Professional Documents
Culture Documents
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June 2014
Table of Contents
INDONESIA AQUACULTURE 1
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
INDONESIA AQUACULTURE 2
7.1.6 Logistics (cargo services) ............................................................................................... 117
INDONESIA AQUACULTURE 3
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
INDONESIA AQUACULTURE 4
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
INDONESIA AQUACULTURE 5
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
INDONESIA AQUACULTURE 6
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
INDONESIA AQUACULTURE 7
INDONESIA AQUACULTURE 8
Abbreviations
AMDAL Environmental Repercussion Analysis
CC Catch Certification
GT Gross Tonnage
INDONESIA AQUACULTURE 9
KTP Indonesian Identity Card
INDONESIA AQUACULTURE 10
Research methodology and objectives
Indicates best
investment
Share Spire’s Senior research opportunities for
Phase 3: Summary & expertise on market consultants in collective aquafarming in
recommendations assessment and brainstorming with project Indonesia.
go-to strategy research consultants Description of
foreign player entry
process.
1.1 Breakdown
a. I nterviews (primary):
Expert interviews: Associations, government institutions, academic experts
Major players in Sumatra, Java, Bali, Sulawesi, Maluku, Papua
b. Secondary research:
Industry journals, government publications, and news articles on fish aquaculture
Proprietary business databanks for extensive listing of top-tier and lower level
players in fish aquaculture
INDONESIA AQUACULTURE 11
Summary and analytical outcomes
Spire’s assessment evaluates the needs and capacity essential to respond to production
requirements; thereby meeting market demands and competing globally with more
technically advanced peers. Actors from all segments of the industry have been
considered for their perspectives on existing comparative challenges, key success
factors, key selling points, cost levels, and technologies applied.
The reporting approach includes identification of successful firms and dynamic key
actors within the value chain that serve as models to catalyze holistic improvement
within the industry. The value of this exhaustive assessment lies in the resulting illustrations
of the vertical and horizontal links among the value chain participants, centered on
farmers. It methodically takes into account all stage players in the industry: Breeders,
collectors, processors, buyers, the government and other supporters and influencers in
the sector. The report highlights the situation in Indonesia in which breeders and farmers
generally operate as a single entity whereas this is usually not the case with industry
peers overseas. Additionally, the nursery/aquafarming segment incorporates complex
elements within the value chain; for example, fingerlings – whether cultivated or wild --
as well as fish feed, emanate from both domestic and imported sources.
In-depth interview research was conducted only in carefully selected “hot spots”
because of the vast geography and varying levels of industry maturity. First, all provinces
with proven, multiply attractive features were flagged for inspection. Then a closer
analysis was made to identify individual regencies in those provinces with the most
promise. In each case the criteria hinged on competitive advantages and a
comparative assessment of current opportunities.
INDONESIA AQUACULTURE 12
Summary and analytical outcomes
Spire’s recommended strategies for entering the market are divided into two broad
categories:
With foreign investors in mind, the analysis and recommendations section of this
report (Section 7) sums up where to go, which species to cultivate, and what
types of business models to use.
INDONESIA AQUACULTURE 13
Summary and analytical outcomes
Feed – Product versatility and diversity in fish feed are key in order to
achieve effective grow-out
This is surely clear to report users: Local players, environmental factors, and
geographic considerations must all be taken into account prior to establishing
business activities.
INDONESIA AQUACULTURE 14
General overview of Indonesian fisheries and aquaculture
Current condition of Indonesian fishery sector
Indonesia currently derives substantial benefit from the fishery sector. Per annum fishery
production growth reached 7% in 2011 (Indonesian Investment Coordinating Board /
BKPM), making the country the largest producer of fishery products in Southeast Asia. In
2013, fisheries contributed around 15% to the agricultural gross domestic product (GDP),
second-ranked under field crops (the biggest contributor) and making rapid gains. Such
statistics indicate that the aquaculture and fisheries sector plays a very important role in
the Indonesian economy.
The fisheries of this country extend for some 5.8 million km2 (about three-quarters of the
entire national territory). They cover archipelagic waters, territorial seas, and exclusive
economic zones (EEZ). Indonesia’s inland open-water areas are estimated at 54,000 km 2,
consisting of wetlands (71.6%), riverine areas (22.1%) and lakes and reservoirs (3.9%).
INDONESIA AQUACULTURE 15
General overview of Indonesian fisheries and aquaculture
Current condition of Indonesian fishery sector
Figure 1 shows the official scheme used to divide the country into 11 Fishery
Management Areas (FMA’s) (locally designated as WPP). The FMA’s are defined as
follows:
Indonesia ranked third, after China and Peru, as the country with the highest production
of captured fisheries in the world.
INDONESIA AQUACULTURE 16
General overview of Indonesian fisheries and aquaculture
Current condition of Indonesian fishery sector
driving force behind this change was the rapid emergence of Indonesian aquaculture.
The average annual increase of aquaculture production from 2009-2012 was 30.9%,
while capture fisheries grew at only 3.83% for the period.
The most common type of fish caught (more than 100,000 tons per year in 2012)
included Skipjack Tuna, Red Snapper, Scads, Indian Mackerels, Indian Oil Sardinella,
Fringescale Sardinella, Narrow Barred, Anchovies, and Eastern Little Tunas.
Table 1 presents data on exploitation status for various species of marine fish in each of
the FMA’s. In 2012, however, total production of marine capture fisheries was 5.82 million
tons, or over 13% in excess of the total allowable catch (TAC) limit of around 5.12 million
tons. While, with production numbers of marine fisheries for each major species
increasing by an average of at least 2.39% each year, there has surely been even more
encroachment on the sustainable limit.
Table 1 - Exploitation level status of fish resources in each of Indonesian FMA, 2012
(*)= Illegal Fishing effects | (1) = Java Sea > 40 m | (2) = Particularly for Fishing | (3) Particularly for Fishing | (4) Co ncrete
Fish Pot | (5) Overextend Fishing in NTT | (6) Bali Strait
INDONESIA AQUACULTURE 17
General overview of Indonesian fisheries and aquaculture
Structure of fisheries activities in Indonesia
Pelagic fish play an important role in Indonesian fisheries. Accounting for around 70% of
total fish stock, large pelagic fish are keys to FMA 572 and FMA 573 while small pelagic
fish are important to FMA 717. Yet irregular or disproportionate resource utilization
throughout the Fishery Management Areas (FMA’s) is reported. Over-exploitation of
pelagics -- in Indonesia and globally – is well known. Southern Bluefin Tuna. Skipjack Tuna
and Yellow Fin Tuna are common examples of overfishing to the point of collapse.
Demersals like Red Snapper -- in the Arafura and Timor Seas in Indonesia’s far east for
example -- are likewise fished beyond sustainable limits. Demersals as a whole are
reportedly fully exploited and “likely to move to overfished status … in the South China
Sea, Java Sea, Makassar Strait, Flores Sea and Indian ocean” (Sustainable Fisheries
Partnership, June 2014). However, in other areas, such as Sulawesi, Maluku, and the
border shared with Australia, the fish have been only moderately exploited.
Policies specifying type of fishing permitted in each area are needed in order to ensure
sustainability as well as in accordance with the FAO Code of Conduct for Responsible
Fisheries (CCRF). However, as a practical matter Indonesian authorities struggle to
control small-scale illegal fishing, let alone organized pirates and fishing mafia.
Fisheries activities are among primary economic activities that need to be developed in
order to provide national food security. This is an industry that can drive employment
and poverty reduction. The fishing industry in 2009 employed 2,641,967 fishermen and
913,788 people in other roles, with 603,856 companies and households devoted to fishing
activities.
Three basic activities, which are related to each other, comprise fishery production in
Indonesia: Fishing provides input (wild fish) for fish farming, while the fish processing
industry (further broken down into sub-activities), depending on the fishing and fish
farming inputs.
INDONESIA AQUACULTURE 18
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
Per capital fish consumption in 2011 was 31.64 kg, up 4.81% from 2010. While this is an
acceptable figures overall, it suggests that the “Enjoy Fish” campaign has yet to yield
significant results.
Year
Detail Growth (%)
2010 2011
Fish Consumption 30.48 31.64 4.81
(kg/capita/year)
Source: Ministry of Marine Affairs and Fisheries in Indonesia, 2012
With 4.5 million tons of production in 2009, the country was already the world’s third
largest aquaculture producer in the world, after China and India, and possesses
potential to increase 35.3% per annum in 2014, with production targets of 15 million tons
by the end of the year]. Despite a slight decline of growth (from 23% to 17%) in 2013, the
total production of aquaculture in the country is projected to continue to grow at a
compound annual growth rate (CAGR) of 21.85% [through] 2018. Indonesian’s currency
devaluation could be the reason for the dip in 2014.
Aquaculture in Indonesia is practiced in fresh, brackish and marine water using a variety
of species, production facilities and methods. Production of seaweed, including the
Eucheuma spp. and Gracilaria spp. species is particularly significant. Penaeid shrimp
and milkfish (Chanos chanos) also play a big role. Marine culture has only truly
blossomed over the last ten years and is dominated by the grouper species such as
Humpback Grouper (Cromileptes altivelis) and Brown-Marbled Grouper (Epinephelus
fuscogutattus).
INDONESIA AQUACULTURE 19
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
Based on data for 2012, seaweed accounted for about 67% of the total aquaculture
production, followed by fish (26%), shells (0.20%), crustaceans, including various types of
shrimp (0.15%) and other species (2%).
Table 3 organizes data about aquaculture growth since 2008, including information
about various methods or nurturing environments.
