Download - ASEAN Food Industry indonesia
ADHI LUKMAN
THE IMPACT OF AEC 2015 TO THE ASEAN FOOD INDUSTRYINDONESIA PERSPECTIVE
9/17/2011 1
FOOD INGREDIENTS ASIA
UBM (ASIA),
THAILAND, 21 SEPTEMBER 2011
Chairman of GAPMMI
(INDONESIAN FOOD & BEVERAGES ASSOCIATION)
F I Asia in Indonesia 2010
9/17/2011 2
The Indonesian Strategic Planning, The Indonesian Strategic Planning, Economy and F&B Industry
Development
FACTS: Indonesia is an Archipelago Country with strategic
geographic location and strong global presence Total land area Indonesia is around 1.922.570 km² and sea
area is around 3.257.483 km² Second biggest coastline in the world with 54.716 km. +/- 13.000 Islands 237.6 millions populations (SUSENAS 2010), with socio
economic level :12% high, 40% medium, 48% low class Average population growth within last 10 years 1,49 % Dynamic and youthful population (55% < 25 years old) 49.7 % Women, 50.3% Man (SUSENAS 2010) Population distribution : Java 57,49%, Sumatera 21,3%,
INDONESIA 2011
49.7 % Women, 50.3% Man (SUSENAS 2010) Population distribution : Java 57,49%, Sumatera 21,3%,
Sulawesi 7,31%, Kalimantan 5,8%, Bali /Nusa Tenggara5,5%, and Maluku/Papua 2,6% (SUSENAS 2010)
Estimates 30 millions Peoples have strong buying power 58% living in rural area and 42% in urban 87% Moslem: Hallal & Thoyyiban 480 ethnics Average expenditure for food per capita 45.69%(urban)
and 58.57% (rural), with average 50.62% (BPS, 2009) Rice as a main staple food Abundance of natural resources
3. STRATEGIC GEOGRAPHIC LOCATION…
Indonesia lies strategically in the intersection of the Pacific Ocean, along the Malacca Straits and the Indian ocean
Over half of all international shipping travel through Indonesian waters
Leading ASEAN
The only country in South-east Asia that is a member of G-20
Chairman of ASEAN in 2011
An active and strong voice of developing countries in global discussions on issues around climate change, global economy architecture, etc.
Source: Supply Chain Leaders
ASEAN
THE NEW VISION OF INDONESIAGovernment set a Master Plan to accelerate economic development, called MP3EI
(The Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development). And targeted to be 12 largest in the World in 2025.
Stepping up to Global Influence....
~ 12 largest ~ 12 largest
~ 8 largest ~ 8 largest
8 – 9 % per annum 5 – 6 % per annum
LOGICAL
ACTION PLAN(up to 2014)
The Action Plan strategy
LOGICAL FRAMEWORK
OF THE MASTERPLAN
22 Main
F & B
F&B is one of the main economic activities in MP3EI framework
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22 Main Economic Activities
FRAMEWORK OF GROWTH STRATEGYFRAMEWORK OF GROWTH STRATEGY
FEED INDONESIA - FEED THE WORLD
Sustainable National Food SecuritySustainable National Food Security
Rice, Soybean,Corn, Sugar
Palm Oil, TeaCoffee, Cocoa
Mango, Orange, Banana andHorticulture
Cattle andPoultry
Tuna andShrimp
Foreign ExchangeForeign Exchange&&
Labor ForceLabor ForceFood SelfFood Self--sufficiencysufficiency
Main Commodity
Grand StrategyDevelopment of Agriculture Sector Into a Competitive and
In line with Government Strategy, Indonesian Chambers of Commerce & Industry (KADIN) set a grand strategy called FI-FTW
9
Increase Value Added & Marketing
• Develop Domestic and Export Markets
• Build Indonesia’s Product Image and Manage the Non- Tariff Barrier
• Develop Downstream Industry
Funding• Support the Agriculture
Sector• Establish an Agriculture
Bank• Strengthen the non
Banking Institutions(Cooperatives & LKM)
Panning Improvement• Improve the Spatial Planning • Develop the Infrastructure• Focus on Prime Commodities /
Developthe Competitiveness
Increase Productivity• Develop Natural Resources and
Competent Human Resources• Develop and Implement Eco Green
Technology and R & D• Provide access to the Technology
• Harmonization and Synchronization of Policies (Focused, Brief, Clear, Direct and Consistent)• Roadmap (Integrated Upstream – Downstream, Focus on Superior Products With High Value Added)
• Accurate and Updated Data Management
Development of Agriculture Sector Into a Competitive andSustainable Self- Sufficiency and Promotion of thePrime Commodities to Become the World’s Choice
2007 2008 2009 2010 2011* 2012*GDP gowth (y-o-y, %) 6.3 6.0 4.5 6.1 6.5** 6.7***Nominal GDP (current prices (Rp trillions) 3,951 4,949 5,604 6,423 7,019 8,373***
GDP per capita (current prices, US$) 1,938 2,270 2,590 3,005 3,520 3,906
Population (mill) 225.6 228.5 231.4 237.6 243.7 249.0Open unemployment rate (%) 9.8 8.6 7.9 7.6 7.0 6.7***
Inflation rate (%, year end) 6.6 11.2 2.8 7.0 4.61*** 5.3***BI rate (%, year end) 8.00 9.25 6.50 6.50 6.75** 6.50
Key Strengths
Fiscal balance (% of GDP) -1.3 -0.1 -1.6 -1.0 -1.2 -1.5Public debt (% of GDP) 35.2 33.0 29.5 28.3 26.4 25.0
Currrency (Rp/US$, average) 9,163 9,756 10,356 9,080 8,514** 8,800***
Current account balance (% of GDP) 2.4 0.1 1.9 1.2 1.0 1.0
Reserves (US$ billions) 56.9 52.1 66.1 96.2123.2**
* 130.0S&P's Rating BB- BB- BB- BB BB+ BBB-
**Semester 1 – 2011***July 2011 (President speech 16 August 2011, RAPBN 2012) . Source: Bappenas, BPS
Steady GDP growth
5.56.3 6.1
4.56.1 6.5 5.7 6.2 5.8 6.5 6.56.5
06 07 08 '09 '10 est'11
Q1'10
Q2'10
Q3'10
Q4'10
Q1'11
Q2'11
Source: BPS, Bank of Indonesia
Passing GDP per capita USD 3000
Break USD 4000
Break USD 3000
86 87 88 89 90 91 92 93 94 95 96 97 98 99 '01 '02 '03 '04 '05 '06 '07 '08 '09 10 11 12 13 14
Break USD 1000
Break USD 2000
USD 3000
Source: BPS
Inflation is kept low
6.0 8.0
10.0 12.0 14.0 16.0 18.0
%
Food Material
Processed Food
General
January – July 2011 inflation rate at 4.61 %
9/17/20119/17/2011 1313Source: BPS, Kemenperin
-2.0 4.0 6.0
2005 2006 2007 2008 2009 2010
Year
General
Category % Output % Number of establishment
Big & Medium 86,79 0.52
F&B industry is dominated by Small and Home Industry (SME’s), however they only contributed less than 15%
Are they ready to survive in the competition of global market?
