Market View Videos:
Indonesia Video Transcript
With a population of around 230 million people, a growing middle and upper-class, increasing political stability, and GDP growth of five to seven percent for the last three years, Indonesia is one of the best markets in the Association of Southeast Asian Nations, or ASEAN, for Victorian food exporters.
Indonesia is a key market for Victorian food exporters, especially for those with the capability to meet halal requirements.
As Indonesia finalises its internal requirements, the ASEAN Free Trade Agreement, FTA, is expected to come into force in this market during 2010. This will further expand opportunities for Victorian exporters.
“The ASEAN FTA involved Australia and New Zealand and all South-East Asian nations, including Indonesia. On signing and ratification will reduce tariffs from their present levels of up to 15% or higher, down to zero by 2020. So, that spells good news for Victorian exporters.
Dairy is a category that Indonesia is looking to increase its capacity, both to develop its own capacity to supply but also, it's looking to import more dairy products, so it can be whole milk powder, skim milk powder, right through to complete, final, dairy products; cheeses, and UHT milks. There's good markets also for beef offal, and horticultural products, too, in the four and five-star dining restaurants.”
The Indonesian retail sector is growing steadily, particularly in the areas of dairy, horticulture, meat and seafood. While wet markets are still very important, retail outlets are growing. Some of the biggest shopping centres in the world are now located in Indonesia.
The foodservice sector is also very strong with many Indonesians spending around half their income eating out.
“Foodservice is largely supplied by some larger importers in Indonesia, based usually in Jakarta, some are based in Bali that will buy off Victorian producers. They supply a lot of the five-star hotels which are located all throughout Indonesia; a very good opportunity for a lot of our premium products.”
There is also a growing need for business services. Indonesia is very keen to increase its capacity for self-sufficiency; particularly in dairy, goat and beef.
“They're looking for capacity development projects, so service providers, there's very good opportunities there to provide knowledge, information technology, that can be used in Indonesia to increase its capacity to supply its own products for food security reasons.”
Indonesia is an exciting market for Victorian producers and suppliers, however a number of challenges exist such as obtaining a ML product registration number, and a problematic cool chain between islands.
“One of the challenges for Victorian exporters is a requirement for an ML number, which is issued by BIPOM, which is an Indonesian food safety authority. Every product for the retail shelf is required to have an ML number. Cost for this can vary, and time can vary between two weeks and two years to get a number for an individual product for the retail shelf.Indonesia's an island nation and so the cool chain is problematic. It's very hard to shift products between islands and keep them cool. The technology is not there, not sophisticated, by and large. There are some importers that work it reasonably well but in general the archipelago nation makes it hard to ship products