Certification and Its Role in Enhanching

Feed Industry Competitiveness

in Indonesia*)

Hadrian Sjah Razad

Director of Development
PT. SUCOFINDO (Persero)

*) Presented on The International Conference : Sustainable Feed Chain Development in Indonesia, Bandung, 14 July 2010

• SUCOFINDO at a glance
• The Current Changing Condition
• Sector Trend & Impacts
• Industry Standards & Quality Requirements
• What is Certification?
• Benefit of Certification
• SUCOFINDO & Feed Safety Certification
• Accreditation & Approval for SUCOFINDO

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State Owned Company (BUMN)

Established on 22nd October 1956

Shareholders
ִ 95% Indonesian Govt.
ִ 5% SGS, Switzerland

• Customer Focus : To fulfill customers expectation by

delivering innovative and diversified service, complying
to standard and quality
• Competence : To provide reliable and qualified human
resources according to the standard of professionalism
and competition
• Integrity : To highky respect honesty business ethics,
and commitment fulfillment to the stakeholders
• Teamwork : To bring forward team coorperation and
collaboration with the third parties to achieve
organization effectiveness and synergy

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  BSN  PSB Singapore
 SGS Geneva  SIRIM Malaysia
 ASTM USA  GAFTA
 NKKK Japan  UL USA
 NATA Australia  GMP+ International
 FOSFA UK  CCIC China
 RWTUV Germany  INSPECTA Ceko
 IFIA UK  Etc.

• Increasing living standard

– lack of hunger creates concerns beyond „getting enough food“
– urbanisation „remotes“ agriculture to nostalgy

• Reduced risk of war

– importance of self-sufficiency decreasing

• Global trade with food and feed

– retailers buy cheap AND quality everywhere, but also ask for
– guarantees that the products are safe

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• Consumers
– ask except of low prices: for safe and high quality food
from healthy and „happy“ animals,

• Society
– demands compliance with animal welfare, environmental
protection and the principles of sustainability

• Legislative
– concentrates on feed and food safety, transparency and
tracing back (but also increasingly on animal welfare)

• Feed Industry  to be competitive, it is

not any more enough to offer cheap
products; except of low prices, the market
asks also for:
– high quality feed
– nutritious and healthy
– safe and no risk products
– animal well being
– sustainable production

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General:
• Emphasis on market-driven systems;
• Role of private sector important;
• Smallholders becoming commercialized; &
• Agribusiness & agro-industry policy reforms &
investment accelerating pace of Agribusiness -
Agroindustry development.

Feed Industry as a part of Agrifood Systems:

• Soaring food prices - primary production more viable
• Higher incomes – demand for high value commodities
• Technological changes - value addition
• Trade liberalization - cross border demand

• Urbanization - product quality & delivery standards

• Changing diets - more meat, fish & fruits

• More women earning - processed or pre-prepared

• Global manufacturing - value addition

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Organizational & Institutional Changes:
• Growing concentrations - retail & processing
• Larger agribusiness enterprises - economies of scale
• Increasing private sector standards – food quality & safety
• Food transactions - increasing use of contracts
• Retailers/manufacturers - rely on specialized
procurement/dedicated wholesalers
• Sale of food - supermarkets replacing local markets

Feed Industry as a part of Agrifood Systems:

• Soaring food prices - primary production more viable
• Higher incomes – demand for high value commodities
• Technological changes - value addition
• Trade liberalization - cross border demand

• Urbanization - product quality & delivery standards

• Changing diets - more meat, fish & fruits

• More women earning - processed or pre-prepared

• Global manufacturing - value addition

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Positive Effect:
• Increases value addition opportunities.
• Agro-processing include feed processing
stimulates demand & market size.
• Exporters/agro-processors provide crucial inputs
& services.
• Agro-industries stimulate innovation.
• Encourages productivity & improves quality

Negative Effect:
• Standards and contracts difficult for small-
holders.
• Small-scale agro-processors unable to compete
with large scale manufacturers.
• Traders in local markets squeezed out by
specialized procurement practices & certified
products.

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• Industry standards:
– Manage risks relating to product safety & quality;
– Enable comparisons of prices between suppliers,
– Reduce transaction costs; &
– Strengthen consumer confidence & loyalty.
• Branding & labels can differentiate products.
• Certification informs consumers about supply chain practices.
• Standards ensures consumer protection & provides both
incentives and sanctions for improvement of product quality &
safety.

• A process that involves an independent body

(certification body) reviewing and auditing a
company’s management system.

• Its purpose is to verify the compliance of a

company’s management system to the requirement
of the standards.

(based on ISO term)

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 Increased customer
confidence.
 Increased image and
competitiveness of the
company.
 Increased opportunities
when entering global
markets.

• GMP+FSA
– Approved Certification Body Since 2002 by The GMP+ International
– 4 Approved GMP+ Auditors
– 33 Organization certified in Indonesia (2010), 16 Organization by
Sucofindo
• HACCP System
– 22 Certified Organization (2010)
– Accredited by KAN
• ISO 22000:2005
– 2 Certified Organization (2010)
• PBSF (Plant-Based Stock Feed) – AQIS Australia
– 15 Organization Audited

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SMK3

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