Small 5,69 5,71
Home Industry 7,52 93,77
Source : BPS, Sensus 2008
Year RP (Trillions)2007 402 2008 526,62009 586
F&B industry output is estimated at about USD 80 billion
OUTPUT F&B (BPS, estimated by GAPMMI):
2009 5862010 605
2011* 684
*Target, estimated growth 5 – 13 %
Industrial growth 2011 (y-o-y semester 1)
Sector Growth (%)
2005 2006 2007 2008 2009 2010 2011*
Economic Growth 5,69 5,50 6,35 6,01 4,58 6,10 6,49
Manufacturing industry 4.60 4.59 4.67 3.66 2.11 4.53 6.10
Non Oil & Gas Industry 5,86 5,27 5,15 4,05 2,56 5,09 6,61
F&B + Tobacco 2.75 7.21 5.05 2.34 11.29 2.73 9.34
Wood & Other Forest Industry (0.92) (0.66) (1.74) 3.45 (1.46) (3.50) 3.01
2011 F&B industrial growth estimated at 9.34%The sector that always kept positive growth within last 5 years
Source : BPS dan Kementerian Perindustrian
Wood & Other Forest Industry (0.92) (0.66) (1.74) 3.45 (1.46) (3.50) 3.01
Paper & Printing 2.39 2.09 5.79 (1.48) 6.27 1.64 3.87
Fertilizer, Chemicals & Rubber 8.77 4.48 5.69 4.46 1.51 5.17 6.62
Cement & Non-Metal Mineral 3.81 0.53 3.40 (1.49) (0.63) 2.16 5.66
Textile, Leather & Footwear 1.31 1.23 (3.68) (3.64) 0.53 1.74 8.03
Base Metal, Iron & Steel (3.70) 4.73 1.69 (2.05) (4.53) 2.56 15.48
Transport equipment, Machinery & Equipment 12.38 7.55 9.73 9.79 (2.94) 10.35 4.41
Others 2.61 3.62 (2.82) (0.96) 3.13 2.98 6.21
7,099
8,3577,498 7,775 8,129
8,542 8,1557,960
7,4628,085
7,4427,9167,632
6,7277,268 7,181
7,6777,198
Modern packaged food has grown double digit in 2011
Retail Audit: Indonesia Total Grocery | Food Department
8.8 8.4 9.6 9.8 11.78.2
11.8 12.47.1
1.5
12.7 10.9 13.9 10.9 11.9 10.8 11.9 13.3
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Sales Growth vs. Last Year Sales Value (in billion)
Source: Nielsen Indonesia
-0.4
12.8
4.3
4.4
6.3
16.5
5.76.8
7.0Volume Growth %
Value Growth %
Retail Audit: Indonesia Grocery | Top 10 | Volume & Value Growth % | Jan-Jun 2011 vs. YA
Instant Noodles
Powder Milk
Coffee
Biscuit
Detergent
F&B categories have been growing steady
4.4
21.3
3.8
5.3
-0.4
2.0
2.0
45.9
13.6
6.4
11.3
6.3
Value Growth %Detergent
Cooking Oil
Sweetened Condensed Milk
Shampoo
Toilet Soap
Skincare
Source: Nielsen Indonesia
11.0
-0.4
5.5
22.9
17.1
5.5
13.5
27.0
14.7
12.2
Volume Growth %
Tea-RTD
Liquid Milk
Snack
Toothpaste
Baby Diapers
Retail Audit: Indonesia Grocery | Top 20 | Volume & Value Growth % | Jan-Jun 2011 vs. YA
Convenient and Healthy categories grow faster
1.6
1.5
0.5
-6.9
1.9
-1.1
8.6
0.4
2.1
6.6
27.0
Value Growth %Stock Soup
Insecticides
Energy Drink
Non Powder Detergent
Cologne
Source: Nielsen Indonesia
Contribution by Sector in Manufacturing Industry 2005 – 2010 (%)
F&B manufacturing sector has increased contribution
Source : BPS, 2011
F&B and Tobacco
Investment Realization By Sector Year 2010 In Indonesia
Transportations, Storage &Telecommunications
(US$. billion)
Food Crops and Plantation
Food Industry
Transportations, Storage &Telecommunications
Electricity, Gas & Water Supply Other Services
Food industry is ranked 2nd in domestic investment realization and 5th in FDI realization
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Domestic Investment:Food Crops & Plantation (208 projects worth US$ 3,22 billion); Food Industry (46 projects worth US$ 1,84 billion);Transportations, Storage & Telecommunications (238 projects worth US$ 1,55 billion); Electricity, Gas & Water Supply (47projects worth US$ 0,55 billion); and Other Services (92 projects worth US$ 0,37 billion).
Foreign Investment:Transportations, Storage &Telecommunications (154 projects worth US$. 5.0 billion); Mining (298 projects worth US$. 2.2billion); Electricity, Gas & Water Supply (59 projects worth US$. 1.4 billion); Real Estate, Industrial Estate & Office Building(89 projects worth US$. 1.1 billion), and Food Industry (250 projects worth US$. 1.0 billion).
