From comparative to competitive superiority
A common mistake is to confuse the agronomic industry with agronomic businesses. Beware you don't fall into this trap. The agronomic industry is a system, or collection if you will, of agronomic businesses.
Of course, the more relevant and pressing question may be what are these agronomic businesses which combine to form the agronomic industry?
An agronomic business is a business which increases the value of agriculture's basic commodities.
So, agronomic businesses take what you grow down on the farm and make it worth more by, for example, taking the product and processing it, giving it added value.
An example of this is cashew nuts, in my opinion the finest and tastiest nuts known to man. Currently, Indonesian cashews are not processed, but are exported as seeds. Think of the possibility for added revenue if Indonesia kept those cashew seeds here and processed them before exporting them. It would mean extra revenue for the country and more jobs, which, in turn would enhance people's purchasing power. With increased purchasing power, people would buy more goods, which would create more jobs, and so on and so on. Think of it. If the agronomic industry can realize its goal of processing cashews before exporting them, all I can say is watch out America, here comes Indonesia.
According to Gatot Ibnu Santosa, director general of chemical, agricultural and forestry based industries, this is the challenge facing the agronomic industry in the globalization era. And to meet this challenge, the industry has prepared several strategies. As Gatot says, the "vision of the agronomic industry is to maximize the potential of the industry".
How does the industry plan to accomplish this noble goal?
Gatot and his directorate have mapped the agricultural commodities of each province. However, simply knowing the names of the commodities is not enough. Competitive value and efficiency are needed to realize the kind of revenue needed to move the agronomic industry forward.
If the industry can accomplish this, and there is no reason why it can't, agronomics will transform itself from comparative superiority to competitive superiority.
To do this, selective and effective technology is needed. This means the agronomic industry must work with other industries. For example, because fertilizers are needed for agronomics, a partnership with the chemical industry is necessary.
The agronomic industry, like all other industries in the country, was affected by the economic crisis which hit the country in 1997. Production fell, prices skyrocketed and the depreciation of the rupiah led to foreign debt and inflation.
However, the industry weathered the economic storm. Gatot said: "The agronomic industry will survive with 60 percent of production capacity."
But survival is not enough; prosperity and growth are the goals.
Ceres is the goddess of agriculture in Roman mythology, and PT Ceres may be thought of as the goddess of the agronomic industry. Founded in the 1940s by the Dutch, who were kind enough to give the company to Indonesia after Indonesia declared independence, Ceres is the king of chocolate here. Everyone knows and loves the Ceres chocolate sprinkles, which millions of Indonesians put on their bread. As we all know, bread is nothing without some chocolate on it.
Besides the sprinkles, PT Ceres also produces chocolate bars, chocolate wafers, chocolate-coated peanuts and biscuits. You have probably noticed a certain theme in all these products. That's right, chocolate.
The chocolate used by Ceres is made of cocoa mass, cocoa butter, milk and sugar, giving it a taste different from those cheaper chocolates which use substitute butter. Yeck!
Ceres processes over 40,000 MT of raw cocoa beans, making it one of the largest producers in Asia. Of this amount, 80 percent is exported. The company also produces bulk chocolate and cocoa for the food industry throughout the world.
However, in globalization era, Ceres has begun to concentrate on consumer products. PT Ceres markets products through Brands, including Silver Queen, Selamat biscuits, Ritz and Windmollen & Jago.
What makes PT Ceres the king of chocolate in Indonesia is the taste. Ceres produces quality chocolate, but it also makes sure that its chocolate is pleasing to the Indonesian palate. The difference in taste is in the beans, and PT Ceres uses the best cocoa beans from Indonesia. Ceres is certainly a star of the agronomic industry.
But if you want to talk about soy sauce, you must not fail to mention Bango soy sauce, produced by PT Sakura Anekafood. Since 1928, Bango soy sauce, the sauce with the Stork trademark, has been making some of the best soy sauce in the world by using black soybeans and palm sugar. With such fine ingredients there is no need to use chemicals in Bango soy sauce, meaning the sauce will last for 20 years. This is good news if, like me, you aren't a big soy sauce user. Just buy a big bottle of Bango and you're good for the next 20 years.
Besides using the best soybeans and palm sugar in its soy sauce, Bango is produced with the most sophisticated technology. German processing technology allows the company to produce the highest quality sugar. As PT Sakura director Eppy Kartadinata said, "We always keep up with technological developments."
Bango produces one million bottles of Bango soy sauce per month, and exports to America, Australia, Asia, Europe and South Africa.
According to Eppy, PT Sakura wants "to develop the agronomic industry in Indonesia. At the moment, we have not dealt with it seriously; we need to learn a lot from other countries."
With that kind of attitude, the agronomic industry in Indonesia, like the stork, will fly as far and high as possible, and Bango soy sauce will be flying along with it.
Simas margarine and Bimoli cooking oil are two more stars of the agronomic industry. Simas margarine is made from quality blended vegetable fats and is vitamin enriched, cholesterol-free, soft and delicious, and doesn't smell funny like some other margarines. This is the margarine to use if you, like me, are an avid cook, whipping up cakes and cookies and other yummy treats in your spare time.
Speaking of cooking, Bimoli cooking oil is made from 100 percent palm oil, physically refined, bleached and deodorized, which I believe is the most vital part of the whole process.
This high-quality cooking oil is a rich natural source of beta-carotene and is cholesterol-free. It is also refined and packaged according to international-standard quality controls, so you can be sure this cooking oil will retain its freshness and quality at all times.
If you're serious about your cooking, this is the cooking oil for you.
With such strong companies producing these kinds of quality products, it is a good bet that Indonesia's agronomic industry will soon be a competitively superior industry, and will be one of the industries leading Indonesia into the globalization era.
Table A: Export Growth for 10 Main Commodities in Agro Industry Sector
1996 1997 1998 Commodity Volume Value Volume Value Volume Value ------------------------------------------------------------------------ Palm Oil 685,594 338,383 1,519,227 747,044 900,220 428,323 Coconut Oil 333,450 236,206 547,732 341,553 231,909 123,510 Canned Fish 36,977 100,863 26,298 81,050 41,279 113,177 Cocoa Powder 48,727 111,035 46,418 124,766 51,293 110,589 Animal Feed 1,649,301 217,778 1,566,915 148,200 1,307,828 102,482 MSG 69,329 76,919 55,688 73,583 119,857 76,347 Regular Cigarettes 23,079 72,063 29,387 90,470 19,094 61,970 Margarine 12,807 7,766 145,415 45,205 110,186 54,978 Cashew Nuts 27,886 23,751 29,667 19,152 27,076 31,154 Canned Fruit 119,027 86,897 69,487 48,459 38,353 26,056
Source: Ministry of Agriculture
Volume: Metric Tons
Value: US$000
Table B: Indonesia's Agro Industry in the Sixth Five-Year Development Program
Sixth Five-Year Development Program Difference
** First four years ** between
1998/1997 Sector 1995 1996 1997 1998 (percent) ------------------------------------------------------------------------ Total Businesses 2,068 2,213 2,416 2,416 0 Workers 817,466 894,302 971,896 953,020 -1.94 Value of Production (Rp billions) 25,240.30 28,552.92 40,160.42 38,554 -4 Value of Investment (Rp billions) 23,256.30 24,182.98 27,378.48 27,378.48 0 Value of Exports (US$ millions) 1,650.76 2,115.72 2,387.15 1,962.87 -17.77
Source: Agro Industry Directorate (1999)