Average
Growth
Year 2008 2009 2010 2011 2012 (no. of
units)
Method
Owing to the fact that brackish-water pond culture is practiced more commercially in
Indonesia, land utilization for it is higher compared to freshwater culture. As time goes
INDONESIA AQUACULTURE 20
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
by, land utilization rate for brackish-water will grow stagnant and freshwater utilization
rate is likely to surpass the former while also increasing its commercial production
volume.
Figure 5 below shows production volume statistics. Net pen culture is projected to remain
the dominant aquaculture system in place, followed closely by floating cages. In 2012,
the total production from this type of operation was 4.4 million tons.
Projecti
Projection
Figure 6 shows historical and projected production values for the various types of
aquaculture production, with net pen culture again the biggest contributor to total
production value
The value of aquaculture in Indonesia production rose from IDR 57.63 trillion in the year
2010 to IDR 75.88 trillion in 2013, with a yearly increase of 18.35%. The highest average
annual growth rate in term of production was 42% in 2010 with the biggest contributor in
value by net pen culture. Subsequently, a minor plunge in 2011 is attributed to the
Indonesian economic downturn. It is projected that in the next 5 years, the value of
aquafarming in Indonesia will reach IDR 197.09 trillion with an average annual growth
rate of 21%.
INDONESIA AQUACULTURE 21
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
Projecti
Projection
on
a. Ponds
Pond compartments are usually rectangular but may also be triangular, raceway-
shaped, or oval. They can range from less than a hectare to several hectares each
and can be operated by the owner (aquafarmers) in a backyard or on an industrial
scale. The pond system is enclosed by a perimeter dike and the individual pond
compartments are separated from each other by partition dikes. The perimeter dike
is wider and higher than the partition dikes for protection. Side slopes of the dikes
range from 1:1 to 1:3, they can be made out of soil or concrete.
Pond culture in freshwater began with the stocking of common carp in backyard
ponds in West Java in the mid-1800s, spreading to other parts of Java, Sumatra and
INDONESIA AQUACULTURE 22
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
Sulawesi islands after 1900. In the late 1970s, the introduction of new farming
technologies contributed to the availability of hatchery-produced seed and in turn
helped boost freshwater aquaculture production.
Catfish is the predominant species, with production comprising 30.2% of the total
freshwater aquaculture output. The culture of ornamental freshwater fish has also
been expanding, triggered by huge export demand and strong government
support. Since the outbreak of the koi herpes virus (KHV), that affects carp, many
common carp hatchery, nursery and grow-out farmers and operators have been
shifting to the production of ornamental fish species for the export market.
While the aggregate production value from freshwater ponds is roughly 10% more
than for the brackish-water type, total pond area devoted to brackish-water ponds is
much greater (approximately 80% versus 20% in favor of brackish-water operations).
In fact, brackish-water aquaculture predates the introduction of freshwater methods,
by the Dutch during the colonial era, and has been practiced in Java on a
subsistence basis for more than 400 years.
Area devoted to brackish-water pond areas increased significantly in the 1980s with
the successful development of the eyestalk ablation technique and the rapid growth
of shrimp hatcheries. The private sector was also able to expand brackish-water
pond areas in the provinces of South Sumatra and Lampung to improve large-scale
pond culture using the nucleus estate system, or contract farming scheme. In terms
of value, shrimp are the prime commodity, contributing 80% to total brackish-water
value.
b. Paddy Field
The paddy field system involves establishing a temporary (30 days) nursery of seed
stock using rice paddies. The stock which is later raised to maturity in nets or cages.
Fish species depend on farmer requirements and include Common Carp, Tawes,
Sepat Siam and Tilapia.
INDONESIA AQUACULTURE 23
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
(Sumatra and Kalimantan) are placed in rivers or canals. The cages are constructed
using bamboo or iron bars as support beams from which a net is bound, forming a
floating cage.
d. Floating Cage
A relatively small portion of Indonesian marine coastal areas has been developed for
marine fish culture using floating net-cages. These developments occur more
commonly in bays where there is natural protection from strong currents and waves.
Floating net cage culture may also be developed in freshwater lakes and reservoirs.
The floating net-cage size is usually 8 x 8 m and divided in to four blocks. Frames can
be made from wood, bamboo, coconut trunks, or galvanized iron and this frame is
held afloat with empty drums or buoys.
INDONESIA AQUACULTURE 24
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
NAMES
No. PICTURE OF SPECIES
Genus English Indonesian
Brown-
Epinephelus Kerapu
3. marbled
fuscoguttatus Cantang
Grouper
INDONESIA AQUACULTURE 25
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
Barramundi/
Lates Kakap
7. Asian Sea
calcarifer Putih
Bass
Lutjanus Kakap
8. Snapper
malabaricus Merah
Bawal
9. Trachinotus Pompano
Bintang
Gnathanodon Golden
10. Kuwe
speciosus Trevally
Rachycentron Salmon
12. Cobia
canadum Hitam
INDONESIA AQUACULTURE 26
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
3.3.3.1 Grouper
Sumatra was the production leader for the latest year covered by the data (2012), with
total output of 5,913 tons. It was followed by Maluku – Papua with 1,324 tons. As
indicated by Figure 7, Indonesia’s aggregate grouper production grew steadily from
2009-12, with total output of 13,338 for 2012, or 13 percent higher than the year before.
Indonesia is a major producer of Grouper seed stock, with hatcheries in northern Bali
producing 200,000 to a million seeds per month, plus Humpback Grouper seed in smaller
numbers. The hatcheries generally grow fingerlings to around 2-3 centimeters; whereas
INDONESIA AQUACULTURE 27
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
the sea-cage farms that grow the fish out to market size prefer fingerlings in the range of
5-10 centimeters.
Grouper nurseries take the form of shore-based tanks (tank culture), or cages in coastal,
brackish-water ponds (pond culture). Generally, juveniles that have been nursed in
ponds are darker in color that those nursed in tanks. However, pond-cultured grouper
juveniles tend to have a better tolerance for unpredictable environmental parameters,
such as salinity. They are the preferred choice for grow-out in sea cages because they
are already adapted to living in cages, to some extent.
Various types of feed are used during the nursery phase, including dry (commercial)
pellets, moist pellets, trash fish, mysid shrimp, or some combination of these. However,
the use of so-called trash fish is not recommended -- unless there is no alternative -- since
it results in transmission of parasites, disease outbreaks, and increases mortality.
INDONESIA AQUACULTURE 28
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
3.3.3.2 Snapper
The most common way of designating snapper (Lutjanus spp.) in Indonesia is either
Kakap Merah or Bambangan (red snapper), regardless of the actual species. In reality a
number of Snapper species are present, including the Malabar Blood Snapper (Lutjanus
malabaricus). The Malabar is a species found throughout Southeast Asia and the
western central Pacific but that is often misidentified or confused with Humphead
Snapper or Blood Snapper (Lutjanus sanguineus). Another member prevalent in
Indonesian Snapper fisheries is generally designated Crimson (or Scarlet) Snapper.
Indonesian wild-catch Snapper fisheries cover vast areas of the archipelago from North
Sumatra to West Papua (the Indonesian portion of New Guinea). Nearly 30% of the total
wild catch of Red Snapper in Indonesia comes from waters of the Arafura Sea and Aru
Sea (to the south of West Papua); and the Eastern Timor Sea.
As a euryhaline, the Snapper is adapted for various salinity conditions. It’s also amenable
to variety of feeds. Thus Snapper (especially White Snapper) harbors a lot of promise as
an aquaculture commodity. It grows quickly and with relative ease and has a high
survival rate.
The prevailing constraints appear to be limited availability of seed and dependency on
the wild-catch. The production target for White Snapper in 2014 is 8,500 tons, with seed
requirements of 21 million units.
Snappers in Indonesia are caught with small-scale fishing equipment such as handlines,
bottom longlines, bottom gillnets and traps. They are of course also harvested by large
fleets of trawlers. These are operated mainly in eastern Indonesia, both by Indonesian
and foreign joint venture fishing companies.
INDONESIA AQUACULTURE 29
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
3.3.3.3 Barramundi
Barramundi (Lates calcarifer) is known locally as Kakap Putih and is frequently spotted in
estuaries, lagoons, and coastal waters. As a diadromous species it moves between rivers
and estuaries. Barramundi is peculiar in that it can change sex from male to female,
spending early maturity as a functional male before becoming female. However, this
occurs only when it is bred in marine water. Barramundi eat other fish and crustaceans.
Under optimum conditions the fish grows to sizes as large as 1,500-3,000g in a single year.
From a commercial standpoint, Barramundi is always in demand, fresh or frozen, and
popular in Australian and Thailand. Total 2012 aquaculture production was 3,609 tons
and industry projections are for that figure to grow at an annual rate of 18%.
INDONESIA AQUACULTURE 30
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
3.3.3.4 Pompano
There are basically two types of this species, Silver Pompano and Black Pompano.
Currently, demand and consequently production for the Silver Pompano is higher.
Pompano can be cultivated in ponds, floating cages and net pens, while production
may also be integrated with the paddy field method. Pompano may be farmed
pursuant to both monoculture and polyculture schemes. Aquafarming of Pompano is
not complicated, which places significant net profit margins within reach.
INDONESIA AQUACULTURE 31
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
3.3.4 Benefits, values and challenges for each aquaculture fish species
Table 5 below describes benefits, values and challenges of each of the Indonesian
marine aquaculture species covered. In terms of value, Groupers would have the
highest market price in the industry, ranging between USD 19 and USD 30 per kilo.
