Indonesia Aquaculture Outlook 2022 (English)

INDONESIA AQUACULTURE OUTLOOK 2022 Digitizing the Aquaculture Industry for Sustainable Food System in Indonesia

Message from the CEO "Aquaculture, not the internet, represents the most promising investment opportunity of the 21st Century."

- Peter Drucker Aquaculture is one of the most promising industry in Indonesia, considering the vast natural resources we have that could support its development. Indonesia has the chance to become a pioneer in the global Aquaculture sector, but it is oftentime overlooked by the general public and mass media.

This becomes one of the reasons why eFishery is holding Indonesia Aquaculture Outlook 2022, as a forum to discuss and define the future of Aquaculture, especially in Indonesia. It is time for us to focus on building the sector that can potentially create a great impact for the world.

Aquaculture products are the most efficient animal protein, based on the use of resources and the resulting carbon footprint. The habit of cultivating fishery products has also been a generational culture in Indonesia. All there is left for us to do is to optimize it through growth acceleration, supported by the forethought and information updates from yearly projections.

Gibran Huzaifah Co-Founder and CEO of eFishery

Our target is to make Indonesia the biggest Aquaculture producer in the world in the span of 20 years, but we can only achieve this through collaboration and accurate strategies.

Global Population Condition In the Year

Global Population

2050 10 Billion As of 2050, the global demand for animal protein will grow up to

52%

2019

2050

Animal Protein Sources Based on the Use of Resources for Production Aquaculture production is highly resource-efficient

Feed Conversion Ratio (edible meat/100 kg of feed)

1.1 61 kg

2.2 21 kg

Based on the use of resources, farmed fish products is the most efficient animal protein source with the lowest Feed Conversion Ratio (FCR).

For each 100 kg of feed, fish farming can produce 61 kgs of edible fish meat. The number is extremely low compared to cattle farming that can only produce 4-10 kg of edible fish meat.

3.0 17 kg

4-10 4-10 kg

Feed Conversion Rate (FCR) of Fish Farming is

~89%

more efficient compared to that of Cattle Farming.

Carbon Footprint Comparison from Each Animal Protein Sources 25 Beef

Average emission - 20kgCO2eq

Lamb 6,5 Pork 4,5 Chicken 1,6 Fish 0

Source: Our World in Data

Greenhouse Gas Emitted During Fish Farming is

15x

Lower Compared To That of Cattle Farming

10

20

30

Greenhouse Gas Emission per 100 grams of protein (kilograms of carbon dioxide equivalents; kgCO2eq)

In addition to being the most resource-efficient animal protein source, fish farming also emitted little amount of carbon footprint in comparison to other animal protein sources.

For every 100 grams of fish, the greenhouse gas emitted is only 1,6 kgCO2eq, far lower compared to what is emitted by cattle farming, which is 25 kgCO2eq.

The World’s Fishery Sector

World’s Farmed and Capture Fisheries Projections 1980-2030

In the Last 40 Years, Aquaculture is one of the Fastest Growing Sector

Capture Fishery Source: Food and Agriculture Organization

Farmed Fishery

●

$9.4 Billion per year

●

CAGR 18.7%

Global Fishery Products Consumption The projection for fishery production up to 2030 in the previous page is supported with the projection of fishery products demand, which is also expected to grow in the years to come.

51%

49%

Present Source: Food and Agriculture Organization

VS

38%

62%

Farmed Fishery Captured Fishery

Future

Deep Review of Aquaculture Sector

Top 5 Aquaculture Producers in 2020 (in Tonnes)

70.000,00

60.900,36

60.000,00

50.000,00

Indonesia is the second largest Aquaculture producer in the world, despite being the biggest archipelago in the world.

40.000,00

30.000,00 13.300,80 20.000,00

12.504,20 7.790,55

5.750,16

10.000,00

0 China

Indonesia

India

Source: OECD-FAO Agricultural Outlook 2021-2030

Vietnam

Peru

Indonesia also in possession of larger bodies of water area percentage, compared to China as the biggest Aquaculture producer in the world.

