Case Study of Agribussiness Agent In Indonesia

Profile:

• Name : Pasifik Agro Sentosa, Ltd
• Category         : Private company
• Focus : Palm oil industry and refined sugar. 
• Motto : Go Sustainable Forever

Total land owned : +108,000 ha, consist of:

• 53.733 ha planted
• 7.238 ha ready for planting
• 9.632 ha prepared for future development of oil palm plantations 
• 27.600 ha prepared for the sugar cane plantations. 

Production sites:

• 3 Oil palm plantations in North Sumatra
• 1 Oil palm plantation in South Sumatra
• 1 Sugar mill in Banten
• 4 Oil palm plantations in West Kalimantan
• 1 Sugar cane plantation and sugar mill in West Kalimantan
• 2 Sugar cane plantation and sugar mill in Southeast Sulawesi

In total, 

Palm oil processing capacity: 225 Mt of FFB (fresh fruit bunches) /hour. 

Sugar refining capacity: 400,000 Mt/year.

International Certification:

• Certified in international palmoil certification: Oil Palm Refiners Association of Malaysia (PORAM)

The analysis consist of:

• Fatty Acids Free
• Moisture and impurities
• Iodine Value
• Dobi, and
• Carotene. 

Another certification:

• ISO 9001 for quality management,
• ISO 14001 for environmental management systems
• ISO 22000 for food safety
• OHSAS 18001 for occupational health & safety
• SNI for quality refined sugar

With this quality standard, they are confident to expand they market in the coming years.

Principle:

PT PAS adopted the principle of 3P (Profit, People and Planet)

Corporate Social Responsibillity (CSR):

• Actively implementing conservation by setting approximately 10,000 hectares or almost 20% of the owned area for conservation purposes. 
• Implement Conservation Area Management Programme in cooperation with:
• FFI (Fauna & Flora International)
• USAID-IFACS (United State Agency for International Development - Indonesia Forest and Climate Support) and the direction of BKSDA (Natural Resources Conservation Board).
• Since 2005, initiated a program called the Community Development Program, which is manage the social welfare of society and empower local communities. 
• Member of the RSPO (Roundtable on Sustainable Palm Oil). 

ANALISYS

Strength Factors Identification:

• Enviroment friendly & local technology
• Circulation Fluidized Bed (CFB) type of boiler -> works with charcoal power that produced locally, Electroprecipitator (EP) -> absorb dust to ensure the cleanliness.
• Research unit monitor every aspect of tree growing in every phase
• Best product with strategic planting using only high quality seeds, high-grade & fertile land, slow release fertilizer, efective waterways system, and pest and weed management.
• 3P Principle (Profit, People, Planet)
• Focus on CSR programme and nature conservation.
• Certified product & process 
• ISO 9001, 14001, 22000 ;OHSAS 18001; and SNI 
• Spreaded location of production sites
• Create better access for shipping products with a lower cost to both 
• Reduce the risk in the event of a natural disaster or accident

Opportunity Factors Identification

• Big consumption in Indonesia & international market 
• Increasing every year
• Increase of population  increase of need
• Main ingredients in many products
• Palm oil : food (cooking oil, margarine, main ingredient of instant noodles) & oleochemical (materials for soaps, cosmetics, detergents, rubber additives and plastics)
• Sugar : direct consumption & ingredients of food, drinks, and pharmacy
• Increasing of health awareness 
• Palm oil is an alternative to replace artificial trans fats
• Renewable energy sources awareness
• Palm oil is key element for the production of biodiesel

Weakness Factors Identification

• Not the biggest palm oil & sugar factory in Indonesia
• The total land owned is still small compared to the other
• Not so well known
• Sell the raw products to other company, not use-ready product for consumer
• Don’t have any advertisement in public
• The CSR just focused on near the production sites
• Products that can not be differentiated from competitors' products

Threats Factors Identification

• Big number of competitors
• Competitors holds the largest market share
• Facing environmental issues
• Deforestation
• Forest burning
• Green house effect
• Banned in some international market
• Europe union banned palm oil and urged palm oil production to comes from the environmentally friendly and sustainable production. (Europe bans Indonesian palm oil? - The Jakarta Post. Sat, November 12 2016)

Salma Fadhilah

Presentation of Principal and Potential of Agribussiness course 

ASEAN International Mobility for Students (AIMS) Program 2016

Tokyo University of Agriculture & Technology