Table 5 - Benefits, values & challenges for each aquaculture fish species
Type of Fish
Benefits Values Challenges
Species
Robust domestic and Location
Lucrative
international demand Unknown factors
commodity: USD 30 with regard to
drives profits
per kilo for whole natural disasters,
Groupers are alive/non-processed pollution, predators
desirable for Humpback Grouper and user conflicts;
restaurant meal and environmental
luxurious hotels in the Lucrative parameters are not
worldwide commodity: USD 19 well-defined
With a weight range per kilo for whole
alive/non-processed Broodstock
of 500-1000 gram per
Tiger Grouper Without proper
fish, a whole live fish is
attention to
Tiger valued higher than
Grouper has flaky broodstock sizes,
Grouper processed fish
(Mycteropurca
flesh structure thus cannibalism can
Diversification
Tigris) making it impact yield
benefits as a high-
unavailable to
earning, non-oil
undergo processing Seed
export commodity
phase. Farmers may not be
demanding
Humpback enough in ensuring
Grouper that suppliers
(Cromileptes deliver in
Altivelis)
accordance with
the quantity, quality
and delivery terms
required for
operational success
Pests
Farmers /
entrepreneurs may
not understand
how to control
pests and diseases
including thorough
cleaning of cages;
INDONESIA AQUACULTURE 32
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
predator
prevention; and
intervention against
specific diseases
Barramundi are Good value: USD 9 When water
opportunistic per kg in alive form, temperatures drop
predators and eat USD 5.4/kg in during rainy season,
just about any processed form. Barramundi
organism in the water become less
High fecundity boosts active, cutting into
yields yields
Barramundi
(Lates Calarifer) One of the most Aggressive
stress- tolerant fish behavior results in
species due to self-injury in
euryhaline nature; collisions with cage
lower mortality rate
Will devour other
species if kept in
same cage
Snapper is a white- Good value: USD 4 Impacted by
meat fish in demand per kg for whole overfishing (failure
for various frozen snapper to enforce catch
Snapper
(Lutjanus international cuisines quotas and
Malabarices) unreported/illegal
fishing)
Currently Grouper fish farming is being promoted as “best choice” marine aquaculture
export commodity with a high selling price. Meanwhile, the Kustang is an attempt to
ensure the family lives up to its potential by addressing slow growth, a common problem
for many species including the Humpback. Hybridization is an effort to overcome these
INDONESIA AQUACULTURE 33
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
problems that can yield seed with enhanced genetic and morphological
characteristics.
Kustang Grouper represents a female Humpback and male Kertang Grouper
hybridization with a growth rate that is better than the Humpback’s.
Since 2011, a key East Java research centre, the Brackish-water Aquaculture
Development (BDAC) Centre in Situbondo regency, has been actively developing these
hybrids. It has succeeded in reaching a stage of seed production marked by mass
quantities and survival rates of 15% to 20%.
Appearance
Kustang Grouper fingerlings have morphological forms that represent the two parent-
stock fish: Humpback Grouper and Giant Grouper, with dominant colors, patterns and
batik like a grouper, but the number spots is fewer, while its shape resembles giant
grouper, being longer and thicker.
Resistance to disease
Early indications are that Kustang Grouper is more resistant to VNN than the Humpback
Grouper from seed production through harvest size. In the period of 2011-2012 all newly
discovered cases of Kustang Grouper VNN attacks were on juveniles (2-3 cm). At the
same time there was a wider outbreak of VNN in Humpback Grouper.
Research and development of Yellow Fin Tuna in Indonesia is ongoing due to declining
stock in nature caused by over-intensive capture efforts. With demand robust among
consumers, domestication may represent a breakthrough opportunity for this species,
and a source of foreign exchange earnings.
Fish are being taken alive from zones in the northern Bali Sea for the purpose of
propagating the offspring. However, projects remain in the pilot stage and there has not
yet been any harvested production.
INDONESIA AQUACULTURE 34
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
Tilapia Zilli or Redbelly Tilapia are able to live in fresh, brackish and marine waters,
although freshwater production is most common. Nevertheless, the species is able to
adapt to a range of salinity conditions and thus has potential for being farmed in
marine-based floating cage systems.
If farmed in floating cages the following parameters would be expected to yield the
best results: Salinity from ~33 ppt (with daily salinity fluctuation not to exceed 10 ppt);
temperature from 25-32 (°C); pH of 6.5 to 8.5; dissolved oxygen at 4-8 ppm; a flow
velocity of 10-20 cm/s; 1 – 3 m wave height; and water depth of 10-20m.
INDONESIA AQUACULTURE 35
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
Table 6 organizes information about demand for grouper in export destinations around
the world.
Thailand 5,747,727
Malaysia 1,856,652
Singapore 1,050,496
China 989,537
Vietnam 286,485
Taiwan 150,514
France 72,215
Total 12,785,245
Source: Ministry of Marine Affairs and Fisheries (MMAF), 2012
INDONESIA AQUACULTURE 36
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
To meet Indonesia’s own demand for Snapper, artisanal fishermen act as the primary
medium in marketing the wild stock catch. Fresh fish are typically transported to Jakarta,
Gresik, East Java and Bali to undergo processing. Subsequently, whole-round processed
fish are shipped abroad, primarily to the U.S., Singapore and Malaysia.
China 778,121
Malaysia 296,468
France 167,080
Vietnam 75,330
Singapore 71,598
Italy 46,605
Total 2,572,104
Source: Ministry of Marine Affairs and Fisheries (MMAF), 2012
INDONESIA AQUACULTURE 37
General overview of Indonesian fisheries and aquaculture
Indonesian aquaculture
Australia 2,604
Thailand 2,084
Philippines 1,233
Singapore 955
Taiwan 695
Spain 391
Others (United Kingdom, France, and the 1,563
Netherlands etc.)
Total 17,363
Source: Ministry of Marine Affairs and Fisheries (MMAF), 2012
3.3.6.4 Others
Other aqua commodities in abundance in Indonesia include those in the Salmon family,
such as Pompano (discussed above); and Trout.
Most Pompano sales derive from wild-caught fish and the species has long been
considered an attractive one for aquaculture, for its net profit ratio and robust demand.
Additionally, Pompano is often favored for Indonesian dishes, thus local production is
often consumed domestically.
INDONESIA AQUACULTURE 38
General overview of Indonesian fisheries and aquaculture
“Minapolitan” system as an unique approach to aquaculture
China 35,377,884
Thailand 2,002,680
Malaysia 595,607
Japan 112,757
Vietnam 83,258
Singapore 16,070
Taiwan 12,996
Australia 10,900
Mauritius 5,190
Total 38,235,622
Source: Ministry of Marine Affairs and Fisheries (MMAF), 2012
Based on the table above, less than 40,000 tons of Pompano aquaculture products were
shipped during the year 2012.
INDONESIA AQUACULTURE 39
General overview of Indonesian fisheries and aquaculture
The marine climate
INDONESIA AQUACULTURE 40
General overview of Indonesian fisheries and aquaculture
The marine climate
The volumetric mass of water passing through the Indonesian islands moves at
approximately 15 sv (Sverdrup) from the Pacific Ocean to the Indian Ocean. However, it
is diverted at different rates through different regions of Indonesia. Ocean currents vary
widely throughout the islands, based primarily on ocean depths and coastline shape.
Warm currents from the western Pacific carry nutrient-rich water driven by circular winds.
Meanwhile, the enormous water mass is roughly equal in salinity across the whole
Indonesian territory. These attributes are suitable for marine organisms to thrive.
As Figure 14 illustrates, Indonesian waters have a low average salinity, ranging from 28-33
ppt. Such conditions are driven by high precipitation rates and warm ocean
temperatures. Conditions of salinity, temperature and dissolved oxygen are very much in
line with the general requirements for marine life to flourish.
INDONESIA AQUACULTURE 41
General overview of Indonesian fisheries and aquaculture
The marine climate
Wave
Average Wind Average Wave Max Wave
No Location frequency
Speed (knot) Height (m) Height (m)
>3m)
1 North Aceh 4-10 0.5 - 1.0 0.5-1.25 0-5%
West Aceh to Sumatra
2 3-5 0.25 - 1.0 0.75 - 1.25 0-5%
Utara
3 West Sumatra 3-5 0.5 - 1.25 0.75 - 1.5 0-5%
4 Bengkulu-Lampung 3-5 0.25 - 1.25 0.5 - 2.0 0-5%
5 Strait of Sunda 3-5 0.25 - 1.25 0.75 - 2.0 0-5%
6 South Banten-West Java 3-5 0.5 - 1.25 0.75 - 2.0 0-5%
7 South of Central Java 3-5 0.5 - 1 0.5 - 1.25 0-5%
8 South of East Java 3-5 0.75 - 1.25 1.0 - 2.0 0-5%
9 Bali-West Nusa Tenggara 4-10 0.5 - 1.5 1.0 - 2.0 0-5%
10 Sawu Sea 4-15 0.75 - 2.0 1.5 - 2.5 0-15%
11 Timor Sea 4-15 0.75 - 2.0 1.5 - 2.5 0-15%
12 Strait of Malacca 3-5 0.25 - 0.5 0.5 - 0.75 0-5%
13 Natuna Sea 5-10 1.25 - 2.0 2.0 - 3.0 1-25%
14 Strait of Karimata 4-10 0.75 - 1.5 1.0 - 2.0 0-5%
15 South of Kalimantan 3-5 0.25 - 0.5 0.5 - 0.75 0-5%
16 Thousand Islands 3-5 0.25 -0.5 0.5 - 1.75 0-5%
17 Java Sea 4-10 0.5 - 1.0 0.75 - 1.25 0-5%
18 Bali Sea 3-5 0.5 - 0.75 0.75 - 1.25 0-5%
19 Flores Sea 5-15 0.75 - 1.25 0.75 - 2.0 0-5%
Southern part of Strait of
20 4-10 0.5 - 1.0 0.5 - 1.25 0-5%
Makassar
21 Southern Sea of Sulawesi 5-10 0.25 - 0.75 0.5 - 1.25 0-5%
22 Maluku Sea 3-10 0.75 - 1.25 0.75 - 2.0 0-5%
23 Buru-Laut Seram Sea 4-10 0.5- 1.25 0.75 - 1.25 0-5%
24 Sulawesi Sea 3-10 0.75 - 1.25 0.75 - 2.0 0-5%
25 Kep. Sangihe Talaud 4-15 0.75 - 2.0 2.0 - 3.0 5-10%
26 Halmahera Sea 3-5 0.5 - 1.5 1.5 - 2.0 0-5%
27 Northern Sea of Papua 3-8 0.5 - 1.25 1.25 - 2.0 0-5%
28 Banda Sea 5-15 0.5 - 1.25 1.5 - 2.0 0-5%
29 Sea of Aru Islands 5-10 0.5 - 1.25 0.75 - 2.0 0-5%
30 Arafuru Sea 5-12 1.25 - 1.5 1.5 - 2.0 5-15%
*Note: Frequency occurrence = 100 %, wave > 3 m happens in a week (7 days)
INDONESIA AQUACULTURE 42
General overview of Indonesian fisheries and aquaculture
The marine climate
3.5.1 Pollution
Marine pollution from human activities in Indonesia, such as industry, shipping and
domestic discharges, is daunting in some areas, and only a mild concern in others.
