check after goods
transported from ports
• Main Partner Priority for
companies with proven track
record. No checking required
New Facility: Status upgrade
from RED to GREEN line for new
companies under construction
The Investment Coordinating Board of the Republic of Indonesia
38Key Industry Ministries and Associations
Fisheries
Ministry of Marine Affairs Fishery Harbours Fish Quarantine and Indonesia Fisheries Public
and Fisheries / Kementerian Information Centre / Inspection Agency / Badan Company / Perusahaan
Kelautan Dan Perikanan Pusat Informasi Pelabuhan Karantina ikan, Pengendalian Umum Perikanan Indonesia
(KKP) Perikanan (PIPP) Mutu dan Keamanan Hasil
Perikanan (BKIPM)
A state-owned company
specialising in the sea
KKP is the main authority PIPP informs the dynamics of transportation of fisheries
mandated to organise marine fishing ports throughout Controls the safety of fishery products. The company
affairs and fisheries affairs Indonesia to fisheries and products for exporting partners with fishermen and
within the Indonesian marine stakeholders through purpose. The body issues small and micro businesses in
government. the following website: Approval for Loading letter (or the country.
Surat Persetujuan Muat). //http://bumn.go.id/perikananin
http://kkp.go.id www.pipp.djpt.kkp.go.id/ www.bkipm.kkp.go.id/bkipm/ donesia
Fisheries Businessman
The Bureau of Logistics Indonesia Aquaculture Yayasan Masyarakat dan
Association or Gabungan
or Badan Urusan Logistik Society or Kumpulan Perikanan Indonesia (MPDI)
Asosiasi Pengusaha
(BULOG) Akuakultur Indonesia
Perikanan Indonesia
(Gappindo)
A complete list of Fisheries
MPDI is a non-profit sector Association is available
organisation supporting the through the following Ministry
A state-owned company in Protecting the domestic sustainability of Indonesian of Marine Affairs and Fisheries
Indonesia which deals with manufacturing industry, KADI fisheries in order to achieve link:
food distribution and price deals with importation of the standards by WWF and the http://kkp.go.id/index.php/200
control. dumping goods and subsidies Marine Stewardship Council 8/02/02/daftar-
issues. certification. himpunanasosiasi-
www.bulog.co.id www.aquaculture-mai.org http://www.mdpi.or.id perikanan/?print=pdf
The Investment Coordinating Board of the Republic of Indonesia
39Key Industry Ministries and Associations
Fisheries
National Agency of Drugs The Centre of Brackish
and Food Control or Badan Water Aquaculture or
Pengawas Obat dan Balai Perikanan Budidaya Air
Batam Shipyard Offshore and Makanan (BPOM) Payau (BPBAP)
Offshore Association (BSOA),
was established on 7 August The Centre of Fresh Water
1997 as a non-profit Aquaculture or
organization by shipyard Balai Benih Air Tawar (BBAT)
companies which became a
pioneer of the growth in Communicates health and Technical Implementation
shipbuilding and offshore safety aspects including the Units under the Directorate
industries on Batam island. danger of chemical substances General of Aquaculture
on fisheries products. responsible for sustainable
http://www.bsoa-btm.org aquaculture and production.
http://www.pom.go.id
Indonesia Chambers of Association of Processing
Commerce / Kamar Dagang and Marketing of Fisheries
Indonesia (KADIN) products / Asosiasi
Pengusaha Pengolahan dan
KADIN is focused on all Pemasaran Produk Perikanan
matters relating to trade, (AP5I)
industry and services, offering
a strategic forum for The association promotes
Indonesian entrepreneurs. It is fisheries products
privately financed, hence an manufacturing and marketing
independent spokesperson of and is based at the Indonesia
private sector interests. Chambers of Commerce /
Kamar Dagang Indonesia
http://www.kadin- (KADIN)
indonesia.or.id/
The Investment Coordinating Board of the Republic of Indonesia
40Centres of Excellence
Fisheries
National College of Universitas Padjajaran Universitas Diponegoro Sidoarjo Fisheries
Fisheries and Technology Academy Politechnic
The school is under the The University’s fisheries The Faculty of Fisheries and Sidoarjo Fisheries Academy
auspices of the Ministry of department was established in Marine Sciences at the was established in 2002 after
Maritime Affairs and Fisheries. 1965, under the Agriculture Universitas Diponegoro was the formation of the Ministry
Faculty established in 1968 of Sea Exploration and
Fisheries in 1983.