(US$ 1 = IDR 8.900,-)
(US$. billion)
Telecommunications
Mining
Electricity, Gas & Water Supply
Real Estate, Industrial Estate &Office Building
Food Industry
Source : BKPM
Domestic food industry has realized 1.7T IDR investment in Q1 2011 and higher investment in Q2 2011 - 2.9T IDR
Sector Q1 (Trillions Rp)/
%
Sector Q2(Trillions Rp)/ %
Transport, Storage & Communication
4.3/30.9 Food Crops and Plantation
3.1/ 16.6
Non Metal Mineral 2.3/ 16.7 Food Industry 2.9/15.2
9/17/2011 22Source : BKPM
Non Metal Mineral Industry
2.3/ 16.7 Food Industry 2.9/15.2
Food Industry 1.7/ 12 Paper & Printing Industry 2.7/ 14.1
Electricity, Gas, and Water
1.6/ 11.6 Metal, Machinery & Electronic Industry
1.9/ 10.3
Food Crops and Plantation
1.4/ 9.9 Transport, Storage & Communication
1.7 / 9
Others 4.3/ 30.9 Others 6.6/ 34.9
Sector Q1 (USD
Billions)/ %
Sector Q2(USD
Billions)/ %
Mining 1.0/ 23.2 Mining 1.5/ 31.5
Electricity, Gas, and Water
0.6/ 13.8 Chemical & Pharmaceutical industry
0.6/ 13.0
FDI Food Industry sector reached USD 0.3B in Q1 2011 and add USD 0.27B in Q2 2011
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Water Pharmaceutical industry
Transport, Storage & Communication
0.6/ 13.5 Metal, Machinery & Electronic Industry
0.5/ 11.4
Food Crops and Plantation
0.4/ 9.6 Transport, Storage & Communication
0.5/ 9.6
Food Industry 0.3/ 6.8 Trade & Repairs 0.4/ 7.9
Others 1.4/ 33.1 Others(Food Industry)
1.3/ 26.6(0.27/ 5.5)
Source : BKPM
OthersUS$ 2.2 B
Netherland$ 0.6 B
SingaporeUS$ 0.8 B
Singapore, Netherland and USA are top 3 foreign direct investor
JapanUS$ 0.4 B
USAUS$ 0.6 B
South KoreaUS$ 0.2 B
Source : BKPM
World Investment Prospects Survey 2008 –2012 of “the most attractive economies for the location of FDI” conducted by the United Nations Conference on Trade and Development (UNCTAD)
No. CountriesRatings (Period of Year)
2010-2012 2009-2011 2008-20101. China 1 1 12. India 2 3 23. Brazil 3 4 54. USA 4 2 35. Russia 5 5 46. Mexico 6 12 117. Inggris 7 6 128. Vietnam 8 11 6
9. Indonesia 9 9 8
Indonesia was ranked 9th as major destination for FDI. This result was based on UNCTAD survey whose respondents are
25
10. Germany 10 7 711. Thailand 11 n/a n/a12. Poland 12 13 1313. Australia 13 8 n/a14. France 14 14 1515. Malaysia 15 n/a n/a16. Japan 16 n/a n/a17. Canada 17 10 1018. Chile 18 n/a n/a19. South Afrika 19 n/a n/a20. Spain 20 n/a n/a
9. Indonesia 9 9 8 on UNCTAD survey whose respondents are executives of Transnational Corporations (TNC) from developed and/or developing countries. UNCTAD consists of 193 member economies or countries.
Source: World Investment Prospects Survey 2010 – 2012, UNCTAD
Key Challenges:Key Challenges:Natural resources potential, Changes in
Consumers habit & Market , Food Safety, Regulation & Trade Channel
Development
Indonesia has a huge potential resources of Agriculture Commodity. Position Rank in The World as follow:
Rank (in the World, by Quantity) Agro Commodity1 Kapokseed in Shell, Cloves ,Palm oil, Palm kernels, Kapok Fibre,
Cinnamon (canella), Coconuts Leeks, other alliaceous veg, Vanilla
2 Cocoa beans, Nuts nes, Beans green, Natural rubber, Pepper (Piper spp.)
3 Roots and Tubers nes, Rice paddy, Papayas, Sugar crops nes, Ginger , Other bird eggs,in shell
4 Manila Fibre (Abaca), Avocados, Pineapples, Coffee green, Chillies and peppers green, Sweet potatoes, Cassava, Mangoes, mangosteens, guavas, Fruit, tropical fresh nes
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mangosteens, guavas, Fruit, tropical fresh nes
5 Maize, Fruit Fresh Nes ,Spinach, Nutmeg, mace and cardamoms , Arecanuts
6 Bananas, Cashew nuts with shell, Tobacco unmanufactured, Eggplants (aubergines)
7 Tea , Indigenous Chicken Meat, Cabbages and other brassicas
8 Maize green, Groundnuts with shell , Hen eggs in shell
9 Indigenous Goat Meat10 Oranges, Cucumbers and gherkins, Beans dry, Mushrooms and
truffles, Indigenous Buffalo MeatSource: FAO Statistical Yearbook 2009
Commodity Target 2010(millions mTon)
Achievement 2010(millions mTon)
World Rank
Rice, paddy 34,9 36,3 3Corn 16,5 17,8 8Soybean 1,0 0,908*** 11White Crystal Sugar 3,3 2,7 3Refined Sugar 1,5 2,4 n.aCPO 23,6 19,8 1Tea 0,154 0,150 7Coffee 0,754 0,680 4Cocoa 0,855 0.661 2
Production of some potential commodities in Indonesia
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Cocoa 0,855 0.661 2Black Pepper n.a 0.022** 2Nutmeg n.a 0.0075** 1Chili n.a 1,3** 4Fruit & vegetable n.a 9,096 15Milk n.a 1,238 65Chicken meat n.a 1,527*** 7Hen Egg n.a 1,059*** 8Cow meat n.a 408 19Fish & Seafood 9,7 10,862 1 in South East Asia****
Based on FAO Statistical Yearbook 2009 , KADIN and other sources** estimated***FAO, 2009****SEAFDEC, 2008
However, still need to import some commodities to fulfill National requirement
COMMODITY +/- PER YEAR (MTON)*
WHEAT 4.669.475**
CORN 1.500.000
SOYBEAN 900.000
GREEN BEAN 300.000
CASSAVA (dried) 900.000
GROUNDNUTS 195.000
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GROUNDNUTS 195.000
MILK 2.700.000
BEEF 75.000
Raw Sugar 2.400.000
SALT for consumption(depend on seasons)
775.011**
*estimated**2010
The Global Competitiveness Index 2010-2011 rankings and 2009-2010 comparisons (139 Countries)
Unfortunately, Indonesia GCI in the # 54 of 139 Countries in the year 2010/2011, even better than year
© 2011 World Economic Forum
even better than year 2009/2010.Challenges for Indonesia to improve competitiveness
Indonesia in rank # 5 within ASEAN
The Global Competitiveness Index 2010-2011 rankings Within Developing Asia & ASEAN
9/17/2011 31
