Value Chain Analysis of Marine Fish Aquaculture in Indonesia

156 Pages·2014·5.73 MB·English

2014

Value Chain Analysis of
Marine Fish Aquaculture in Indonesia
Business Opportunities for Norwegian Companies
Prepared for:

Prepared by:

June 2014

Table of Contents

1. Research methodology and objectives ......................................................................... 11
2. Summary and analytical outcomes ................................................................................ 12
3. General overview of Indonesian fisheries and aquaculture ......................................... 15
3.1. Current condition of Indonesian fishery sector .......................................................... 15
3.2. Structure of fisheries activities in Indonesia ................................................................ 18
3.3. Indonesian aquaculture .............................................................................................. 19
3.3.1 General overview of Indonesian aquaculture industry ................................................. 19
3.3.2 Aquaculture methodes ................................................................................................... 22
3.3.3 Fish species for marine aquaculture in Indonesia .......................................................... 24
3.3.4 Benefits,values and challenges for each aquaculture fish species .............................. 32
3.3.5 New species being developed ....................................................................................... 33
3.3.6 Domestic and export markets for each species ............................................................ 36
3.4 “Minapolitan” system as an unique approach to aquaculture................................. 39
3.5 The marine climate ....................................................................................................... 40
3.5.1 Pollution ............................................................................................................................ 43
3.6 Workforce availability ................................................................................................... 44
4. Aquaculture hotspot mapping ........................................................................................ 45
4.1 Province of Aceh ........................................................................................................... 47
4.2 Province of Riau Archipelago....................................................................................... 50
4.3 Province of Lampung .................................................................................................... 52
4.4 Province of East Java (Java Timur) .............................................................................. 55
4.5 Province of Bali .............................................................................................................. 58
4.6 Province of West Nusa Tenggara (Nusa Tenggara Barat) .......................................... 60
4.7 Province of South Sulawesi (Sulawesi Selatan) ........................................................... 63
4.8 Province of Maluku........................................................................................................ 65
4.9 Province of West Papua (Papua Barat) ....................................................................... 69
5. Value chain analysis ........................................................................................................ 72
5.1. Value chain commodity schemes.............................................................................. 72
5.1.1 Processed commodities .................................................................................................. 73
5.1.2 Live commodities ............................................................................................................. 74

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5.2 Value chain business segments ................................................................................... 75
5.2.1 Hatcheries......................................................................................................................... 75
5.2.2 Nursery/aquafarming....................................................................................................... 79
5.2.3 Vaccines .......................................................................................................................... 83
5.2.4 Fish feed ............................................................................................................................ 85
5.2.5 Processing ......................................................................................................................... 88
5.2.6 Logistics ............................................................................................................................. 91
5.2.7 Equipment ........................................................................................................................ 92
6. Regulatory, policy and investment environment .......................................................... 95
6.1 Top-level aquaculture investors and other stakeholders ........................................... 95
6.2 Laws, regulatory framework and standards ................................................................ 96
6.2.1 Property and water rights ................................................................................................ 96
6.2.2 Infrastructure development............................................................................................. 97
6.2.3 Legal context .................................................................................................................. 97
6.2.4 Research, technology development and extension ..................................................... 98
6.2.5 Promotion ......................................................................................................................... 98
6.2.6 Other policy frameworks ................................................................................................. 99
6.2.7 Taxation system for Indonesian aquaculture ............................................................... 100
6.3 Ownership structure for aquafarming and processing.............................................. 101
6.3.1 Investor facilities and incentives .................................................................................... 101
6.4 Foreign investment framework .................................................................................... 102
6.5 National and regional aquaculture initiatives ........................................................... 105
6.5.1 Overarching objectives ................................................................................................. 105
6.5.2 Prominent challenges .................................................................................................... 107
6.5.3 International cooperation ............................................................................................. 107
6.5.4 Permit processes ............................................................................................................ 110
7. Analysis and recommendations ..................................................................................... 111
7.1 Porter’s Five Forces analysis on each business segment .......................................... 111
7.1.1 Hatcheries....................................................................................................................... 111
7.1.2 Nursery/aquafarming..................................................................................................... 113
7.1.3 Fish feed .......................................................................................................................... 114
7.1.4 Vaccines ........................................................................................................................ 115
7.1.5 Processing ....................................................................................................................... 116