http://www.stp.kkp.go.id/ http://fpik.unpad.ac.id/ http://www.fpik.undip.ac.id/ http://apsidoarjo.ac.id
The Investment Coordinating Board of the Republic of Indonesia
41Indonesia’s Special Economic Zones Open for Fisheries
(Indonesian: ‘KawasanEkonomiKhususor KEK’)
Central Sulawesi:
North Sumatra: East Kalimantan: • Automotive industry, heavy
• Processing of CPO, rubber) • Processing of CPO, coal movers equipment
• Textile products (garment and minerals • Electronic components
and apparels), fertilizers and • Agribusiness
chemicals. • Mining North Maluku:
• Logistics • Logistics • Tourism
• Tourism • Processing of
fisheries products
• Logistics
North Sulawesi:
• Processing of fisheries
South Sumatra: products, agrobusiness
• Processing of CPO and • Textile products (garment and
rubber apparels), fertilizers and
West Nusa Tenggara:
West Java: chemicals.
• Tourism
• Tourism • Logistics
Source: National Mid-Term Plan (2015-2019)
The Investment Coordinating Board of the Republic of Indonesia
42Key Regulations
BKPM together with the Ministry of Marine Affairs and Fisheries can provide you with
further details on specific pieces of regulation.
Law or Regulation Number: Concerning:
Presidential Regulation No. 81/2005 on the Establishment of the Coordinating Board for Security in the Sea
Coordinating Board for Security in the Sea (BAKORKAMLA) in order to enforce the security of Indonesian waters.
Law No. 45 Year 2009 (an amendment of All fisheries and marine related affairs
previous law No. 31 Year 2004)
Decree of the Minister of Marine Affairs and Quality and safety control of fishery products that enter the Indonesia territory.
Fisheries No. 74/PERMEN-KP/2016
Decree of the Minister of Marine Affairs and Monitors the water quality standards for Indonesian Shellfish Sanitation
Fisheries No.Kep.17/MEN/2015 System
Decree of the Minister of Marine Affairs and Protection on Lobster (Panulirus spp.) , Crab (Scylla spp.) and swimming crab
Fisheries No. 01/PERMEN-KP/2015 (Portunus pelagicus spp.)
Decree of the Minister of Marine Affairs and Ban on the use of fishing gear such as trawler (trawls) and seine nets in the
Fisheries No. 02/PERMEN-KP/2015 fishery management area of Indonesia
Decree of the Minister of Marine Affairs and Delegation of authority to the Indonesia Investment Coordinating Board
Fisheries No. 03/PERMEN-KP/2015 (BKPM) One Stop Shop on granting of Aquaculture Business Licenses
Decree of the Minister of Marine Affairs and Any 2015 Marine and Fisheries related affairs are: (a) handed down to the
Fisheries No. 14/PERMEN-KP/2015 provincial governors in the framework of de-concentration, and (b) assigned to
the Provincial or District / Town in the Framework of Assistance.
Decree of the Minister of Marine Affairs and Criteria and/or conditions of income tax facilities for investment in certain
Fisheries No. 17/PERMEN-KP/2015 business fields and / or in certain regions on the marine and fishery sector
Source: jdih.kkp.go.id,
http://www.fao.org/fishery/legalframework/nalo_indonesia/en#tcNB012F Further updates are available at http://jdih.kkp.go.id
The Investment Coordinating Board of the Republic of Indonesia
43Criteria and/or conditions of income tax
facilities for investment
As per Decree of the Minister of Marine Affairs and Fisheries No. 17/PERMEN-KP/2015
No Business Field Minimum value of Minimum Minimum absorption
Investment output to be of workforce
(in Indonesian exported
Rupiah - IDR) (volume)
1 Aquaculture of marine fish 80% 100 people, 90% of
IDR 25 billion which must be
Indonesian workforce
2 Floating net aquaculture of freshwater fish IDR 10 billion n.a.
3 Cold storage facility for fish products IDR 25 billion
4 Processing of fish products into floss, paste or surimi IDR 25 billion
5 Processing and preservation of fish and aquatic fish 50 people, 90% of
IDR 30 billion 50% which must be
(except Shrimp or Prawns) and packaged into cans
Indonesian workforce
6 Processing and preservation of Shrimp or Prawns and IDR 30 billion
packaged into cans
7 Cold storage facilities for other types of fish products IDR 20 billion
8 Processing and preservation of other types of fish IDR 15 billion 30%
Tax holiday will apply if a minimum amount of investment is IDR 1 Trillion*
*Please consult with BKPM for further information.