© 2011 World Economic Forum
••INFORMATION ERA INFORMATION ERA (CONNECTED & TECHNOLOGY)(CONNECTED & TECHNOLOGY)
••EDUCATIONEDUCATION••SOCIAL STATUS & LIFE STYLESOCIAL STATUS & LIFE STYLE
“New Consumerism”“New Consumerism”Point of Point of
view/food view/food
Challenges ahead for food industry is that market & consumer is changed
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••SOCIAL STATUS & LIFE STYLESOCIAL STATUS & LIFE STYLE“New Consumerism”“New Consumerism”••HEALTH CONCIOUSHEALTH CONCIOUS
••RELIGIOUSRELIGIOUS••DISTRIBUTIONDISTRIBUTION••CONVENIENCECONVENIENCE
view/food view/food valuevalue
Digital technology change all aspect of life styleDigital technology change all aspect of life styleEvery incident quickly known around the world Every incident quickly known around the world Consumers behaviorsConsumers behaviors
Some cases in food business:Some cases in food business:••Dioxin , Dioxin , Ukrainian Presidential candidate (2004)••Melamine case in China (2008)Melamine case in China (2008)•PDMS and TBHQ (anti-foaming agent) Mc-nugget in China (2010)••Nitrite milk scandal in China (2011)Nitrite milk scandal in China (2011)
TREND INFORMATION ERA With digital/communication technology development will make the world to be more
connected
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••Nitrite milk scandal in China (2011)Nitrite milk scandal in China (2011)••EHEC cucumber in Germany (2011)EHEC cucumber in Germany (2011)••DEHP in Food Products Taiwan (2011)DEHP in Food Products Taiwan (2011)
EE--purchase, epurchase, e--procurement & eprocurement & e--trade change marketing system trade change marketing system accelerating accelerating order process & salesorder process & sales
Digital promotion , website, Hoax ,etcDigital promotion , website, Hoax ,etc boosting sales & knowledge boosting sales & knowledge . But, . But, sometimes also spread misleading information (black campaign) quickly and will sometimes also spread misleading information (black campaign) quickly and will impact to sales impact to sales
EDUCATION, SOCIAL STATUS & LIFE STYLE, HEALTH CONSCIOUS & RELIGIOUS:EDUCATION, SOCIAL STATUS & LIFE STYLE, HEALTH CONSCIOUS & RELIGIOUS:More educated, wellMore educated, well--knowledge knowledge higher desirehigher desireHigher social status & lifestyleHigher social status & lifestyle higher demand of high end product higher demand of high end product “new consumerism”“new consumerism”More health conscious More health conscious promotion claim:promotion claim:
•• High fiber, High fiber,
Education changed lifestyle
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•• High fiber, High fiber, •• Low cholesterol, Low cholesterol, •• Added vitamin, mineral, OmegaAdded vitamin, mineral, Omega--3, etc3, etc•• Nutrition FactsNutrition Facts•• Functional food Functional food
Higher Higher awareness of religiosity awareness of religiosity Hallal, etcHallal, etcAwareness of Food SafetyAwareness of Food SafetyThen, food business is regulated more strict in all over the world. More developed Then, food business is regulated more strict in all over the world. More developed
the country, more strict the regulationthe country, more strict the regulation
“New consumerism”
Willingness to pay little extra for quality as a force that encourages product differentiation and thereby feeds investment in production and thereby feeds investment in production and
marketing of new goods
Murphy, Shleifer and Vishny (1989)
Source: The Rise of Asia’s Middle Class
Educated Consumers are more aware of Packaging label
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Nutrition Facts
Hallal
Waste concerned
Even though
•Delicious
•High Nutrition
If Not SafeNo Value
Challenges on Food Quality and Safety
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•Food Safety•Quality Standard •Healthy & Functional Food•Back to Nature •Food Additives concern•Label•Hallal/ Khouzier•Convenience
Local & Global Trade
consideration
garbage
Concerning about Quality & Food Safety Integrated System (Traceability)
HACCPProduction
facility
Farming Post Harvest’shandling
Processing Distribution Market Consumer
FROM FARM
FROM STABLE
TO FORK
TO TABLE
3838
Notes : HACCP = HAZARD ANALYSIS CRITICAL CONTROL POINTGFP = Good Farming Practices GDP = Good Distribution PracticesGHP = Good Handling Practices GRP = Good Retailing PracticesGMP = Good Manufacturing Practices GCP = Good Catering Practices
handling
GFPGHP
GMP GDP GRP GCP
Harvest Post Harvest
Mutual Recognition Arrangement (MRA)Pre Harvest
•• Low quality raw materialLow quality raw materialLow qualityLow quality
Careless handling, etcCareless handling, etc
••Low processing cond.Low processing cond.choosing low materialchoosing low material
bad sanitationbad sanitationlow processing, handling,etclow processing, handling,etc
Food Safety Critical Point
Management
SAFE VS COST
3939
••Bad packagingBad packagingchoose wrong pack choose wrong pack
bad packaging process,etcbad packaging process,etc
•• Bad storage/ distribution/ retailBad storage/ distribution/ retailbad temperature controlbad temperature control
bad humidity controlbad humidity controlbad handling,etc.bad handling,etc.Food Safety
SAFE VS COST
Food Safety
People’s Welfare
Food Safety is important with higher Socio Economic Status
Developed Countries have talked about Food Safety , while some other Underdeveloped
Countries still talking about Food Availability
Transformation of the social status will encourage the
business potential
Indonesia status?ASEAN status?
