INDONESIA A ‘SLEEPING GIANT’ IN COCOA

INDONESIA A ‘SLEEPING GIANT’ IN COCOA

INDONESIA A ‘SLEEPING GIANT’ IN COCOA

| Michael Bleby

Kraft Foods, the world’s biggest confectionary company, has Indonesia in its sights as it seeks to increase productivity in a handful of producer countries and boost regional sourcing of raw ingredients for Australia and New Zealand-made product.

While Indonesia is one of six countries, along with Ghana, Ivory Coast, India, Brazil and Papua New Guinea in which Kraft, which bought chocolate giant Cadbury in 2010, is investing to boost productivity over a 10-year period, it has greater scope to make gains than larger African producers, the director of corporate affairs for Australian and New Zealand, Simon Talbot, says.

“It is a bit of a sleeping giant in cocoa,” Talbot says. “We’re quite bullish in terms of productivity gains there. If you look at Indonesia compared to Africa, you’ve generally got better infrastructure, better levels of education, literacy, so in terms of farmer education, the gains you can get by developing good agricultural practice and the uptake should be faster. So we’re quite confident.”

Rising incomes in emerging markets are boosting demand for snacks and sweets and with the International Cocoa Organisation (ICCO) predicting demand will outstrip supply in coming years, manufacturers are keen to increase production of cocoa. Kraft, which last month spun its snacks division into a new standalone company, Mondel?z International, is seeking to do that by spending $400 million over 10 years to bring about productivity gains and improve conditions in farming communities.

The so-called Cocoa Life program builds on a program started by Cadbury in Ghana, India and the Dominican Republic. Of the planned $400 million, the company will spend $100 million in Ivory Coast alone to help 75000 farmers double their productivity. The gains arguably are greater in Indonesia and Papua New Guinea, Talbot says.

Productivity can be boosted even with relatively simple changes to farming practices, he says, citing the example of a farm in Sulawesi, Indonesia, where “decent sustainable practices” have boosted production from 400kg per tonne to between 1.2 tonnes and 1.4 tonnes.

“We’ve seen ... a lot of work done around very low yield grades and very simple improvements that can double or triple supply,” he says.

Indonesia and Papua New Guinea supply 23 per cent of the cocoa used in the Australia-New Zealand market and the company can double that proportion just by making efficiency gains, he says. Indonesia joined the peak industry body, the ICCO, only last month.

The company will make its first investments under the program by March next year.

Sustainability initiatives in the cocoa business are nothing new. In fact, an ICCO survey identified as many as 64 initiatives being implemented by 60 agencies or companies. The problem, rather, is too many separate projects that are not co-ordinated and can even compete with each other. Last week, Mars Chocolate said it would extend a sustainability initiative it began in Indonesia. Nestlé aims to source 15 per cent of its cocoa globally from farmers supported by its own sustainable development program by next year. Talbot says Mondel?z has no plans to sign up with other producers.

“This is the world’s biggest chocolate company saying, ‘When we buy cocoa, there is going to be a new standard in terms of the way we treat farmers and the way farming practices are undertaken’,” he says. “We’re not particularly concerned which variety standards may already sit or exist underneath the Cocoa Life system. We can work with most of those standards.”

Kraft’s announcement, and the recent ones by Mars and Nestlé, coincide with the start of a key meeting this week of the global industry in Abidjan, Ivory Coast. In 2011-12, Africa produced 2.83 million tonnes, or 71 per cent, of the world’s global cocoa output of 4 million tonnes. Asia-Oceania came a distant second with 590,000 tonnes, or 15 per cent, while Latin America produced 574,000 tonnes, or 14 per cent, ICCO figures show.

BRW.com.au

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Artikel ini dibuat oleh Penulis Terverifikasi GNFI, dengan mematuhi aturan menulis di GNFI. Isi artikel ini sepenuhnya menjadi tanggung jawab penulis. Laporkan tulisan.

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Akhyari Hananto
@akhyari

Akhyari Hananto

http://www.goodnewsfromindonesia.org

I began my career in the banking industry in 1997, and stayed approx 6 years in it. This industry boost his knowledge about the economic condition in Indonesia, both macro and micro, and how to understand it. My banking career continued in Yogyakarta when I joined in a program funded by the Asian Development Bank (ADB),as the coordinator for a program aimed to help improve the quality of learning and teaching process in private universities in Yogyakarta. When the earthquake stroke Yogyakarta, I chose to join an international NGO working in the area of ?disaster response and management, which allows me to help rebuild the city, as well as other disaster-stricken area in Indonesia. I went on to become the coordinator for emergency response in the Asia Pacific region. Then I was assigned for 1 year in Cambodia, as a country coordinator mostly to deliver developmental programs (water and sanitation, education, livelihood). In 2009, he continued his career as a protocol and HR officer at the U.S. Consulate General in Surabaya, and two years later I joined the Political and Economic Section until now, where i have to deal with extensive range of people and government officials, as well as private and government institution troughout eastern Indonesia. I am the founder and Editor-in-Chief in Good News From Indonesia (GNFI), a growing and influential social media movement, and was selected as one of The Most Influential Netizen 2011 by The Marketeers magazine. I also wrote a book on "Fundamentals of Disaster Management in 2007"?, "Good News From Indonesia : Beragam Prestasi Anak Bangsa di dunia"? which was luanched in August 2013, and "Indonesia Bersyukur"? which is launched in Sept 2013. In 2014, 3 books were released in which i was one of the writer; "Indonesia Pelangi Dunia"?, "Indonesia The Untold Stories"? and "Growing! Meretas Jalan Kejayaan" I give lectures to students in lectures nationwide, sharing on full range of issues, from economy, to diplomacy

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