Indonesia’s Aquaculture Potential Total Production Value (US$)

12 Billion Source: Ministry of Marine Affairs and Fisheries, Republic of Indonesia

●

6,5 Million Ponds

●

2,5 Million Fish Farmers

Aquaculture Production in Indonesia 5,86B 5,75B 6.00 B

3,99B

4,28B

4,36B

4,95B

5,57B

5,54B

5,68B

5,37B

3,16B

4.00 B

2,76B 2,36B

2.00 B

0.0 2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Despite being affected by the 2020 pandemic, the Aquaculture production in Indonesia in the last 12 years is growing stably. However, the growth is too small, considering the potential Indonesia has, which is why we are in need of acceleration.

Source: Ministry of Marine Affairs and Fisheries, Republic of Indonesia

Aquaculture Production in Indonesia by Commodity Pangasius 8,5% Carp

Milkfish 18,6%

8,0% Gourami 3,0% Pomfret 0,9%

Catfish 19,0%

Tilapia 22,6%

Shrimp 19,5%

Source: Ministry of Marine Affairs and Fisheries, Republic of Indonesia

At the moment, Indonesia has 8 feature commodities of Aquaculture, with the top 3 commodities being Tilapia, Catfish, and Shrimp.

Fishery Product Consumption Number in Indonesia

80

60

40

20

0 2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

The increase of fishery production in Indonesia is supported with a market that’s ready to take up and consume the produces. In addition to export, Indonesia is also ready to take up the fishery products, with a national fishery product consumption number that has reached the number 60 kg/capita.

Shrimp Farming Segmentation Based on Density Extensive

Semi-Intensive

Intensive

Shrimp Density

<80 /m2

80 - 120 /m2

121 - 500 /m2

Productivity

~0,2 tonne/ha/cycle

~4,55 tonne/ha/cycle

~13,64 tonne/ha/cycle

Feed

Natural (algae)

Factory-Made

Factory-Made

Threat of Disease

Low

Medium to High

High to Very High

Based on the actual data by Ministry of Marine Affairs and Fisheries, Republic of Indonesia, Indonesia’s current shrimp production rate is still below 1 Million tonnes (911.200 tonnes in 2020) with the majority of it from extensive shrimp farms. However, with the right approach and farming system, Indonesia’s shrimp production could reach the number of 2 million tonnes.

The profit margin of intensive shrimp farming is estimated to be much higher than other commodities, reaching 30-60% for every harvest, compared to that of catfish farming that is only around 15%. With that knowledge in mind, intensive shrimp farming that is supported by the right technology is effective in accelerating the economical growth in Indonesia.

Shrimp Production Estimate in Indonesia

2.057.283 Tonnes Source: eFishery’s Research Team

Global Fish Stock and Productivity Escalation Farmed Fishery Scenario Capture Fishery Scenario MILLION TONNES

Total Baseline Captured Baseline

In the long term, the trend and productivity potential of Fishery continue to grow. However, by building a conducive environment, facilitated by supporting technology, the production rate can surpass the baseline numbers.

Source: Béné, et al., 2015

The Use of Technology for Aquaculture Sector’s Productivity Acceleration

End-to-End Aquaculture Value Chain by eFishery

2 1

Creating an integrated solution for Farmers

3

Discussing and collaborating with Farmers

5

Creating real impact for thousands of Farmers and millions of people in Indonesia

4

Assist and support Farmers’ growth and productivity

Distributing Farmers’ best Aquaculture harvests all over the country

eFishery’s Aquaculture Ecosystem

30.000

eFishery’s products and services are available and used by thousands of Farmers in

250+

2.300

Cities/Districts in Indonesia, and counting.

2020

2021

eFeeder’s Technological Evolution eFeeder is one of eFishery’s feature products. The innovation has consistently contributed in increasing feed effectivity and efficiency, thus creating a better business quality for Indonesian Farmers.

2014

2016

eFeeder 1.0

eFeeder 2.0

Speeds up harvest cycle up to

Increasing feed efficiency up to

Boosting production capacity up to

74

30%

26%

days

2017

eFeeder 2.1.0

Raising Farmer’s revenue up to

45%

eFishery’s Aquaculture Ecosystem

Fish Farming Ecosystem eFisheryKu

Shrimp Farming Ecosystem eFarm

In the hopes of building an optimal Aquaculture ecosystem, eFishery classifies its Aquaculture ecosystem into two, Fish Farming Ecosystem and Shrimp Farming Ecosystem.