Food Availability
Food Acceptability
Food Accessibility
business potential
Indonesian Middle Class has grown 50 million since 2003 to become 131 million people in 2010
ClassExpenditure 2003 2010
(US$ per day) (%) population (%) population
Low < $ 1,25 21.9 14.0 $ 1,25 – $ 2 40.3 29.3
Middle
$ 2 - $ 4 32.1
37.6
36.5
54.5$ 4 - $ 6 3.9 11.7 $ 6 - $ 10 1.3 5.0
$ 10 - $ 20 0.3 1.3 High > $ 20 0.1 0.2
"The Rise of Asia's Middle Class 2010" by ADB : within last 10 years, middle class growth very fast from 25% or 45 millions in 1999 to become 42.7% or 93 millions in 2009.
While poor people decreased from 171 millions to 123 millions.
By 2025, Indonesia will be among six major emerging economies to account for more than half of all global growth, says a new World Bank report. Other emerging economies include Brazil, China, India, South Korea, and Russia, and as economic power shifts, these countries will help drive growth in lower income countries through more commercial and financial transactions. With a growing middle class in developing countries, consumption trends are likely to strengthen, and eventually become a source of sustained global growth
Source: Susenas, BPS, World Bank report 2011High > $ 20 0.1 0.2
DISTRIBUTION, CONVENIENCE :DISTRIBUTION, CONVENIENCE :Consumers demand more quick services, comfortable & convenience storeConsumers demand more quick services, comfortable & convenience store
Growth of modern market is higher than traditionalGrowth of modern market is higher than traditionalYoung family , small family, & working people Young family , small family, & working people changing habits of changing habits of
consumptionconsumptionChanging Changing style & size of packagingstyle & size of packaging
Lifestyle changes demand a change in product, services and distribution system, etc.
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Indonesia market is dominated by traditional stores and both are growing in numbers
Shop type Universe 2010
Hypermarket 154Supermarket 1,076Minimarket 16,922Impulse 108,567Provision stores 2,297,592
Pasar Food Prep 12,936
Pasar RTC 6,134Semi Retailer 55,120
Source: Nielsen Indonesia
82.9 82.1 81.5 80.7 80.4 80.8 79.8 76.2 74.5
Trade Channel Contribution | Total 56 Categories – including cigarette
However in term of sales value, modern contribute to about 25% of the market
17.1 17.9 18.5 19.3 19.5 19.3 20.2 23.8 25.5
2002 2003 2004 2005 2006 2007 2008 2009* 2010*Traditional Stores Modern Stores
17.1%
25.5%
*55 Cats (Jaguar) + Cigarette (Legacy)
Source: Nielsen Indonesia
YTD 2011 modern channel is still driver of the growth of total market
11.1Total
Indonesia
Trade Channel Value (Rp) Growth | Total 55 Categories | YTD 2011 vs. YA
8.2
15.6ModernTrade
TraditionalStores
Source: Nielsen Indonesia
Modern Trade/Mini MarketTraditional Market
FMCG is shifting to modern distribution
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Traditional MarketOld Style
Traditional MarketNew Style
Modern Market
However for fresh food, the wet market is still a preferred channel by consumer
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•The art of purchase with bargain•Interaction Seller - Buyer More hygienic, convenience Fixed Price
Some of Modern Super Market/ Hypermarket in Indonesia
Foreign investor enter to Indonesian
market because of potential
market. Indonesia is #4
largest
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largest population in
the world.
Soon, Metro Germany will
enter to Indonesia
market
Traditional Modern / Global
Modern premise may influence but not necessary eliminate traditional
Lifestylefor
modern Young
generation
9/17/2011 49
generation
24 hours Mini Market is combined 24 hours Gasoline Station with Mini
A New Trend, new demandmore convenient &services for Consumers
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24 hours Mini Market is combined with Café shop (upstairs)
24 hours Gasoline Station with Mini Market
24 hours with Wi-Fi services
INDONESIA REGULATION ,RELATED TO FOOD INDUSTRY, QUALITY & FOOD SAFETY
UU No. 2/ 1966 : Hygiene Law UU No. 2 /1981 : Metrology Law Decree of Ministry of Health 722/Menkes/Per/88: Food Ingredients UU No. 7 /1996 : Food Law UU No. 8 /1999 : Consumer Protection Law PP No. 69/1999 : Label & Advertisement PP No.102/2000 : National Standard UU No. 18 /2002 : National System for Research & Development and Technology Law Decree of Ministry of Industry & Trade No.753/MPP/Kep/11/2002: Monitoring SNI Local Government Decree DKI No.8/2004: Food Safety PP No. 28/2004 : Food Safety, Quality & Food Nutrition PP No. 68/2004 : Food Security
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PP No. 68/2004 : Food Security SK Ka. BPOM nomor 11/ 2004 : General Guidance for Food Labeling Decree of Ministry of Industry RI 24/M-IND/PER/5/2006 : Production Monitoring & the Usage of
Hazardous Material for Industry UU N0. 18/2009 : Livestock & Animal health Per Ka BPOM No. HK.00.06.1.52.4011 28Oct09 : Determination Limit of Microbial and chemical
contaminants in food UU No. 36/2009 : Health Law Decree of Ministry of Industry 24/M-IND/Per/2/2010: Tara Code on Food Label and Plastic
Packaging Recycling Decree of Ministry of Industry 75/M-IND/PER/7/2010: Mandatory of GOOD MANUFACTURING
PRACTICES SE Ka. BPOM HK.05.01.1.52.09.10.8502 : Application of Food Label Terms Regulation from Ministry of Trade (Trade Goods Monitoring)RECALL Regulation from Ministry of Agriculture, Ministry of Fishery & Marine Affairs (S & P, etc)
