PTPN I Prepares Scheme to Purchase Smallholder Coffee to Strengthen Global Market Position

PT Perkebunan Nusantara (PTPN) I is preparing a scheme to purchase coffee from smallholders as part of a strategy to strengthen partnerships with farmers while enhancing the competitiveness of Indonesian coffee in the global market. PTPN I Corporate Secretary Aris Handoyo said the partnership model being developed adopts a concept similar to other commodities such as plasma palm oil, smallholder sugarcane, and processed rubber materials (bokar) that have already matured. “There is a plan for PTPN going forward, possibly a strategy to purchase community coffee, just like palm oil has plasma, then there is smallholder sugarcane, and for rubber there is bokar,” Aris said during a media talk in Jakarta on Monday evening. Through this scheme, PTPN I has the opportunity to buy coffee produced by communities and then integrate it into the company’s supply chain and marketing on a sustainable basis. In addition, the state-owned plantation company is also expanding guidance programmes for coffee farmers located around the company’s operational plantation areas. “PTPN also has a plan to provide guidance to coffee farmers in its surrounding areas,” he stated. Aris considers coffee to be a strategic commodity with bright prospects because it has become a widely consumed beverage in various countries. As a core commodity for the company, coffee development remains a priority even though it is not included in the downstreaming programme currently being promoted by the government in several sectors. PTPN I has a long history in the coffee industry, especially in East Java through the Ijen and Banaran areas, which are known for producing high-quality coffee. Coffee from the Ijen region has a strong reputation in the international market, including the Blue Fire Coffee product, which has been widely marketed to Italy and several other countries. In addition to expanding partnerships with farmers, the company is also continuing to rejuvenate old plants and utilise under-optimised land for coffee development. Aris emphasised that PTPN I will continue to increase Arabica and Robusta planting areas according to land characteristics while strengthening community guidance to support the growth of the national coffee industry. Previously, PTPN I President Director Teddy Yunirman Danas said that supply chain integration from the upstream to downstream sectors is the company’s main strategy for increasing the competitiveness of Indonesian coffee. “This transformation is the company’s long-term commitment to presenting Indonesian coffee with global competitiveness through strengthening plantation productivity, processing efficiency, and developing value-added products,” Teddy said in a statement in Jakarta on Friday (12/6). In developing the coffee commodity, PTPN I focuses on two main types, namely Arabica and Robusta coffee. For Arabica, the company develops varieties such as Andung Sari 2 K, Gayo, and Kamasti with productivity potential of up to 850 kilogrammes per hectare. Meanwhile, for Robusta, PTPN I uses a number of superior clones such as BP 42, BP 409, BP 939, and Tugusari 6, which have productivity potential of up to 1,000 kilogrammes per hectare. The selection of these varieties is carried out to produce coffee with quality that meets the needs of the global premium market, including in terms of flavour and production consistency. The strengthening of PTPN I’s coffee supply chain is supported by the integration between plantation areas and modern processing facilities spread across several regions, including Banyuwangi, Jember, and Banaran. In East Java, PTPN I Regional 5 manages a number of Robusta coffee production areas, including Bangelan Plantation in Malang, Ngrangkah Pawon Plantation, Renteng Plantation, and Silosanen Plantation. The company is also developing the Java Coffee Estate (JCE) on the slopes of Mount Ijen as part of premium coffee development. Meanwhile, in Central Java, PTPN I Regional 3 operates coffee processing facilities at Banaran Plantation as well as several production areas such as Sukamangli, Ngobo, Getas, and Jolong. Through this strengthening of upstream-downstream processes, PTPN I’s coffee products not only target the domestic market through premium brands such as Banaran Coffee but have also penetrated export markets to a number of countries with premium coffee consumption, such as Japan, the United States, and the European Union region. PTPN I is targeting the strengthening of the national coffee ecosystem to increase the commodity’s added value while reinforcing Indonesia’s position in the global market as a producer of quality coffee.