Both ecosystems have different characteristics, which in turn mean that they need different Farmers’ support.

Shrimp Farming Ecosystem An accessible facility for Shrimp Farmers, created to optimize the productivity of shrimp farming ecosystem, with services like Rencana Panen and Assistance & Consultation for a more profitable business.

Farming recommendation and consultation to optimize your harvests.

Pond data record that’s extensive, systematic, and easy to access.

Shrimp disease prevention service using eco-friendly disinfectant.

eFarm eFishery’s shrimp farming platform, providing complete and easy-to-understand information and recommendation on Shrimp farming.

Farmers can check: Pond’s Water Quality Recommendations on Water Quality to Reduce the Probability of Disease/Deaths Other Informations Regarding the Pond or Cycle

Fish Farming Ecosystem In the hopes of building an integrated fish farming ecosystem, eFishery provides various fish production facilities, from feed to fund.

Total number of Farmers connected

Total value of funding approved

Total amount of fish feed distributed to

2021

2021

2021

>7.000

>400 B

>26.000 Tonnes

directly with financial institutions

(in Rupiah)

Farmers

eFisheryKu All-in-one app for Fish Farmers, complete with features to support fish farming businesses.

Information Center on Fish Farming & Aquaculture Providing Various Kinds of Feed with Competitive Pricing Creating Access for Fish Farmers to Financial Institutions Kabayan (Kasih, Bayar Nanti), Paylater Feature to Support Fish Farming Businesses

175+ eFisheryPoints A collaborative hub where farmers meet technology powered by eFishery.

eFresh Information platform on fish price and availability, based on location. eFresh partners can access stock information as well as order needed products, delivered to their doorstep.

eFresh

Through eFresh, eFishery disrupted the farmed fish market and implemented a fairer trade system, both for Farmers and fish customers.

Total of fish trade transaction numbers (in Rupiah)

Total of shrimp trade transaction numbers (in Rupiah)

2021

2021

350 Billion

71 Billion

Is Indonesia Ready to Support the Acceleration of Productivity in the Aquaculture Industry?

Internet Penetration Data in Indonesia Does Not Use Smartphone

Uses Smartphone

66,36%

33,64%

Based on Island

Frequency of Use Per Day

Java

Bali & Nusa Tenggara

Sumatera

Sulawesi

86,60% 84,14% Borneo

52,12%

45,24% 43,82%

Maluku & Papua

27,68%

Based on Area Urban

83,04%

>10 hours

5,76%

50,39%

19,07%

3-5 hours

26,69%

Based on Education

1-3 hours

<1 hours

34,51% 13,97%

Based on Age

Not Educated

Elementary

9-19 Years Old 20-21 Years Old

Middle School

High School

30-49 Years Old50-65 Years Old

Graduate/S1

Postgraduate S2/S3

21,08%

59,89% Rural

5-10 hours

93,02%

Source: Ministry of Communication and Information Technology, Republic of Indonesia

40,87% 79,56% 100%

65,34% 68,34%

75,95% 50,79%

Gadget Used

Social Media

Smartphone

67,27%

Handphone

40%

60%

91,15% 23,01%

Social Media (WA, FB Community Groups)

0,29% 0%

19,44% 15,28% 4,17% 0%

50%

100%

23,61%

Rarely

25%

75%

37,50%

Always

2,36%

Middlemen

50%

Often

Sometimes

3,24%

0,59%

25%

Never

22,12%

Family/Fishery Counselor/Feed Sales

0%

80%

Frequency of Info Search on the Development of Aquaculture

Fellow Farmers (offline)

YouTube

4,72%

Twitter

Source of Information on Aquaculture

Printed Media

5,31%

TikTok

20%

Internet Search (Google)

23,30%

Instagram

1,33% 0%

35,69%

No Social Media

8,85%

Tablet

43,07%

YouTube

11,95%

PC

62,24%

Facebook

27,21%

No Gadget

89,09%

WhatsApp

75%

100%

10%

20%

30%

40%

Is Digital Technology Important for Farmers?

Based on the survey conducted by eFishery to 357 Farmers in Java and Sumatera, Farmers have already considered technology as something positive and important in the farming process.