Organisms, reefs, biodiversity as a whole, and human livelihoods are under threat from
the rate at which Indonesia is growing, developing and industrializing. There seems
always to be a new species whose extinction lies just around the corner. With marine-
sourced commodities an important part of the diet, major food safety issues also come
to the fore.
Oil spills continue to loom as a potential source of major marine pollution, since so much
oil and other fossil fuels originate from and transit through the territory. Yet attempts to
address this and other types of environmental degradation in Indonesia have often
been poorly coordinated. The Coral Triangle Initiative and Manado Ocean Declaration,
however, are noteworthy, as efforts on the part of the Indonesian government and its
partners to define and mitigate marine pollution factors and better monitor and
understand the actual capacity of the seas to support people.
Poor spatial planning is another self-inflicted injury as regards Indonesia’s exploitation of
the sea. A foreseeable scenario in where any aquaculture locale simply becomes
overcrowded, for example with hundreds or thousands of cage system operations in
close proximity to one another. All farmers involved would likely suffer since oxygen levels
would drop and the fish would suffocate.
The pollution that poses a risk to marine aquafarmers often reaches the sea via rivers.
Siak River in Riau province and Citarum River in West Java province are inter-linked with
coastal territory. Nevertheless, the dumping of household and industrial waste into these
waterways is essentially allowed, since it may often be done without penalty. In the case
of the Citarum, some estimates suggest that most of the most harmful waste originates
with the nationally important textile industry, which is concentrated in Java.
Alarming sedimentation rates observed in Sumatra, Java and other regions are another
aspect of how environments are becoming less habitable for marine organisms.
Sedimentation may have natural causes or be caused by deforestation, mining or
human activities. Fisheries in Eastern Java have for some years felt the impact of the
Sidoarjo mudflow – believed to be the world’s largest -- that erupted in 2006
simultaneously with natural gas drilling in the area.
INDONESIA AQUACULTURE 43
General overview of Indonesian fisheries and aquaculture
Workforce availability
INDONESIA AQUACULTURE 44
Figure 15 illustrates the zoom-in selection process on determining hot spots for in-depth
player interviews and value chain analysis. In the beginning, all 34 provinces of Indonesia
were considered for their aquaculture potential. Subsequently, data collection and
relevant metrics were applied to screen-out less attractive areas based on significant
inputs such as: Current marine fish aquaculture production, presence of industry players,
and basic infrastructure and environmental conditions.
Table 12 lists the nine provinces selected for interview fieldwork and value chain analysis.
The similarities of the nine Prime Potential provinces is characterized most significantly by
the market value of their production of prominent species, their higher-than-average
production output per year, and the species’ survival rates. They are supported by
positive environmental factors such as low pollution conditions, stable ocean currents,
even salinity, and relatively low average wave height. In addition, infrastructure
requirements are well met by availability of electricity, port facilities, workforce, and the
necessary influence of local research centres.
INDONESIA AQUACULTURE 45
Aquaculture hotspot mapping
Aceh 967,038
Camouflage
Rp 150,000 108 55%
Grouper
Brown Marbled
Rp 110,000 177.51 58%
Giant Grouper
Giant Grouper Rp 120,000 96 55%
Lampung Snapper Rp 60,000 41.14 55% 1,813,532
Barramundi Rp 60,000 40 58%
Humpback
Rp 375,000 143 60%
Grouper
Brown Marbled
Rp 120,000 399.4 55%
Giant Grouper
Snapper Rp 50,000 34.6 60%
Tiger Grouper Rp 140,000 302 45%
East Java Humpback 6,150,379
Rp 350,000 413.7 49%
Grouper
Coral Trout
Rp 150,000 89.8 44%
Grouper
Kustang Grouper Upcoming Species
Snapper Rp 55,000 165.3 64%
Humpback
Grouper Rp 325,000 218.5 51%
Brown Marbled
Giant Grouper Rp 115,000 10.8 58%
Excellent
M oderate
Poor
INDONESIA AQUACULTURE 46
Aquaculture hotspot mapping
Province of Aceh
Strength Weakness
Remote from industrial area and relatively
secure from polluting factors. Modern Powerful ocean currents are destructive
infrastructure supportive to business to implemented equipment.
environment.
INDONESIA AQUACULTURE 47
Aquaculture hotspot mapping
Province of Aceh
Table 15 summarizes the analysis of highest potential regencies for aquaculture within
the province of Aceh. The regency of Aceh Utara – Pantai Banda Aceh earned highest
ranking for its species variety, production capability, and advanced infrastructure,
especially with regards to proximity to port and workforce availability. In confirmation,
industry experts state that the regency possesses the largest usable coastline compared
to other regencies, thereby supporting expansion of aquaculture business.
INDONESIA AQUACULTURE 48
Aquaculture hotspot mapping
Province of Aceh
Aceh Timur
Bireuen
Aceh
Aceh Utara – Possesses the biggest land area Dangerous ocean current might
Pantai Banda among the others, allowing be a destructive factor for the
Aceh spaces for aquaculture deployed technology
Aceh Selatan
There are three species with high cultivation in Aceh. Table 16 summarizes data
gathered from the local research centre, farmers and the Ministry of Marine Affairs and
Fisheries. These average lifecycle measurements are specifically relevant to Aceh and
address the most productive fish species.
INDONESIA AQUACULTURE 49
Aquaculture hotspot mapping
Province of Riau Archipelago
The Mariculture Development Centre (MDC) of Batam is responsible for propagation and
dissemination of fish juveniles of Grouper, Barramundi and Snapper in appropriate
aquaculture farming facilities.
Strength Weakness
Scarcity of local fish pellets, stifling the
Modernized technology is in place to
growth of the organism. Local
accommodate aquaculture development.
aquafarmers are forced to import
Strategically located close to Singapore for
expensive feed.
input and output logistics.
Batam is the core technical implementation unit in mariculture under the Director General
for Aquaculture at the Ministry of Marine Affairs and Fisheries. The operational area of
MDC Batam includes all of Sumatra and Kalimantan. The administrative centre of the
MDC Batam is in Pulau Setokok, Bulang Sub-District, Batam. Project activities within the site
include the development of seed production for Grouper species (Epinephelus spp and
Cromileptes altivelis), Barramundi (Lates calcarifer), Pompano (Trachinotus blochii),
INDONESIA AQUACULTURE 50
Aquaculture hotspot mapping
Province of Riau Archipelago
Batam city ranks highest of the potential regencies for aquaculture business in the
Province of Riau Archipelago. Its species variants are mainly Grouper and Barramundi.
Strong industry players and vertical segment presence supports the overall value chain.
The well-developed infrastructure and strategic location has made the city a trading
hub to reach the international market, adding benefit to aquaculture activities.
Anambas
Riau
Archipelago
Bintan
Lingga
There are five species with high cultivation in Riau Archipelago. Table 20 summarizes
data gathered from the local research centre, farmers and the Ministry of Marine Affairs
and Fisheries. These average lifecycle measurements are specifically relevant to Riau
Archipelago and address the most productive fish species.
INDONESIA AQUACULTURE 51
Aquaculture hotspot mapping
Province of Lampung
INDONESIA AQUACULTURE 52
Aquaculture hotspot mapping
Province of Lampung
The Main Centre for Mariculture Development or Balai Besar Pengembangan Budidaya
Laut is the technical execution agency for the Directorate General for Aquaculture,
Ministry of Marine Affairs and Fisheries. In 2001, MCMD Lampung was established by the
Ministry of Marine Affairs and Fisheries to meet the objective of improving hatchery and
grow-out techniques for marine finfish, broodstock and seed resources management
and conservation of the environment. The facility is located in Lampung, south of
Sumatra Island, approximately 17 km from Lampung town centre.
INDONESIA AQUACULTURE 53
Aquaculture hotspot mapping
Province of Lampung
Lampung
Selatan
Lampung
In proximity with marine research Supporting infrastructure and
Pesawaran
centre workforce scarcity
There are five species with high cultivation in Lampung. Table 24 summarizes data
gathered from the local research centre, farmers and the Ministry of Marine Affairs and
Fisheries. These average lifecycle measurements are specifically relevant to Lampung
and address the most productive fish species.