1. Liability to obtain Distribution Licenses from BPOM/NADFC* (before selling to market) :A. No MD : For Domestic ProductB. No PIRT : For Domestic Product (SME’s)C. No ML : For Import Product
2. Mandatory use Label in Bahasa Indonesia3. HALLAL : Voluntary 4. Market Monitoring/Control:
A. BPOM (National) & Balai POM (Province & District)B. Direktorat Pengawasan Barang Beredar (Ministry of Trade)C. Tim Terpadu Pengawasan Barang Beredar (Tim TPBB) (Trade Minister Decree No:
780/M-DAG/KEP/10/2008. (Task Force to control Goods in Market)
Protection for Consumers
*NADFC = National Agency of Drug and Food Control
1. Trade Minister Decree No. 56/2008 , jo. No. 60/2008, jo. No. 23/2010 : Import Product under Control (including Food Product) through Specific Port (Belawan ,Medan; Tanjung Priok ,Jakarta; Tanjung Emas ,Semarang; Tanjung Perak, Surabaya; Soekarno Hatta , Makassar; Dumai, Dumai; Jayapura and Internasional Airport). Expired 31 December 2010 and extended by
2. Trade Minister Decree No.57/2010 (expired 31 December 2012) 3. Trade Minister Decree No.54/M-DAG/PER/10/2009 , 45/M-DAG/PER/9/2009, 17/M-
DAG/PER/3/2010 (Import Requirement :API, IT, IP, etc)
Import Monitoring
Towards Global Market & AEC 2015
EVOLUTION OF TRADE IN THE WORLD
Global Condition of Food Trade:• Borderless• Less Tariff Barrier • More non-tariff barrier/measure on Food safety and quality • Food Regulation as a protection to Consumers & Local Industry• Product competitiveness is depend on how to manage Food Safety as an
advantage to the market
Global Condition of Food Trade:• Borderless• Less Tariff Barrier • More non-tariff barrier/measure on Food safety and quality • Food Regulation as a protection to Consumers & Local Industry• Product competitiveness is depend on how to manage Food Safety as an
advantage to the market
expanding to Eastern Europe
Main Regional FTANAFTAPopulation: 445 millionGDP: US$15.857 trillion
EUPopulation: 491 millionGDP: US$ 14.38 trillion
CHINA Population: 1.330 billion GDP PPP: US$ 6.991 trillion
JAPANPopulation: 127 million GDP PPP: US$ 4.29 trillion
FTA Canada – Chile 1997FTA : Chile – Mexico 1999FTA : USA – Chile 2004FTA : USA – Singapore 2004FTA : USA – Australia 2005FTA : Mexico – Japan 2005FTA : Chile – Brunei – NZ –Singapore 2006
NAFTAU.S.A.,
Canada,Mexico ASEAN-Japan
Comprehensive
Japan-Korea FTA(under negotiation)
Japan-Mexico EPA(signed agreement)
EU-MEXICOFTA
EU27 countries
ACP-EUCountries in Africa
Japan-Korea-China FTA (under negotiation)
expanding to Latin America
Source : CIA Factbook (2007)
ASEANPopulation: 575.5 millionGDP: US$ 3.431 billion
MERCOSURArgentina, Brazil,
Paraguay, Uruguay
FTAA(by 2005)
under negotiation SAPTABangladesh, Bhutan,
India, Maldives,Nepal, Pakistan, Sri
Lanka
China - ASEAN FTA
Comprehensive Economic Partnership
(AJCEP)
Japan’s Bilaterals:• Japan-Singapore EPA • Japan-Philippines EPA• Japan-Thailand EPA• Japan-Malaysia EPA• Japan-Indonesia EPA
AFTAIndonesia, Malaysia,
Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar, Cambodia
India - ASEAN FTAII – CECA
Countries in Africa and the Caribbean
(approx. 70 countries)Japan-
Mexico EPA(signed agreement)
Australia-New Zealand-ASEAN FTA
Korea - ASEAN FTA
Source : CIA Factbook (2007)
Bilateral Negotiation and Preparation (in progress)
1. Indonesia - EFTA
President RI and President
Switzerland, July 8th 2008
2. Indonesia – India
President RI – President of India,
Jan 2011
1. Trade in Goods (TIG)
2. Rules of Origin (ROO)
3. Trade Remedies
4. Trade in Services (TIS)
5. Intellectual Property Rights (IPR)
5656
3. Indonesia – Australia
President RI and President of
Australia, Nov 2nd 2010
4. Indonesia – EU
President RI and President of EU
Commission, Dec 2009
6. Government Procurement
7. Technical Cooperation / Capacity
Building
8. Other Issues
9. Legal Text
AEC 2015
Single market and
production base
Highly competitive
region
Region of equitable economic
development
Integration into the global
economy
POPULATION 0F ASEAN PLUSinto one big region, will transform market to be a huge potential in the world
(more than 50% of population in the world)
Rank Country / Territory Population Date of estimate % of World population Source
4 Indonesia 237,556,363 May 2010 3.42% 2010 Indonesian Census
12 Philippines 94,013,200 Mid-2010 1.35% National Statistics Office medium projection
13 Vietnam 87,375,000 2011 1.26% Official estimate
19 Thailand 67,041,000 July 1, 2010 0.97% Key Statistics of Thailand, 2009,
(Population projections). National Statistics Office of Thailand
26 Myanmar 47,963,000 2010 0.73% UN estimate for 2010
44 Malaysia 27,565,821 2010 0.4% The 2010 Population and Housing Census (Census 2010)
1 Chinan2 1,339,724,852 November 1, 2010 19.3% 2010 China Census
2 India 1,210,193,422 March 1, 2011 17.44% Provisional 2011 Indian Census result
10 Japan 127,950,000 June 1, 2011 1.84% Official Japan Statistics Bureau
25 South Korea 48,988,833 2011 0.71% Statistics Korea
51 Australian5 22,688,987 August 26, 2011 0.33% Australian Official Population Clock
123 New Zealand 4,414,700 August 26, 2011 0.064% Official New Zealand Population clock
44 Malaysia 27,565,821 2010 0.4% The 2010 Population and Housing Census (Census 2010)
69 Cambodia 13,395,682 March 3, 2008 0.19% Cambodian 2008 Census
104 Laos 6,230,200 2010 0.09% Official estimate
116 Singapore 5,076,700 June 30, 2010 0.073% Statistics Singapore
173 Brunei 399,000 2010 0.006% UN estimate for 2010
Rank Country GDP (millions of USD)
— World 62,909,274
— People's Republic of China 5,878,257
— Japan 5,458,872— South Korea 1,007,084— ASEAN 1,843,8461 Indonesia 706,7352 Thailand 318,850
List of ASEAN countries GDP (nominal), International Monetary Fund 2010 estimates.