This is an indicator that Indonesian Farmers are likely to embrace technological innovations.

Source: eFishery’s Research Team

48,46%

Very Important

47,90% Important

0,28%

Very Unimportant

How Tech-Savvy are Fish & Shrimp Farmers in Indonesia?

To measure the Tech-Savviness of Fish & Shrimp Farmers in Indonesia, we need to establish a measurement parameter for digital interactions.

What Makes Digital Interactions Simple or Complex for Users?

Simple

Complex

Less Than 3 Steps

More Than 4 Steps

WhatsApp and SMS to Send Messages 1.

Search Contact → Choose Contact 2.

Write Message → Send Message

Buying a Product in an E-Commerce Site: 1.

Search Product 2.

Choose and Evaluate Product → Add to Shopping Bag 3.

Add Delivery Address 4.

Choose Payment Option in the Application 5.

Redirect to Banking/Fintech Application 6.

Track Order

Watch Video on YouTube 1.

Search Video → Choose Video 2.

Watch Video

Based on Complexity Level eFishery classifies Tech-Savviness of Farmers into 3 levels

Level

0

Does not experience the benefits of the internet at all TechSavviness Level Requirements

Example of Behavior

Level

1

2

Is able to complete simple tasks (<3 tasks)

Is able to complete complex tasks (>4 tasks)

Understands the benefits of internet

Have bought items/necessities through an application with no assistance

Is able to consume and search for information through the internet

Conducts all activities without any connection to the internet/offline.

Level

Watches YouTube, downloads and uses apps such as WhatsApp with no assistance.

Up-to-date, enthusiastic, and is actively looking for newest innovations Is able to shop online with no help or directions, is able to make use of internet banking as a mean of transaction.

How Many Farmers Are Currently on Level 0, 1, and 2 in eFishery’s Ecosystem?

23,9% Level 2

56,7% Level 1

19,4% Level 0

Key Factors that Affect the Penetration of Technology for Farmers

#1 #2 #3

Farmer’s Commodity and Cycle Duration Farmers with short-cycle commodities, such as tilapia and catfish, tend to adapt to technology faster.

Dependency to Middlemen Farmers with dependency to middlemen tend to be more willing to use the paylater service from eFishery.

Market Availability for Harvest Sales Farmers with limited access to the fish market tend to be more willing to use the paylater service from eFishery.

eFishery and Indonesia’s Rural Economy The Aquaculture industry is one of the most

8x

potential sectors to develop, as seen from eFishery’s revenue that grew

8 times in the

span of one year.

Through the revenue of Farmers, suppliers, agents, partners, and distributors, eFishery has contributed

29.75

Million USD

for Indonesia’s rural economy.

However, we still see some challenges in our effort to continuously develop the Aquaculture industry in Indonesia.

2020

2021

Challenges in the Development of Indonesia’s Aquaculture Sector Here are a few factors that can be explored to achieve optimal growth acceleration of the Aquaculture sector.

Sumber: Badan Perencanaan Pembangunan Nasional

Conclusion

Indonesia is the second biggest Aquaculture country in the world, next to China, with a total of US$ 12 Billion of Aquaculture produce. With 2,5 million Farmers, Indonesia’s Aquaculture Sector is

estimated to contribute US$ 1,2 Trillion to the economy of Indonesia.

In the year 2050, it is estimated that 10 billion people will be in need of food, and the demand for animal protein will inflate. Aquaculture is the most efficient animal protein, as well as

emitting the least amount of carbon footprint compared to other sources of animal protein, such as beef (cattle farming). Therefore, promoting Aquaculture as the main source of animal protein becomes more relevant.

Seeing the progress of Aquaculture, a growth acceleration is needed so that Aquaculture can truly be a sustainable solution to world food security. The use of Aquaculture technology, such as

innovations from eFishery, creates a more efficient, sustainable, and beneficial distribution chain for stakeholders involved, whether it be Farmers, feed distributors, or end consumers.

Though we still need to face many challenges, the Aquaculture sector’s growth acceleration can be achieved through collaboration between multiple parties. If we collaborate, Indonesia can be the

number one Aquaculture country in the world, with a digital ecosystem that can support Farmers and all other stakeholders in the Aquaculture sector.

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