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7.1.6 Logistics (cargo services) ............................................................................................... 117
7.2 Market attractiveness for aquaculture species ......................................................... 118
7.3 Segments’ drivers and inhibitors .................................................................................. 119
7.4 Species comparison and attractiveness .................................................................... 121
7.5 Segments’s key success factors and key selling points ........................................... 123
7.6 Segments’ challenges and opportunities ................................................................... 125
7.7 Primary CSR issues ........................................................................................................ 128
7.8 Funding for market entry initiatives ............................................................................. 130
7.9 Recommendations ....................................................................................................... 132
Appendices .......................................................................................................................... 139
List of Indonesian maricultureknowledge institutions ........................................................... 140
List of integrated aquaculture players in Indonesia ............................................................ 142
List of equipment companies in Indonesia ........................................................................... 144
List of vaccines players in Indonesia ...................................................................................... 145
List of fish feed players in Indonesia ....................................................................................... 147
List of processing companies in Indonesia ............................................................................ 149

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List of Tables
Table 1 – Exploitation level status of fish resources in each of Indonesian FMA, 2012........................ 17
Table 2 – Average consumption of fish in 2010 – 2011.............................................................................. 19
Table 3 – Number of aquaculture establishments (in units) ..................................................................... 20
Table 4 – Fish species in Indonesian marine aquafarming ....................................................................... 25
Table 5 – Benefits, values & challenges for each aquaculture fish species ......................................... 32
Table 6 – Groupers (export figure and country of destination, 2012) .................................................... 36
Table 7 – Snapper (export figure and country of destination, 2012) ..................................................... 37
Table 8 – Barramundi (export figure and country of destination, 2012) ................................................ 38
Table 9 – Pompano (export figure and country of destination, 2012) ................................................... 39
Table 10 – Wind speed and tide information of Indonesian water ........................................................ 42
Table 11 – Indonesia competent workforce in 2013 ................................................................................. 44
Table 12 – Output breakdown per aquaculture spots in Indonesia ...................................................... 46
Table 13 – Unique strengths and weaknesses, Aceh ................................................................................ 47
Table 14 – Environmental conditions and supporting aspects, Aceh.................................................... 47
Table 15 – Comparative assessment of regency potential, Aceh ......................................................... 49
Table 16 – Marine fish aquaculture lifecycle, Aceh .................................................................................. 49
Table 17 – Unique strengths and weaknesses, Riau Archipelago .......................................................... 50
Table 18 – Environmental conditions and supporting aspects, Riau Archipelago .............................. 50
Table 19 – Comparative assessment of regency potential, Riau Archipelago ................................... 51
Table 20 – Marine fish aquaculture lifecycle, Riau Archipelago ............................................................ 52
Table 21 – Unique strengths and weaknesses, Lampung ......................................................................... 52
Table 22 – Environmental conditions and supporting aspects, Lampung ............................................ 52
Table 23 – Comparative assessment of regency potential, Lampung ................................................. 54
Table 24 – Marine fish aquaculture lifecycle, Lampung ........................................................................... 54
Table 25 – Unique strengths and weaknesses, East Java ......................................................................... 55
Table 26 – Environmental conditions and supporting aspects, East Java ............................................ 55
Table 27 – Comparative assessment of regency potential, East Java ................................................. 57
Table 28 – Marine fish aquaculture lifecycle, East Java ........................................................................... 57
Table 29 – Unique strengths and weaknesses, Bali .................................................................................... 58
Table 30 – Environmental conditions and supporting aspects, Bali ....................................................... 58
Table 31 – Comparative assessment of regency potential, Bali ............................................................. 59
Table 32 – Marine fish aquaculture lifecycle, Bali ...................................................................................... 60
Table 33 – Unique strengths and weaknesses, West Nusa Tenggara .................................................... 60
Table 34 – Environmental conditions and supporting aspects, West Nusa Tenggara ........................ 61

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Table 35 – Comparative assessment of regency potential, West Nusa Tenggara ............................. 62
Table 36 – Marine fish aquaculture lifecycle, West Nusa Tenggara ...................................................... 62
Table 37 – Unique strengths and weaknesses, South Sulawesi ................................................................ 63
Table 38 – Environmental conditions and supporting aspects, South Sulawesi ................................... 63
Table 39 – Comparative assessment of regency potential, South Sulawesi ........................................ 64
Table 40 – Marine fish aquaculture lifecycle, South Sulawesi.................................................................. 65
Table 41 – Unique strengths and weaknesses, Maluku ............................................................................. 65
Table 42 – Environmental conditions and supporting aspects, Maluku ................................................ 66
Table 43 – Comparative assessment of regency potential, Maluku ...................................................... 68
Table 44 – Marine fish aquaculture lifecycle, Maluku ............................................................................... 68
Table 45 – Unique strengths and weaknesses, West Papua .................................................................... 69
Table 46 – Environmental conditions and supporting aspects, West Papua ....................................... 69
Table 47 – Comparative assessment of regency potential, West Papua ............................................. 71
Table 48 – Marine fish aquaculture lifecycle, West Papua ...................................................................... 71
Table 49 – Cost level breakdown for hatchery company (medium scale).......................................... 76
Table 50 – Commodities' dynamics for hatchery company (medium scale) ...................................... 77
Table 51 – Cost level breakdown for nursery/aquafarming business segment ................................... 80
Table 52 – Commodities' dynamics for nursery/aquafarming business segment ............................... 80
Table 53 – Cost level breakdown for vaccines business segment ......................................................... 83
Table 54 – Cost expenditure for Indonesian aquafarmer ........................................................................ 84
Table 55 – Cost level breakdown for feed production business ............................................................. 86
Table 56 – Cost level breakdown for processing business ....................................................................... 89
Table 57 – Equipment classification and function ..................................................................................... 92
Table 58 – Types of Technical Implementation Units (UPT) ....................................................................... 96
Table 59 – Fields related to the business framework ................................................................................. 97
Table 60 – List of other international cooperation projects.................................................................... 108
Table 61 – Segments' drivers and inhibitors ............................................................................................... 119
Table 62 – Species’ drivers and inhibitors .................................................................................................. 121
Table 63 – Segments’ key success factors & key selling points ............................................................. 123
Table 64 – Challenges and opportunities for Indonesian aquaculture ............................................... 125
Table 65 – Primary and relevant CSR issues ............................................................................................... 128
Table 66 – Relevant funding for market entry initiatives ......................................................................... 130