INDONESIA AQUACULTURE 54
Aquaculture hotspot mapping
Province of East Java (Java Timur)
INDONESIA AQUACULTURE 55
Aquaculture hotspot mapping
Province of East Java (Java Timur)
Finfish Division: The main office is at Pecaron Countryside, Klatakan Village, Kendit
District, about 15 kilometers west of Situbondo, East Java. The division facilities are
4.39 ha in area.
Shrimp Division: Situated in Blitok Village, Bungatan District, about 28 kilometers
west of Situbondo, East Java.
Aquaculture Division: Situated in Pulokerto Village, Kraton District, Pasuruan, East
Java (about 100 km from the main office). Facilities are 30 ha in area.
INDONESIA AQUACULTURE 56
Aquaculture hotspot mapping
Province of East Java (Java Timur)
Lamongan
Banyuwangi
Sumenep
There are five species with high cultivation in East Java. Table 28 summarizes data
gathered from the local research centre, farmers and the Ministry of Marine Affairs and
Fisheries. These average lifecycle measurements are specifically relevant to East Java
and address the most productive fish species.
INDONESIA AQUACULTURE 57
Aquaculture hotspot mapping
Province of Bali
Strength Weakness
Strategic location flanked by the two great Progressive development in the
oceans, Pacific and Indian, the water is rich construction sector may pose pollution
in nutrition beneficial for aquaculture. risks for marine ecosystems.
Modern equipment, techniques, and
infrastructure endow greater degree of
freedom for local aquafarmers to develop
their own hatchery activities.
INDONESIA AQUACULTURE 58
Aquaculture hotspot mapping
Province of Bali
Buleleng –
Teluk
Pengametan
Jembrana
Benoa
P. Serangan
There are seven species with high cultivation in Bali. Table 32 summarizes data gathered
from the local research centre, farmers and the Ministry of Marine Affairs and Fisheries.
These average lifecycle measurements are specifically relevant to Bali and address the
most productive fish species. The Research Institute of Mariculture of Bali is superior to
other provincial centres in terms of number of species under its care.
INDONESIA AQUACULTURE 59
Aquaculture hotspot mapping
Province of West Nusa Tenggara (Nusa Tenggara Barat)
Strength Weakness
West Nusa Tenggara and Bali are Local stakeholders are leaning more
adjacent to one another, sharing towards developing and nurturing sea
commonalities in their marine features. commodities such as; seaweed, abalone,
However, West Nusa Tengara holds slight lobster and pearl.
edge over Bali with its relatively pristine
nature.
INDONESIA AQUACULTURE 60
Aquaculture hotspot mapping
Province of West Nusa Tenggara (Nusa Tenggara Barat)
MDC Lombok is 1 of the 12 technical implementation units of the Directorate General for
Aquaculture, operating under command of the Ministry of Marine Affairs and Fisheries,
Indonesia. MDC Lombok's responsibilities include development of applied research in
the areas of breeding and nursery of marine organisms, fish health management, and
conservation of broodstock/seed resources of marine organisms and the environment.
INDONESIA AQUACULTURE 61
Aquaculture hotspot mapping
Province of West Nusa Tenggara (Nusa Tenggara Barat)
MDC Lombok is responsible for the development of mariculture activities in Java, Bali,
and West and East Nusa Tenggara.
Lombok Barat
Sumbawa
West Nusa
Tenggara
Lombok Timur
– Teluk Ekas Untapped aquaculture potential,
Local stakeholders's preference
evidenced by the existence of
towards non-fish aquaculture
Lombok Timur smaller-scale aquafarmers
– Labuhan Haji
There are three species with high cultivation in West Nusa Tenggara. Table 36 summarizes
data gathered from the local research centre, farmers and the Ministry of Marine Affairs
and Fisheries. These average lifecycle measurements are specifically relevant to West
Nusa Tenggara and address the most productive fish species.
INDONESIA AQUACULTURE 62
Aquaculture hotspot mapping
Province of South Sulawesi (Sulawesi Selatan)
Strength Weakness
Extensive shoreline and conducive Inconsistent supply rate of fish pellets and
coastal environment juveniles
History of fishing instilled the population Inclination towards wild catch activities.
with a desire to work in aquaculture, Passiveness of Local research centre: Lack of
although they show some preference novel initiatives to collaborate with local
towards wild catch. aquafarmers.
Existence of thermal power plant
BADC Takalar is one of the 12 technical implementation units of the Directorate General
for Aquaculture, Ministry of Marine Affairs and Fisheries, Indonesia. Operating as centre
for aquaculture development in Eastern Indonesia (Sulawesi, Maluku and Papua), BADC
INDONESIA AQUACULTURE 63
Aquaculture hotspot mapping
Province of South Sulawesi (Sulawesi Selatan)
Jeneponto District is located in the western part of South Sulawesi Province. It has a
coastal area that stretches for about 95 km in the southern part, covering an area of
74,979 ha or 749.79 km2. It is bounded by Gowa District on the north, the Flores Sea on
the south, Takalar district on the west and Bantaeng on the east. It is considered the best
potential area in South Sulawesi for aquaculture compared to Selayar Island and
Pangkep due to player segment availability, port capacity and available workforce.
Pangkep –
Pelabuhan
Biringkassi,
Kab. Barru
There are five species with high cultivation in South Sulawesi. Table 40 summarizes data
gathered from the local research centre, farmers and the Ministry of Marine Affairs and
INDONESIA AQUACULTURE 64
Aquaculture hotspot mapping
Province of Maluku
Strength Weakness
Isle-esque landscape of Maluku offers Precarious distribution of fish juveniles.
relatively calm and stable water current Human Resource scarcity: Lack of
suitable for aquaculture. enthusiasm from the locals to work in
Focused funding programme for Grouper aquaculture.
development. Port availability to accommodate sea
commodities unloading activities.
INDONESIA AQUACULTURE 65
Aquaculture hotspot mapping
Province of Maluku
MDC Ambon is one of the 12 technical implementation units of the Directorate General
for Aquaculture, Ministry of Marine Affairs and Fisheries, Indonesia. The centre is
responsible for the development of applied research in the areas of breeding and
nursery techniques of marine organisms, conservation of broodstock, seed resources
and the environment. The centre is responsible for the development of mariculture
activities in Sulawesi, North Maluku, Maluku, Irian Jaya and Papua.
INDONESIA AQUACULTURE 66
Aquaculture hotspot mapping
Province of Maluku
Maluku is one of the best potential areas for aquaculture; its excellent environmental
conditions fully support business potential. Teluk Ambon in Ambon City is ranked the best
potential regency among many active areas. The research centre, located in Ambon, is
engaged in local aquaculture business, providing juveniles to aquafarmers. The city is
supported with a developed port and high numbers of players in the processing
segment, supporting aquaculture development in the area.
INDONESIA AQUACULTURE 67
Aquaculture hotspot mapping
Province of Maluku
Aru Island
West Southeast
Maluku
West Seram -
Kairatu Island
Maluku
West Seram -
Marsegu Island
West Seram -
Osi Island
There are five species with high cultivation in Maluku. Table 44 summarizes data
gathered from the local research centre, farmers and the Ministry of Marine Affairs and
Fisheries. These average lifecycle measurements are specifically relevant to Maluku and
address the most productive fish species.
INDONESIA AQUACULTURE 68
Aquaculture hotspot mapping
Province of West Papua (Papua Barat)
INDONESIA AQUACULTURE 69
Aquaculture hotspot mapping
Province of West Papua (Papua Barat)
Figure 24 – Hatchery unit of Ministry of Marine Affairs and Fisheries, West Papua
With respect to the excellent environmental condition in Raja Ampat – Waisai Island, the
location is ranked as the best potential area for aquaculture due to its species variants
and the existence of a hatchery unit, which has been cooperating with private
companies and Ministry of Marine Affairs and Fisheries in developing aquaculture
business. The hatchery unit was established in 2010 and has only been concentrating
efforts on Grouper and Snapper species. The existence of a developed port with suitable
capacity is a significant support for the area.
INDONESIA AQUACULTURE 70
Aquaculture hotspot mapping
Province of West Papua (Papua Barat)
Raja Ampat -
Friwen Island
Raja Ampat -
Mansiwar
West Papua Island
Teluk
Wondama
Fak fak
Kaimana
There are three species with high cultivation in West Papua. Table 48 summarizes data
gathered from the local research centre, farmers and the Ministry of Marine Affairs and
Fisheries. These average lifecycle measurements are specifically relevant to West Papua
and address the most productive fish species.
INDONESIA AQUACULTURE 71
Value chain analysis
Value chain commodity schemes
The aquaculture products are exported to around 120 countries as of 2013. The United
States has become the main importer of Indonesia’s aquaculture exports; Indonesia also
exports to China, Japan and the European Union.
INDONESIA AQUACULTURE 72
Value chain analysis
Value chain commodity schemes
INDONESIA AQUACULTURE 73
Value chain analysis
Value chain commodity schemes
INDONESIA AQUACULTURE 74
Value chain analysis
Value chain business segments
5.2.1 Hatcheries
With hatcheries a key link in the value chain, research centres like RIM in Bali, BADC in
Situbondo and MCMD in Lampung, play a crucial aquaculture role in Indonesia. Even
so, local farmers in Bali, and certain government and non-government entities have, on
their own, begun to engage in hatchery activities.