Contribution of ASEAN Plus:
29.60 % of the World GDP
9/17/2011 59
2 Thailand 318,8503 Malaysia 237,9594 Singapore 222,6995 Philippines 188,7196 Vietnam 103,5747 Burma 35,6468 Brunei 11,9639 Cambodia 11,36010 Laos 6,341
Huge Potential
NEGARA Total Jan - Des 2010 % Total Jan - Juni
2010 % Total Jan - Juni 2011 %
Perubahan total Jan -Mei 2011 vs Jan - Juni
2010 (%)SINGAPORE 18,594,124.95 8.61% 7,557,698.96 7.76% 8,885,102.96 7.89% 17.56%MALAYSIA 36,560,417.14 16.92% 15,805,997.71 16.24% 27,817,515.12 24.70% 75.99%THAILAND 34,263,024.06 15.86% 14,069,305.50 14.45% 11,470,218.87 10.18% -18.47%VIETNAM 806,493.46 0.37% 167,311.81 0.17% 1,444,108.13 1.28% 763.12%PHILIPPINES 10,124,127.46 4.69% 5,254,819.12 5.40% 6,604,477.15 5.86% 25.68%
Import of Packaged Food Product through Special Port Zone.
Unfortunately, data showed that import value is increased significantly
9/17/2011 60
PHILIPPINES 10,124,127.46 4.69% 5,254,819.12 5.40% 6,604,477.15 5.86% 25.68%sub total 100,348,187.07 46.45% 42,855,133.10 44.02% 56,221,422.23 49.91% 31.19%CHINA 31,121,990.92 14.40% 15,086,438.47 15.50% 14,506,477.82 12.88% -3.84%HONGKONG 8,073,001.67 3.74% 4,019,169.73 4.13% - 0.00% -100.00%sub total 39,194,992.59 18.14% 19,105,608.20 19.63% 14,506,477.82 12.88% -24.07%NEGARA LAINNYA 76,508,033.60 35.41% 35382502.49 36.35% 41,910,527.14 37.21% 18.45%TOTAL 216,051,213.26 100.00% 97,343,243.79 100.00% 112,638,427.19 100.00% 15.71%
Source : Kemendag
No. COUNTRYExport Import
2010 Jan-May 2011 2010 Jan-May 2011Value (US$) Value (US$) Value (US$) Value (US$)
1BRUNEI DARUSSALAM 10,058,998 5,481,151 0 0 2CAMBODIA 173,427,484 76,937,038 684,169 217,800 3LAO 0 0 0 0 4MALAYSIA 881,372,960 383,393,955 301,014,176 156,217,386 5MYANMAR 1,887,581 2,362,399 0 0 6PHILIPPINES 290,964,189 100,154,459 16,129,712 10,012,868 7SINGAPORE 280,046,449 101,187,340 68,544,628 29,956,561
Trade value is still very small compared to its potential
All F&B Trade between INDONESIA - ASEAN
9/17/2011 61
7SINGAPORE 280,046,449 101,187,340 68,544,628 29,956,561 8THAILAND 105,898,492 53,510,761 625,369,913 501,344,088 9VIET NAM 93,159,927 36,941,605 6,816,953 5,639,511
Total 1,836,816,080 759,968,708 1,018,559,551 703,388,214
Source: BPS, calculated by Ministry of Trade
•Still plenty of ROOM to improve Trade and exploit the Potential•Keep developing new product & innovation to produce Added Value Product, exotic, etc. Thus this kind of exhibition is valuable to be visited , exploring new items , more competitive items substitution, etc.
PROCESSED FOODS ITEMS IMPORTED BY INDONESIA FROM ASEAN 2006-2011 (as of 23 Aug 2011)
Malaysia products dominate the products imported in IndonesiaFood Category PHIL MAL SIN THAI VIET TOTAL ASEAN*
1. Dairy products and analogues 34 187 47 44 2 314
2. Fats, oils and Fat emulsions - 39 68 4 - 111
3. Edible ices - 22 - 1 - 23
4. Fruits and vegetables 6 172 112 259 1 550
5. Confectionery 37 788 44 152 17 1,038
6. Cereals and cereal products 43 1,362 157 232 16 1,810
7. Bakery wares - 1 3 - 1 5
62Source: BPOM, 2011
7. Bakery wares - 1 3 - 1 5
8. Meat and meat products - 90 19 - 8 117
9. Fish and fish products 1 186 33 76 2 298
10. Eggs and egg products - - - - - -
11. Sweeteners, including honey 11 9 3 2 - 25
12. Salts, spices, soups, sauces, salads, protein products 4 260 202 120 14 600
13. Foodstuffs intended for particular nutritional uses 15 35 5 17 - 72
14. Beverages, excluding dairy products 21 687 287 89 6 1,090
15. Ready-to-eat savouries 7 458 79 190 7 741
16. Composite foods 3 8 27 - 2 40
TOTAL FOOD ITEMS IMPORTED 182 4,304 1,086 1,186 76 6,834
PROCESSED FOODS ITEMS IMPORTED BY INDONESIA From ASEAN & Other Countries 2006-2011 (as of 23 Aug 2011; BPOM, 2011)
ASEAN product take portion of 32.92 %Food Category ASEAN Others Total
1. Dairy products and analogues 314 575 889
2. Fats, oils and Fat emulsions 111 383 494
3. Edible ices 23 27 50
4. Fruits and vegetables 550 1,453 2,003
5. Confectionery 1,038 1,841 2,879
6. Cereals and cereal products 1,810 3,035 4,845
7. Bakery wares 5 4 9
63
7. Bakery wares 5 4 9
8. Meat and meat products 117 101 218
9. Fish and fish products 298 159 457
10. Eggs and egg products - 4 4
11. Sweeteners, including honey 25 118 143
12. Salts, spices, soups, sauces, salads, protein products 600 1,283 1,883
13. Foodstuffs intended for particular nutritional uses 72 175 247
14. Beverages, excluding dairy products 1,090 3,816 4,906
15. Ready-to-eat savouries 741 744 1,485
16. Composite foods 40 209 249
Total Food Items imported 6,834 13,927 20,761
(%) 32.92 67.08 100.00
Trade
Value US$
2006 2007 2008 2009 2010JAN-MAR
10JAN-MAR
11
Export5,100,866 9,201,490 8,318,669 10,183,313 20,961,439 3,473,220 3,476,354
Export – Import F&B Product between Indonesia - China
Comparing with ASEAN. The trade value Indonesia -China is smaller than it’s potential
9/17/2011 64
5,100,866 9,201,490 8,318,669 10,183,313 20,961,439 3,473,220 3,476,354Import
59,304,091 65,719,433 84,002,073 45,095,424 60,183,481 12,699,837 9,963,402
Source: BPS (calculated by Data Centre Ministry of Trade)
During his visit to Indonesia last April, Excellency PM Wen Jiabao talked about trade relations between Indonesia - China in the context of ACFTA: “Strengthen Good-Neighbourly Relations and Deepen Mutually Beneficial Cooperation”. “Entering the new century, our two countries have enjoyed frequent high-level exchanges, deepening political mutual trust and fast growing business cooperation. The establishment of the strategic partnership in 2005 brought our bilateral relations to a new stage. Last year, two-way trade approached 43 billion U.S. dollars, making China one of Indonesia’s major trading partners and export markets”
ASEAN Balance of trade with selected trading partner countriesASEAN trade with China has always been in deficit, also with Japan before turning into a modest surplus in 2006 & 2007. On the other hand, ASEAN has maintained trade surplus with theUSA,EU25,Australia,NewZealand,India,Canada and Pakistan since 1998.
