RI's flower industry a late bloomer

RI's flower industry a late bloomer

JAKARTA (JP): A vast country blessed with a wealth of natural
resources and a fertile tropical climate, Indonesia should
rightfully belong among the top ranks of the world's flower
producers.

But studies show Indonesia's flower production lags far behind
many other countries, even small ones like the Netherlands, the
world's largest producer of flowers.

According to the Indonesian Flower Association (Asbindo),
production in the country last year reached Rp 57.5 billion
(US$23.59 million), a fraction of the US$250 million recorded by
neighboring Malaysia.

A paltry 0.5 percent of Indonesia's production finds its way
to the world's floricultural market. Most of this amount is
exported to Singapore, which then reexports the flowers after
hiking prices by more than 100 percent.

The association predicts that by 2005, exports of flowers will
reach between $310 million and $714 million in a world market of
$120 billion.

Ismeth Abidin, an advisor of the association, attributed
Indonesia's low production to the poor infrastructure in the
industry, encompassing the quality of human resources, seedling
technology and the distribution system.

"We are far behind other countries in terms of infrastructure
for the flower industry, although we have so much potential,"
Ismeth said.

Indonesia still trails other countries in cultivation of
seedlings, he said, despite the fact that the country was the
second largest producer of the germ plasm, the material to
develop seeds.

Most of the seedlings in the country are still imported, and
their import makes up between 30 and 35 percent of the total
production cost, he said.

This inevitably caused higher prices of flowers in Indonesia.
A bunch of flowers selling for Rp 5,000 to Rp 7,000 here would
cost around Rp 1,200 in Malaysia, he said.

Developing seedlings for new species could take about seven
years, he said, adding that Indonesia would never catch up with
the rest of the world at this rate. In the Netherlands, there are
13,500 kinds of species, and about 3,000 in Thailand.

"We need more cooperation with foreign investors with better
technology, like Switzerland, to develop better seedlings," he
said.

Ismeth said another challenge was the poor distribution of the
products due to the inefficient transportation system.

"We are not ready to export the flowers using our own
transportation system," he said.

Airlines would rather carry more lucrative commodities than
flowers.

Ismeth said changes in the situation would not be achieved
without the support of the government.

He said the government had yet to fully participate in the
floriculture development. The industry still lacked incentives
and the value-added tax was very high.

"One has to provide at least Rp 30 million to manage a hectare
of flowers," he said, adding that the government should subsidize
the industry to improve technology.

"Upgrading the infrastructure takes about 20 years of
research, and we need to start from now."

He touted the rewards to be gained. "Flower production can
contribute as much as Rp 1.5 billion per hectare of land, but we
currently generate about Rp 950 million."

Prospects

A concerted strategy will help the industry develop, Ismeth
said.

"We can expect to contribute 10 percent of the world's supply
of flowers by 2005, or around $12 million, if we take stock of
our strength and weaknesses," he said.

"Judging from the amount, the world's largest producers of
flowers will face barriers of limited land areas and high
production costs. They would most likely shift their attention to
Asian countries, and this is when we have quickly grab the
opportunity."

Indonesia still has about 60,000 hectares of land available
for floriculture estates. These are located on elevations similar
to those of Columbia, which is the second largest flower
producers in the world, he said.

Independent associations like Asbindo, which groups 20 medium
to large floricultural companies, can continue taking an active
role in the development of the industry.

Through conducting a monthly forum for information exchanges
on seedling cultivation and technology, the companies can expand
their business networks. Asbindo is also seeking to lower the
production costs by allowing its members to place collective
orders for materials such as seedlings collectively.

More importantly, the association is at the forefront in
administrative matters, including setting quality and price
standards, as well dealing with government regulations.

Ismeth said the association recorded about Rp 40 million in
profit last year from production on about 120 hectares of land.
He said the companies contributed about 60 percent of the
domestic market production.

Asbindo plans to use the profit to establish a distribution
center in the country, which would be used to determine the
standard of the floricultural products. (das)