Most of the broodstock for fingerling production is obtained from the wild. Yet the
various research and hatchery programmes have been able to improve broodstock
quality to increase fingerling survival and growth rates, as well as prevent disease and
deformities. Nursery and grow-out technology has also been largely successful. Some of
the innovative hatchery practices for Groupers and other species are unique to
Indonesia. Grouper- and Barramundi seed and fry that are grown in hatcheries are sold
to local breeders and exported to international markets in Vietnam, Singapore and
Malaysia.
Figure 27 – The hatchery business segment value chain in Indonesian aquaculture sector
In terms of feed supply, several farmers noted that, in order to meet dietary requirements
for broodstock and juveniles, fish feed often has to be imported. Feed companies in
INDONESIA AQUACULTURE 75
Value chain analysis
Value chain business segments
Indonesia actively follow research results on best combinations of fatty acids, minerals
and vitamins to cover the nutritional needs of specific types of marine fish.
Species
Cost
Cost details Tiger Humpback
expenditure Snapper Pompano Barramundi
Grouper Grouper
Electricity 8% 8% 4% 4% 4%
Disinfectant/Vitamin/Drugs/Vaccine 2% 1% 1% 1% 1%
Variable Natural feed (artemia, rotivera, etc.) 26% 29% 30% 30% 30%
cost Artificial feed 20% 19% 24% 23% 24%
Oxygen 1% 1% 1% 1% 1%
Broodstock* 8% 11% 7% 7% 7%
Others Net 6% 5% 7% 7% 7%
Plastic bag 2% 2% 2% 2% 2%
INDONESIA AQUACULTURE 76
Value chain analysis
Value chain business segments
Product dynamics
Humpback
Species Tiger Grouper Snapper Pompano Barramundi
Grouper
Spawn count 223,500 198,530 256,330 185,013 192,500
Hatcheries typically address larval nutrition and digestion for high-value marine fin fish.
They also study intensive and semi-intensive hatchery techniques such as live prey
selection, production of SS-train rotifers, use of ultra-small copepod nauplii as first feed
prey, cannibalism and feed development for late larvae and juveniles.
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Value chain business segments
5.2.1.3 Hatcheries/trading
The trading of juveniles has been very limited due to the remoteness of the production
hatchery facilities; therefore, air cargo is the only option. Juveniles are packed in 40 cm x
100 cm bags containing 12 liters of water. They are oxidized regularly and sedated with
tobacco. One bag contains 300 - 700 juveniles.
5.2.1.4 Hatcheries/challenges
Inconsistent distribution of juveniles is a recurring issue that has yet to be resolved. The
mortality rate for locally bred juveniles is frequently higher than for imported ones. Thus,
there is a need for training, capacity building and improved management in the
hatchery business segment so that local actors are able to make hatchery activities as
efficient and productive as possible.
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5.2.2 Nursery/aquafarming
The distinction between breeders and aquafarmers is not necessarily recognized in
Indonesia. Inputs into the local nursery/aquafarming segment are not purely domestic in
the value chain (e.g., fish feed and fingerlings emanate from both domestic and
imported streams). Transportation-wise, land transport increases the mortality rate, thus
air and sea deliveries are preferred.
INDONESIA AQUACULTURE 79
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INDONESIA AQUACULTURE 80
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Please note with regard to Figure 30, that platforming technologies come from foreign
suppliers as well as domestic suppliers, such as the brand Aquatec originating from
Bandung. It is highly popular among local aquafarmers.
Platform equipment often comes bundled with polyethylene net cages. The woven-type
confinement nets use a knotless system to minimize damage to ever-circling fish on the
move. Pontoons are easily assembled using a boltless knockdown mechanism and
prevent structural disintegration from forceful wave strikes.
Typically, the suppliers of platforms and cages are able to supply farmers with filtration
and maintenance equipment
5.2.2.4 Nursery/aquafarming/trading
With many of the other segments clustered around the nursery/aquafarming vertical, this
is correctly viewed as a crucial link in the chain. As noted, transportation of species from
one participant to another is typically by air or sea shipment.
Typical trade routes are:
Live Fish: Grouper is the primary example. Live Groupers are highly-valued in the
market for soft but firm meat texture. For freshness, trading companies employ en-
route circulatory pools to recycle the water in which the commodity is transported.
Primary destination markets for this species are: Malaysia, Hong Kong and China.
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Value chain business segments
Processed fish: Species such as Snappers, Barramundi and Pompano are usually
marketed as fillets, both smoked and fresh.
5.2.2.5 Nursery/aquafarming/challenges
Unreliable supply of healthy juveniles is a major concern. Contamination from industrial
sources and poorly understood diseases (e.g. Red Tide epidemic in Lampung) are some
of the others.
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Value chain business segments
5.2.3 Vaccines
The vaccine business is dominated by foreign-owned companies because domestic
players are not able to consistently meet threshold levels of safety and merchantability.
Regulations can be quite burdensome. For example, in the case of non-betalactam and
non-cephalosporin formulations, manufacturers would have to answer to at least three
regulators: The Indonesian food and drug agency (BPOM), World Health Organization,
and Therapeutic Goods Administration (Australia).
Figure 32 – The vaccine business segment value chain in Indonesian aquaculture sector
INDONESIA AQUACULTURE 83
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5.2.3.3 Vaccines/trading
As noted, foreign companies dominate the vaccine trade, although local players also
play a role in distribution. Purchases often take place at the farm site, bringing together
the supplier and farm principals.
5.2.3.4 Vaccines/challenges
With vaccine-manufacturing activities concentrated in Java, prices may be prohibitive
elsewhere for logistics reason. The result is many potential customers rarely engage in
routine use of vaccines. Moreover, many farmers are simply unaware of the benefits.
INDONESIA AQUACULTURE 84
Value chain analysis
Value chain business segments
Feed companies require feeder fish, fish and soybean meal, rice bran and coconut oil
as raw materials. These may be acquired from local distributors as well as imported from
Chile, Thailand and other origins.
Figure 33 – The fish feed business segment value chain in Indonesian aquaculture sector
INDONESIA AQUACULTURE 85
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Value chain business segments
Transportation 1.09%
Other costs 2.18%
Total cost 100.00%
INDONESIA AQUACULTURE 86
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Value chain business segments
Disk and hammer mill machines are used for grinding. Both vertical and horizontal mixers
are used for mixing homogenous raw materials
INDONESIA AQUACULTURE 87
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5.2.5 Processing
Figure 34 – The processing business segment value chain in Indonesian aquaculture sector
Table 56 shows an even split between operational costs and raw materials. (The
breakdown applies to Snapper, Barramundi and Pompano (Groupers are apart, as
discussed above.) Based on data gathered for medium to large enterprises, gross profit
margin may reach 15%.
INDONESIA AQUACULTURE 88
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Cost Species
Cost details
expenditure Snapper, Barramundi, and Pompano
Raw Wild caught, Farm raised,
40 %
materials & Imported
Labour Labour 10 %
Overhead expenses (water,
Operational 30 %
electricity and steam)
cost
Logistic 20 %
Total cost 100 %
The main activities of fish processing companies are washing, cutting, packing and
freezing. These production process steps are supported by quality assurance measures
such as incoming inspection, in-process inspection, checking of products with metal
detector and final inspection. Processing companies must adhere to the Good
Manufacturing Practices (GMP) specified within Indonesia’s SKP fishery processing
certification regime and must be HACCP certified.
5.2.5.3 Processing/trading
The wet cargo handling policies of cargo providers sets out the terms on which live
fisheries commodities are shipped. In general:
Outer layer coverings of styrofoam box must have minimum thickness of 0.10 mm
INDONESIA AQUACULTURE 89
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Inner layer coverings of box must have minimum thickness of 0.06 mm with
threefold wrapping with absorbent strip at the bottom of the box.
Processed commodities may be offloaded from one vessel and loaded to a different
one as commodities are traded. Trading vessels usually originate from countries such as
Hong Kong, Malaysia and Singapore.
The processing activities described above may take place aboard a carrying vessel.
Alternatively, commodities may be transported to a processing company and
processed there, before being shipped to destination markets in refrigerated containers.
5.2.5.4 Processing/challenges
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5.2.6 Logistics
Logistics is one of the glues holding Indonesia aquaculture together and is also one of its
biggest challenges as infrastructure is generally under-developed. There are two
principal business models:
Self-owned (owned by consigning company)
Third-parties (independent cargo service providers providing air, sea or land
carriage)
5.2.6.3 Logistics/challenges
Logistics is vital for the economic performance of any economy. Some problems that
frequently arise in Indonesia are:
Vast area, since Indonesia extends for more than 5,000 km from northwest to
southwest and has more than 6,000 inhabited islands,
With industry very much concentrated in Java, logistics offerings outside this region
are less in evidence and higher in cost, causing higher prices for goods
Poor infrastructure, such as lack of roads, chaotic seaports and overcrowded airports
-- the Achilles heel of the Indonesian economy, according to some.
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5.2.7 Equipment
The imperative of utilizing modern aquaculture equipment has yet to be understood for
its full impact across all segments. Not only are the barriers of affordability and
education relevant factors, local equipment choices are hampering outcomes for all
stakeholders. To reach its output potential and become a leading competitor in global
trade, Indonesia’s aquaculture sector is under pressure to advance in both quantity and
quality. Categorically, this relies on tools to improve rearing and harvesting practices
and makes the sale of equipment one of the most obvious business opportunities for
foreign companies.
Table 57 illustrates equipment with widespread use. The brief list only emphasizes the how
limited local choices are at this time.