65Source: ASEAN Secretariat (2010)
Intra and Extra Trade ASEANAbout 25% trade is Intra-ASEAN. Means , ASEAN is still more trade dependence with Extra-ASEAN. Hope to bigger trade Intra-ASEAN after AEC
66
Source : http://www.aseansec.org/22073.htm,
ASEAN Economic Minister Meeting
ASEAN Senior Economic Official Meeting (SEOM)
ASEAN Consultative Committee on Standards and Quality (ACCSQ)
WG 1 WG 2 WG 3 JSC EE MRA ACC PPWG PFPWG APWG TMHSPWG
To prepare Single Market & Production Base in AEC 2015, ASEAN formed ACCSQ Structure to evaluate all aspect trade,
and PFPWG for food & foodstuff has been formed
WG 1
Working Group on Standards
and Mutual Recognition
Arrangements (MRAS)
WG 2
Working
Group Accreditatio
n and Conformity Assessment
WG 3
Working
Group on Legal
Metrology
JSC EE MRA
Joint Sectoral Committee for
ASEAN Sectoral MRA for Electrical
and Electronic Equipment
ACC
ASEAN Cosmetic
Committee
PPWG
Pharmaceutical Product Working
Group
PFPWG
Prepared Foodstuff
Product Working
Group
APWG
Automotive
Product Working
Group
TMHSPWG
Traditional Medicines and Health
Supplements
Product Working
Group
WBPWG
Wood-Based
Product Working
Group
RBPWG
Rubber-Based
Product Working
Group
MDPWG
Medical Devices
Product Working
Group
9/17/2011 67
Aspect to be Identified: • Food Safety• Labeling• Registration• Hallal• Specific Requirements
HARMONIZATION & STANDARD IN ASEAN TOWARDS AEC 2015
1st Commodity Priorities 2nd Commodity Priorities
•HS 1704; GSFA 05.2, 05.2.1, 05.2.2, 5.2.3, 05.4
•HS 1904; GSFA 06.3, 06.7•HS 2007; GSFA 04.1.2.5
•HS 1702 ; GSFA 11.2•HS 1704; GSFA 05.3•HS 1805; GSFA 05.1.1•HS 1903; GSFA 06.0, 06.2.1, 06.2.2•HS 1905; GSFA 07.0, 07.1, 07.1.1, 07.1.1.1, 07.1.1.2,
07.1.2, 07.1.3, 07.1.4, 07.1.5, 07.1.6, 07.2, 07.2.1, 07.2.2, 07.2.3
•HS 2001; GSFA 04.2.2.3, 04.1.2.3
1st & 2nd Commodity Priority have been decided to implement ASEAN Standards
9/17/2011 68
•HS 2001; GSFA 04.2.2.3, 04.1.2.3•HS 2006; GSFA 04.1.2.6; 04.1.2.5 (except nuts), 04.1.2.7,
04.1.2.11•HS 2008; GSFA 04.1.2.2 (Except nuts and sweetening
matter)•HS 2101; GSFA 14.1.5 (excluding cocoa)•HS 2103; GSFA 12.6
Harmonization of Food Standard will impact to Food Business (especially to SME’s) & Consumer’s behavior
Conclusion Indonesia in AEC 2015
Actions to improve
IndonesiaMarket
Potential
• Indonesia is strategic, with stable economic growth. •Potential , with GDP growth and Population•Potential for investment , to optimize natural resources and produce Added Value
Product•F&B industry kept positive growing . In terms of number establishment, is
dominated by SME’s, but value by Big – Medium enterprises•Market is dominated by Traditional market but Modern trade is growing faster•Middle class has grown fast
Business Potential
9/17/2011 70
Consumers
•Consumers will potentially change to increase the business•More educated & changed Life style •“New consumerism”•More concerned about Food safety & Health•Hallal concerned (more religious)
AEC 2015
• Trade Intra-ASEAN is smaller than Extra-ASEAN• Huge potential because of natural resources, Population &
GDP (including ASEAN Plus)• Optimizing business & sources potential for mutual benefit• Expanding INVESTMENT to explore Huge Natural
Resources , combining with Advanced Technology owned by ASEAN Countries to produce more VALUE ADDED PRODUCT, as a basis production to be more competitive in
WHAT TO DO INDONESIA in ASEAN
9/17/2011 71
AEC 2015PRODUCT, as a basis production to be more competitive in global market
• Improving Trade Value and open for more MARKET ACCESS • Need more understanding and tolerance about standard &
procedures. Trying to harmonize & standardize to be a Production base & Single Market
Cooperationamong
• Need to build MRA to reduce Trade Barriers• Eliminating NON-TARIFF MEASURE as much
as possible , without ignoring FOOD SAFETY Standard
• Economic Partnership to minimize constraint of social status differences/gap, especially SME’s in the Country
WHAT TO DO INDONESIA in ASEAN
9/17/2011 72
amongCountries
especially SME’s in the Country• CAPACITY BUILDING for SME’s Industry to
understand about global market, standard, and market integration
NEED A CLOSER COOPERATION INDONESIA – ASEAN towards
AEC 2015
73739/17/20119/17/2011