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Salim Group signs R&D agreement with Dutch JV to boost Potato Production in Indonesia

The Salim Group, one of Indonesia's largest business groups, signed an R&D agreement worth $10 million with seed producer East West Seed Indonesia - a JV between Enza Zaden and East West International - in The Hague on Friday (22/04) to boost potato production in Indonesia (Courtesy: Jakarta Globe)

The Salim Group, one of Indonesia's largest business groups, signed a research-and-development agreement worth $10 million with seed producer East West Seed Indonesia in The Hague, the Netherlands last Friday to boost potato production in Indonesia and take part in efforts to improve local farmers' welfare.

Glenn Pardede, President Director of East West Seed Indonesia:
 

"“The main problem for potato farmers in Indonesia today is the lack of quality seed potatoes as a result of the import restrictions.”

"We will contribute our experience in development and production of vegetable seeds to improve the quality and availability of seed potatoes in Indonesia.”

"We believe that that will benefit both farmers and consumers in Indonesia."

East West Seed Indonesia (also called "Cap Panah Merah" by its Indonesian name or abbreviated to "EWINDO") is a joint venture between Dutch companies Enza Zaden and East West International, with both specializing in seed propagation and the development of hybrid varieties.

Glenn signed the agreement with Indofood Sukses Makmur director Paulus Moleonoto, who acted in his capacity as a Salim Group representative, at a business forum on the sidelines of President Joko Widodo's state visit to the Netherlands.

Paulus said better seed and cultivation technology will raise Indonesian farmers' productivity up to 25 tons per hectare in one harvest cycle, or double what it is at present. This compares to 40 tons per hectare in China and 50 tons in Europe.

Paulus Moleonoto:
 

“Through this collaboration, we contribute to a sustainable supply chain that benefits the environment, improves crops and the availability of healthy food and benefits all stakeholders.”

"The agreement would also empower farmers with better technology, higher productivity, and a stable market. We are determined to create a sustainable supply chain."

Other collaboration partners for this project include HZPC, the innovative world leader in potato breeding, seed potato trade and product concept development and the Syngenta Foundation for Sustainable Agriculture.

The current demand for potato seeds in Indonesia stands at 300,000 tons per year, worth nearly Rp 3 trillion ($228 million).

The agreement is deemed one of the most strategic reached during the president's visit, as the Salim Group controls a large part of Indonesia's food industry.

The world's largest instant-noodle producer, Indofood Sukses Makmur, is part of the Salim Group.
 

The Project

Indonesian potato farmers are struggling to keep their business healthy.

Indonesian potato farmers are struggling to keep their business healthy. Strict import restrictions were implemented in 2003 after an imported seed lot turned out to be infected with a harmful nematode (Golden Cyst). Indonesian potato yields have decreased by 60% since then. Potato farmers in Indonesia realize 10-12MT / hectare, whereas their European counterparts produce 5 times that amount per hectare.

Their low productivity results in high consumer prices and low potato consumption. In Indonesia, consumers consume 4.7kg/capita/year, compared to 10kg/cap in China, 17kg/cap in Japan, and 87kg/cap in Europe.

By signing the Memorandum of Understanding, EWINDO and the Salim group plan to:
 
  • conduct a feasibility study into breeding Indonesian seed potatoes
  • select new potato varieties for processing and culinary use
  • increase potato production and sales to meet with market demand
  • produce and sell potatoes for the open market
  • develop and brand high-end fresh potatoes
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