Table 57- Equipment classification and function
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CMA CGM
Aquaria
Forestry
Kyodo
Supports farmers in
Water pump USD 50-75/unit
cleaning the pond
Trough
Berkley
Precise measurement of
Digital scale USD 25/unit
the fish weight
INDONESIA AQUACULTURE 93
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Hanna
Measurement to reveals
USD 23/unit acidity or alkalinity level
PH Meter
Oakton
On additional notes, end users know-how is still at an immature level, impeding adoption
process for higher resources maximization.
INDONESIA AQUACULTURE 94
Regulatory, policy and investment environment
Top-level aquaculture investors and other stakeholders
Prominent example of such initiatives would include the six-day NACA/World Bank
training programme in Surabaya in collaboration with the Ministry of Marine Affairs and
Fisheries. The aim of that initiative was to focus stakeholders on setting goals for
promotion of aquaculture food safety and proper supply chain management. The World
Bank has been an unflagging source of funding and technical support aimed at
enhancing Indonesian aquaculture.
The most recent cooperation initiative is a bilateral agreement between the Indonesian
Ministry of Marine Affairs and Fisheries and the Dutch aquaculture ministry. The
collaboration hopes to develop sustainable fisheries in Indonesia by 1) trimming post-
harvest losses for capture fisheries 2) encouraging broader adoption of good
aquaculture practices and 3) stimulating the business from the marketing and
distribution side.
Aside from G2G partnership programme, various B2B engagements are being
implemented as well in Indonesia. One notable example would be PT Aquafarm
Nusantara’s. One of the most prominent Swiss ventures on the ground, the company
owns a vertically integrated complex that house several parallel efforts from fingerling
grow-out to cultivation.
WorldFish in 2010 launched an initiative to help deter illegal fishing, attract buy-in from
financial entities and spur research into feasible aquaculture investment strategies.
Funding programmes have run with themes such as sustainable livelihoods and
sustainable farms.
Many fish farmers in Indonesia benefit from the Australian government’s financial support
for floating cage projects, and its credit facility programmes. USAID, the development
arm of the U.S. government, backs a major funding stream aimed at promoting
adoption of appropriate aquaculture technology in Indonesia. Various other incubator-
type initiatives have also worked to create closer ties between aquaculture-research
institutions and commercial players.
INDONESIA AQUACULTURE 95
Regulatory, policy and investment environment
Laws, regulatory framework and standards
The Ministry of Marine Affairs and Fisheries serves as the principal governing body for
marine sector planning and management. At the local level (district and sub-district)the
Marine and Fisheries Service of each of the relevant provinces is in-charge. Additional
supervision and support is applied through the establishment of the Technical
Implementation Units (Units Pengembangan Teknologi or “UPT”). These units serve a
function similar to that of the “extension” programmes of the U.S. Department of
Agriculture (USDA), which is to introduce appropriate technology directly to farmers.
Nationwide there are various classes of hatcheries and labs with over 600 individual units,
as shown by Table 58.
Since the Ministry of Marine Affairs and Fisheries has responsibilities in agriculture as well
fisheries, aquaculture technology transfer has not been functioning with priority focus.
Funding otherwise earmarked for smaller-scale farmers goes frequently undistributed.
Subsequently, UPTs are frequently being utilized as extensions to communicate and
disseminate novel technologies to municipal development centres throughout the
archipelago.
Indonesian law has various provisions in respect of designation, management and
development of its aquatic territory. Beyond that, it seeks to harmonize local business
practices and standards with those of global bodies. The laws, regulations, policies and
protocols that are of most practical import to foreign investors are discussed below.
INDONESIA AQUACULTURE 96
Regulatory, policy and investment environment
Laws, regulatory framework and standards
It may be noted that, in very general terms, Indonesian fishery legislation hews closely to
international regulations and codes like the UN Code of Conduct for Responsible
Fisheries (CCRF) and Catch Documentation Scheme and Catch Certification (CDS and
CC) for large industrial fisheries. Beyond that, Indonesia is in the process of becoming a
member of the Western and Central Pacific Fisheries Committee (WCPFC).
Table 59 - Fields related to the business framework
No. Mandatory Fields Detailed Remarks
Gov. Reg. No. 54 of 2003 pertaining to Fisheries
Enterprises, in which the issuance of business
licenses has been assigned to the municipalities
to expedite the overall process of investment.
Creating a conducive business To bolster the delegation provided above,
1
environment government has released Ordinance No. 32 of
2004, declaring that management of coastal
waters up to 12 nautical miles are where local
government carries out spatial planning for
aquaculture development
Ministerial Decree No. KEP. 01/MEN/2002 deals
Establishing Rules and Regulations
with monitoring activities related to
for the Standardization of
2 aquaculture products for human consumption
Aquaculture activities and
to ensure compliance with hygiene and
fisheries products
sanitation standards
In reinforcing shrimp revitalization programme,
government has issued Ministerial Decree No.
3 Regulation on Seed Production KEP 41/MEN/2001 in hopes of regulating entry,
procurement and distribution of shrimp
broodstock in Indonesia
Ministerial Decree No. KEP.02/MEN/2004,
divided covers:
4 Aquaculture Business Licensing o Premises establishment
o Commodities transporting vessels:
License good for one year
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Laws, regulatory framework and standards
6.2.5 Promotion
The Indonesian government has a vision of driving market expansion in aquaculture
through strategic initiatives. Trade shows are often used as the medium for threading
economic transformation and introduction of vast array of Indonesian aquaculture
commodities. In addition, educational exchange helps reinforce overall human
capacity and capabilities and connect with potential foreign investors with government
as a go-between.
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Regulatory, policy and investment environment
Laws, regulatory framework and standards
INDONESIA AQUACULTURE 99
Regulatory, policy and investment environment
Laws, regulatory framework and standards
of Fresh Water Fish (KBLI 03231), Fresh Water Fish Hatchery (KBLI 03236), Fishery
Processing Business including Salt/ Fish Drying and Other Water Biota Industry (KBLI
10211) and Smoke Fish and Other Water Biota Industry (KBLI 10212), Fishery
Processing (UPI) Business, Fermentation, Reduction/ Chemical Process, Surimi and
Jelly Fish Process (KBLI 10219), Fish product marketing, Distribution including :
Wholesale Fish Products and Export trade of Fish Product (KBLI ), are remark as
partnership
4. Fish Catching Business using catching ship of a size of 100 GT and/or over in ZEEI
catching Territory (KBLI 03111) need special licenses with Terms and Conditions
have been regulated in accordance with the Regulation of Minister of Maritime
and Fishery Number PER 12/MEN/2009 on Fish Catching Business.
5. Usage (Taking) and distribution of decorative coral/atoll from nature for
aquariums) KBLI 03119 and 46206 need recommendation from the Minister of
Maritime and Fishery.
6. Lifting of Valuable Items from a Sunken Ship’s cargo (KBLI 52229) need special
licenses according to Presidential Decree No. 19 of 2007 on National Committee
of Lifting and Using Valuable Items from Sunken Ship’s cargo.
7. Fishery Catching business using a catching ship of 100 GT size and/or bigger in
open sea catching Areas (KBLI 03111), Fishery Catching business using a catching
ship of 30 GT size and/or bigger in water areas beyond 12 miles (KBLI 03111), Sea
Sand Extraction (KBLI 08104) are 100% local capital.
1. Private fishery entities classified under small-scale business will be imposed with 1%
tax rate against trawling productivity and against market criterion price of the
given species.
2. Private fishery entities classified under small-scale business will be imposed with
2.5% tax rate against trawling productivity and against market criterion price of
the given species.
3. Companies and Institutions engaging in Aquaculture line of business and utilizing
natural fish fry are bound to be levied by 1% tax rate of the total commodities
sold by the company’s operational site.
4. Companies and Institutions engaging in Aquaculture line of business and
acquiring fish fry from Hatchery are bound to be levied by 0.5% tax rate of the
total commodities sold by the company’s operational site.
3. According to Gov. Reg. No. 52 of 2011 as amended by Gov. Reg. No. 1 of 2007
concerning income tax facility for investment in certain business fields and/or certain
regions, the income tax facilities that can be given may be in form of:
a. Net income reduction by 30% (thirty percent) of total investments; charged for
six years each at 5% per year;
b. Depreciation and amortization: The imposition of income tax on dividends
paid to foreign tax subject to 10% or a lower rate according to the double
taxation agreements, if any; and
c. Compensation for losses for more than five years with maximum ceiling of no
more than ten years.
Other pertinent aspects of the regulatory framework for investing in aquaculture are
addressed below (as summarized in table 59).
2. Establishing rules and regulations for the standardization of aquaculture activities and
fisheries products.
a) In order to make possible the implementation of a responsible and sustainable
aquaculture system, a set of Directives (Pedoman Umum - Pedum) has been
issued covering proper procedures for brackish-water shrimp culture and fish
In line with the vision and mission above, three development goals have been set for the
aquaculture sector, which are:
Three main policies will be followed in order to achieve the goals, undertake the mission
and realize the vision for aquaculture development, which are:
The aquaculture development programmes will be carried out through three core
programmes.
The chosen commodities were selected based on ease of cultivation, high growth rates,
affordability and with priority given to fulfilling the need for in-country consumption. The
commodities that the programme targets include Oyster, Milkfish, Goldfish, Tilapia,
Pomfret and Catfish.
PROLINDA has three core programmes supported by six support programmes which are:
1. The Development of Infrastructure for Aquaculture;
2. The Development of Seed Production Systems;
3. The Development of Production Systems;
4. The Development of Fish and Environmental Health Management Systems;
To develop National Fish Health Reference Laboratory and Strategy for disease
prevention
Successful intake of students in Norwegian institutions
To implement educational and training courses
To implement a final summing-up seminar
Fish Live Import Permit to Indonesia. Requires, inter alia, permit issued by Directorate
General for Aquaculture.