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List of Figures
Figure 1 – Map of Fisheries Management Areas in Indonesia ................................................................. 15
Figure 2 – Production volume of fisheries in Indonesia, 2012 (tons) ........................................................ 16
Figure 3 – Activities and sub-activities of fishery sector in Indonesia ..................................................... 18
Figure 4 – Indonesian aquaculture commodities breakdown, 2012 (tons) .......................................... 20
Figure 5 – Historical and projection production volume of aquaculture, 2008 -2018 (tons) ............. 21
Figure 6 – Historical and projection production value of aquaculture, 2008 -2018 (IDR trillion) ....... 22
Figure 7 – Aquaculture production of Groupers in Indonesia, 2009-2012 (tons) ................................. 27
Figure 8 – Aquaculture production of Snapper in Indonesia, 2009-2012 (tons) ................................... 29
Figure 9 – Aquaculture production of Barramundi in Indonesia, 2009-2012 (tons) ............................. 30
Figure 10 – Aquaculture production of Pompano in Indonesia, 2009-2012 (tons) .............................. 31
Figure 11 – Marine map for Indonesian currents ........................................................................................ 40
Figure 12 – Indonesian tides and wind speed information ...................................................................... 40
Figure 13 – Depiction of warm current flow in Indonesia ......................................................................... 41
Figure 14 – Indonesian salinity map .............................................................................................................. 41
Figure 15 – Aquaculture hotspot area selection process ......................................................................... 45
Figure 16 – Brackish-water Aquaculture Development Centre (BADC), Aceh ................................... 48
Figure 17 – Mariculture Development Centre (MDC), Batam ................................................................. 51
Figure 18 – Main Centre for Mariculture Development (MCMD), Lampung ........................................ 53
Figure 19 – Brackish-water Aquaculture Development Centre (BADC), Situbondo ........................... 56
Figure 20 – Research Institute of Mariculture (RIM), Bali ........................................................................... 59
Figure 21 – Mariculture Development Centre (MDC), West Nusa Tenggara ....................................... 61
Figure 22 – Brackish-water Aquaculture Development Centre (BADC), Takalar ................................ 64
Figure 23 – Mariculture Development Centre (MDC), Ambon ............................................................... 67
Figure 24 – Hatchery unit of Ministry of Marine Affairs and Fisheries, West Papua .............................. 70
Figure 25 – Value chain scheme in Indonesian aquaculture industry (processed commodities..... 73
Figure 26 – Value chain scheme in Indonesian aquaculture industry (live commodities) ................ 74
Figure 27 – The hatchery business segment value chain in Indonesian aquaculture sector ............ 75
Figure 28 – Fish juveniles in styrofoam ........................................................................................................... 77
Figure 29 – The nursery/aquafarming business value chain in Indonesian aquaculture sector ....... 79
Figure 30 – Enlargement of aquafarming segment................................................................................... 80
Figure 31 – Deployed cages technologies on Indonesian aquaculture............................................... 81
Figure 32 – The vaccine business segment value chain in Indonesian aquaculture sector ............. 83
Figure 33 – The fish feed business segment value chain in Indonesian aquaculture sector ............ 85
Figure 34 – The processing business segment value chain in Indonesian aquaculture sector ......... 88

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Figure 35 – Mode of logistic in Indonesian aquaculture sector .............................................................. 91
Figure 36 – Permit license mechanism in Indonesia ................................................................................ 102
Figure 37 – Porter's Five Forces Analysis ...................................................................................................... 111
Figure 38 – The GE matrix on market attractiveness on each species ................................................ 118

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