The Investment Coordinating Board of the Republic of Indonesia
44A range of incentives available including:
BKPM will provide advice on which incentive is applicable for fisheries sectors
TAX TAX IMPORT DUTY
ALLOWANCE HOLIDAY FACILITY
Government Regulation Ministry of Finance Regulation Ministry of Finance Regulation
No. 9/2016 No. 150/2018 No.176/PMK.011/2009
A variety of sectors are covered in
this Regulation including On machines and materials used
30% of investment value
fisheries. (18 eligible pioneer for production purpose
industries)
Period of tax holiday: 5-20years
based on investment value and 2 years import duty exemption or 4
Reduction of corporate net income
eligible for projects that years for companies using locally-
tax for 6 years, at 5% each year.
considered strategic for produced machines (min. 30%).
Indonesian economy.
145 business segments
Industry, producing goods and / or
Specific requirements incl.: Minimum amount of investment is: Services, including: tourism and
• minimum amount of IDR 1 Trillion culture; public transportation;
investment value and public health services; mining;
workforce, and certain project Reduction of tax up to 100%* construction; telecommunication;
location (especially outside and port.
Java island).
Source: BKPM (2015)
*Terms and conditions apply The Investment Coordinating Board of the Republic of Indonesia
45Areas restricted or closed for FDI
Certain types of activities are fully or partially restricted when it comes to FDI. Key areas
relevant to the fisheries sector are detailed below.
Subject to a
RESTRICTED FDI recommendation from the
Minister of Forestry
AQUACULTURE* (or fish farming) is open to FDI providing
hatcheries and fish rearing area is located beyond 12 nautical Gathering (taking) of and
miles from the coastline to the open sea and/or towards the trade in (wholesale of)
direction of the archipelagic waters. ornamental coral from
nature for aquariums
*Require Partnership with Local
Businesses:
Subject to Special CLOSED to FDI:
License or Permits
• Rearing of Fish*
• Hatchery of Fish*
from the Minister of (1) Capture Fisheries
Manpower and (2) Fishing of species
• Processing of Fishery Products
Transmigration: of fish listed by Convention
• Manufacture of wooden ships
• Manufacture of devices and on International Trade in
Fisheries business in Endangered Species of Wild
fittings of wooden ships for
transmigration areas Fauna and Flora
marine tourism and fishing
(3) Sea Sand Quarrying
The Investment Coordinating Board of the Republic of Indonesia
466 good reasons to invest in Indonesia’s fishery
sectors
Rising domestic and Increasing FDI in
global consumption of Abundant wealth in Fisheries industry from
fisheries products Indonesian territorial USD 30 million in 2012
waters offer various key to USD 59 million in
From 112 million tons in fisheries products and 2017.
2003 to 150 million tons sources
by 2030 (FAO, 2014) (BKPM)
Some of the 60,000 fish Most competitive Government
processing units and operating costs for commitment to
200 shipyards could be food and beverage supporting FDI in
benefitted from manufacturing aquaculture, fish
advanced technologies. in ASEAN-5 feeds, seaweed and
shipbuilding
(Financial Times)
The Investment Coordinating Board of the Republic of Indonesia
47Investment Opportunity
Shrimp Investment Policy
• Fishery Products Processing Enterprises (UPI):
• salting / drying fish and other aquatic biota industry
Negative Investment • fish smoking and other aquatic biota industry
List for Shrimp Industry • fermentation / fermented fish and other cooking products industry
• pulverized meat-based and surimi industry
• Marketing, Distribution, Wholesale and Export of Fishery Products
• Shrimp processing and preserving industry in cans. (All the products
included in the scope of this)
Tax Allowance for • Freezing industry of other aquatic biota. (Frozen shrimp and / or
Shrimp Industry breaded shrimp)
• Shrimp processing and preserving industry of other aquatic biota.
(Frozen shrimp and / or breaded shrimp)
Terms of Tax Allowance • Shrimp processing and preserving industry in cans. (Minimum 30
for Shrimp Industry billion IDR Investment value)
The Investment Coordinating Board of the Republic of Indonesia
48BKPM international representative offices
(Investment Promotion Centre):
Invest in...
For further information, contact us at:
BKPM - Indonesia Investment Coordinating Board
This document, initially developed by the EU-Indonesia Trade
Jln. Jend. Gatot Subroto No. 44
Jakarta 12190 - Indonesia Cooperation Facility project, has been updated in 2017 for
t. +62 21 525 2008 BKPM with the support of:
f. +62 21 525 4945
e. info@bkpm.go.id
www.bkpm.go.id
EU Desk at BKPM
t. +62 21 527 4802
e. eu.desk@bkpm.go.id
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