Fish Ship Transporter Permit (SIKPI). Categories established under Directorate General
for Aquaculture are:
Vessel operated by fishery-sector entity (Indonesian or foreign-flagged vessel)
Vessel operated by non-fishery-sector entity (Indonesian or foreign-flagged
vessel)
7.1.1 Hatchery
Bargaining power of suppliers
The broodstock that supplies the input for the hatchery segment is heavily dependent on
available natural stock. Many research facilities are still compelled to acquire
broodstock from the wild. Nevertheless, as broodstock can be maintained for long
periods, availability is not an immediate issue. For fish feed, companies already
operating or intending to set up operations have a wide range of alternatives, as
domestic feed producers such as Cargill, Japfa Feed and Central Proteina Prima have a
proven capability of producing consistently formulated feed. On the other hand,
vaccine is still largely dominated by foreign firms, especially in the eastern part of
Indonesia. This has resulted in market prices consistently near the price ceiling.
As local aquafarmers serve only the domestic market, the industry has not yet reached a
mature stage. Acquiring broodstock from overseas markets is not viable considering the
costs of importing. Thus, local aquafarmers have to concentrate on domestic supply
streams with a limited range of providers, indicating high switching costs
Hatcheries in Indonesia are still in the form of research facilities, although some
companies have expressed interest and have initiated provisional hatchery
programmes. This trend is apparent in Bali, as hatchery-based businesses gradually
supplant local research facilities like RIM.
Additionally, existing ground rules require that before undertaking any such initiative, the
company must submit a proposal to the Ministry of Marine Affairs and Fisheries for
ratification from the Directorate General for Aquaculture. As research facilities are under
the supervision of the Ministry of Marine Affairs and Fisheries, bypassing or taking over
their role would present some difficulty.
The competitive landscape in the Indonesian hatchery segment largely remains under
monopoly rule of regional research facilities. All new entrants must go through screening
and supervision procedures. Nevertheless, the growing number of small-scale hatcheries
is projected to disrupt the equilibrium over the next few years.
Because of monopoly control of the hatchery business, private hatcheries can only
produce the species grown in the research facilities.
7.1.2 Nursery/aquafarming
Bargaining power of suppliers
Forward integration is highly probable as local aqua farmers tend to bypass large
wholesalers and sell directly to restaurants, processing plants, and overseas end-markets.
This means increased product indispensability. However, when capture fisheries are
taken into consideration, the bargaining power of buyers is reduced, as the majority of
fish processing plants remain loyal customers of capture fisheries, effectively giving them
greater bargaining power.
Prospective entrants might benefit from low product differentiation, ease of access to
suppliers, and lack of distinct brands. On the other hand, required capital investment is
high, as investment permits, technology, and equipment are needed. Regulations,
particularly for export activities, appear to be stringent. Companies have to comply with
commodities traceability laws, which require costly investment to accommodate
operations.
Market rivalries are a major issue as competing companies is fighting to supply overseas
markets. Low product differentiation further reinforces competition intensity.
Raw material inputs of fish feed has minor segregation. One differentiating element is
business acumen and technical ability. Otherwise, feed-producing companies have the
freedom of choosing suppliers without high penalties.
Adopted technology within the fish-feed industry would likely affect buyer preferences.
The business entities capable of delivering the most consistent feed have the greatest
opportunity to flourish. In terms of labour, advancing technology has led to more
efficient and economical operation with less input of labour. All in all, the purchasing
power of buyers is moderate.
New market entrants are more likely to reap benefits from low product differentiation
and the relatively minor penalties for buyers who switch. Moreover, there is a significant
requirement for initial capital investment. Compliance with existing regulations is difficult
as well, considering the inconsistent structuring of relevant laws in Indonesia.
There are a few businesses operating in the feed segment in Indonesia. The market
structure resembles an oligopoly with each player operating within its own market share
and zone. Thus market penetrations will likely be met with a fair degree of effective
resistance by existing players.
Widespread use of trash fish is a constant impediment to the growth of the feed
segment. Lack of general awareness and urgency from local aqua farmers have stifled
mass adoption of fish feed as trash fish is considerably cheaper to acquire.
7.1.4 Vaccines
Bargaining power of suppliers
Production sources of fish vaccine are import-reliant, enabling price discrimination from
the supplier side. This has left potential buyers without alternatives and necessitates the
acquisition of raw materials from existing suppliers. To sum up, the bargaining power of
suppliers is high.
Acquisition of adequate business acumen and production skills is a real hurdle that new
entrants must somehow overcome. Additionally, the vaccine market of Indonesia has its
own, firmly-established market players. Attempts on market entry from foreign players or
newcomers may stumble since as competition structure has been rigid for some time.
The competition within the market is rigid, intense, and marked by a lack of product
differentiation.
The use of herbal remedies for treatment of fish diseases exist, albeit still in small-scale.
Thus, the threat posed by these products is still considered to be minimal.
7.1.5 Processing
Bargaining power of suppliers
The Indonesian seafood industry ranks among the largest in the world. The potential of
the sector for both domestic food security and exports is large. Most of the larger
processors are located in and around production areas such as North Sumatra. The rest
are based around Jakarta and Surabaya. Little processing is done for local markets.
Local processing activities include smoking or salting fish. About 60% of marine fish is
consumed by overseas market.
In general terms, entering this segment requires large operational capital investment
and, subsequently, certification of the production output. National and international
regulations are the main impediment to distributing products domestically or overseas.
Crustaceans and shrimp products do pose a threat to the stability of the fish business.
Fish consumption levels tend to decrease as substitutes catch on.
Physical carriers such as articulated trucks and well boats are the primary comparison
points to assess the industry. There are some cases of over-capacity within the industry;
nevertheless, the industry is relatively insignificant to automotive players, as mining and
manufacturing simply count for more. In conclusion, bargaining power of suppliers is fair
here.
Customers within this segment are increasingly applying pressure on logistics providers for
better pricing and modes of services as product differentiation is limited and there are
low penalties for switching. Some of the imminent threats include possible backward
integration from processing companies as cost-effective measures.
Operating within their current business model, achieving economies of scale is tough.
More often than not, providers have to resort to adoption of sophisticated, highly-
customized systems to differentiate themselves from the competition. Difficulty in
achieving economies of scale is a barrier to entry.
Competition revolves around price and services. Potential customers view logistics as
merely a pathway for cost-reduction. This is apparent when companies are operating
with excess capacity, resulting in price cuts. By inference, the competition level is high.
Backward integration is possible as companies are trying to integrate their operations in-
house. However, regardless of the tendency of companies to integrate, few have
managed to pursue integrated management very far up the supply chain. Therefore,
the substitute threat is moderate.
Competitive strength criteria are represented by market price, survival rate, readiness
to market, and cost.
The table below assesses drivers and inhibitors of each business segment in the value
chain system which will assist investors to better understand development of the industry
in the future.
Diverse methods of
aquaculture indicate excellent Some marine territories are
adaptability. located near to heavy
Indonesian aquaculture industries that generate
operations can produce a environmental pollution.
wide range of fish commodities Limited availability of skilled
Nursery/ workforce.
with established local and
aquafarming Rudimentary infrastructure in
international markets.
Excellent marine environmental remote areas hampers
conditions in the country transportability of commodities.
provide a high-quality Shortfall in proper nourishment
environment conditions for for species used in
aquaculture. aquaculture.
As euryhaline organism,
snapper can flourish in water of
any level of salinity, reducing
mortality rates.
Indonesia’s extensive
coastlines provide ideal
conditions for fish farming in
brackish-waters, while lakes
and ponds provide an
abundant resource for
freshwater cultivation.
Saltwater fish farming in
offshore floating cages is an
area that warrants closer
attention. The government has
allocated funds to support
small-scale fish farmers and
Objective Description
Destruction of mangrove, wetlands, and other sensitive
aquatic habitat by aquaculture projects.
Conversion of agricultural land to ponds.
Water pollution resulting from pond effluents.
Excessive use of drugs, antibiotics, and other chemicals for
aquatic-animal disease control.
Inefficient utilization of fish meal and other natural resources
for fish and shrimp production.
Environmental and Salinization of land and water by effluents, seepage, and
social concerns sediment from brackish-water ponds.
Excessive use of ground water and other freshwater supplies
for filling ponds.
Spread of aquatic animal diseases from aquaculture
organisms to native populations.
Negative effects on biodiversity caused by escape of non-
native species introduced for aquaculture, destruction of
birds and other predators, and entrapment of aquatic
organisms in pumps.
Disputes over land rights and forceful acquisitive of land by
large corporations, marginalizing local small-scale
aquafarming initiatives
Illegal aquafarming projects due to local people with no
technical knowledge and little capital starting small-scale
Social issues projects without formal permission. Potential for tremendous
damage, comparable to small farming initiatives in tropical
areas
Conflict with other industries for use of land and water as
passage to fishing areas or mangrove areas which are
needed for fuel production. Also, external factors such as
Organization Background
7.9 Recommendations
Main Recommendation
Market entry
Joint venture or consortium is favored when
strategy
risk/reward sharing is the common objective.
Appendices
12. Balai Besar Riset Pengolahan Produk, Bioteknologi, Sosial Ekonomi Kelautan dan Perikanan
(Marine Products, Biotech, and Social Economics Research Institute)
Address : Jalan KS Tubun Petamburan VI, Slipi, Jakarta Pusat, Indonesia
Phone : +62 (21) 53650157
Main commodities : Research on Aqua Commodities and Processing