Shifting to hygienic and eco-friendly production in the tofu and tempe industry in Indonesia

Transcription

1 IMPACT SHEET SWITCH-ASIA PROJECT Scaling Sustainable Consumption and Production in the Soybean Processing Industry in Indonesia Shifting to hygienic and eco-friendly production in the tofu and tempe industry in Indonesia By switching to sustainable technologies 800 small food processing factories in Indonesia save approximately tonnes of carbon emissions per year

2 IMPACT SHEET SWITCH-Asia project Scaling SCP in the Soybean Processing Industry in Indonesia the challenge activities / strategy Indonesia's soy-based food-processing industry generates around 57 million per year and serves as a source of income for businesses. The industry supports workers, of whom 40-50% are women. Indonesia s tofu and tempe industry, with its vast number of micro, small, and medium-sized enterprises (MSMEs), still uses environmentally damaging production practices. The problems in the processed soy-based food industry are inefficiency, inadequate waste disposal, lack of hygiene, insufficient access to credit, and a low awareness about new technologies. Without business development services, support, or regulations, these enterprises suffer from avoidable inefficiencies that not only reduce profitability and productivity but also lead to environmental damage. objective The project aims at reducing energy consumption and increasing sustainable growth in the urban food processing industries in Indonesia by promoting sustainable production and consumption of tofu and tempe. Specific objectives are: To increase linkages between urban food-processing MSMEs, government programmes and financial institutions supporting environmentally friendly technology uptake; To improve the capacity of Indonesian business intermediaries to promote sustainable production practices; To increase awareness of the importance of sustainable production and healthy consumption among consumers to result in increased demand for clean and sustainably produced tofu and tempe products. The project Scaling SCP in the Soybean Processing Industry seeks to address the inefficient usage of energy in the soy-based food industry. The project promotes sustainable technologies by taking a demand-driven, market-based approach to promoting a switch to sustainable production. The first step is demonstrating to producers that using energy-efficient technologies is in their best interest. The entrepreneurs of micro and small soybean processing enterprises are primarily concerned with their profit margins. The project engages associations and cooperatives to mobilise SMEs to participate in cost-benefit analyses, model factories, cross-visits and demonstrations, and incentive-based competitions for technology upgrades. Secondly, the project facilitates a switch to more sustainable technologies. It builds linkages with government programmes and financial institutions offering incentivised loans, financial literacy training, and capacity building for local business intermediaries in assessing, promoting, and supporting sustainable production and consumption. Thirdly, the project conducts information campaigns to increase demand for sustainable consumption. This comprises mobilising consumer groups, a media study of consumers, building awareness through media campaigns, and developing certification schemes for incentivising sustainability. Lastly, the project scales-up its results by mapping and using social networks for technology transfer, leveraging professional associations and cooperatives, building capacity in government outreach programmes and local business intermediaries, and using media and communications technology. TARGET GROUPS Target groups are: NGOs providing business development services government ministries eager to promote environmentally sustainable production financial institutions private-sector equipment suppliers looking for new markets consumers Final beneficiaries are: 600 tofu and 200 tempe micro, small, and medium-sized factories in Jakarta and other urban areas of Java

3 scaling-up strategy Engagement with cooperatives and associations By engaging with cooperatives and associations the project ensures outreach across the sector. It builds capacity in business intermediaries expanding the range of services, technology, and equipment available for SMEs. To interest SME owners who often do not see the need for services, and consider them too costly, the project combines services in attractive and affordable training packages. Less sought-after services on book keeping are organised together with trainings that can lead to additional business. Enabling access to finance Liquidity among small producers is low and access to credit is one constraint preventing them from upgrading their factories. The project, therefore, links tofu and tempe SMEs to financial institutions. Depending on the size of the companies, such links to financial institutions can include micro-leasing for equipment, green financing schemes or commercial loans for bigger companies. Depending on the financing need, the project supports SMEs with financial literacy, builds strong financing proposals or chooses the right efficient equipment. Promoting innovation The project promotes innovation in equipment and product ranges. It liaises with a chef association to promote new processing and cooking techniques that help SMEs to widen their product ranges and reach new customers. With market research, it supports a future voluntary certification scheme. Seventy per cent of high-income consumers confirmed in a survey that they were willing to pay higher prices for more hygienic products. This finding offers opportunities for SMEs willing to join the future certification scheme. The project also works with equipment suppliers to improve the energysaving capacity of their equipment and to increase the nutritional value of soybean products. The concept of sustainable production and consumption is very relevant to the tofu tempe industry. The tofu-tempe sector has existed for a long time but nothing changed to moved it from using traditional practices into more sustainable production techniques. If the project succeeds, it will contribute to the sustainable transformation of the sector in terms of the supply of good quality food to a large number of people, and in terms of improving the working conditions for workers and the environment. The success of the project will depend on staff understanding the sector and the market development approach, and the strength of stakeholder relationships and the project team. Mr. Irfansyah Project manager, Merci Corps

4 results One-stop service established The project contributed to the setting up of a demonstration factory the Indonesia Tempe House (Rumah Tempe Indonesia, RTI). The factory functions as a one-stop service. It is equipped with technology which meets the national food standard regulation for hygiene and consumer safety. RTI is demonstrating the use of a biogas and liquid waste filtering system in order to avoid environmental pollution and is supporting producers and stakeholders in their purchasing decisions for new equipment. The model factory functions as a learning and demonstration centre. At the factory SMEs and stakeholders can inform themselves on innovative soybean processes and get acquainted with new clean technologies. Already in the first year of the project 104 producers upgraded equipment, most of them reducing the use of firewood. Sustainable production case stories Promoting sustainable technologies works best by building strong business cases among the community of tempe and tofu entrepreneurs. Peer communication stating the benefits of technological and methodological upgrade is most convincing. To support technology upgrades the project has developed some training material, including financial literacy for SMEs, cost benefit analysis, a manual of hygienic and a manual on eco-friendly tempe production. Surveys conducted In order to facilitate the setting-up of a voluntary certification scheme for hygienic and ecofriendly tofu and tempe, the project conducted surveys among producers and consumers. The survey showed that a significant percentage of consumers are willing to pay a high price for hygienic products. This result delivers important incentives to producers to certify their products in the future. The project currently links to food auditors and works on the parameters for a future certification scheme. Once the scheme is finalised the project will subsidise the front runner companies wanting to certify their products. As certification will be valid for three years, the project will have sufficient time to monitor the impact of the certification on the purchasing behavior of consumers and to build case stories for further scaling-up. Promoting market links An independent certification scheme will enable consumers to identify sustainable products. However, the consumer survey showed that availability of hygienic and eco-friendly soybean products is still a challenge. The project therefore works on marketing concepts for hygienic and eco-friendly soybean products to be able to better reach local markets. The model factory of RTI (Rumah Tempe Indonesia) works with a middle man who facilitates business by receiving and transferring orders and prices via SMS (short messages).

5 IMPACT SHEET SWITCH-Asia project Scaling SCP in the Soybean Processing Industry in Indonesia impact in numbers economic impact New products developed for tofu and tempe producers in urban Java environmental impact 800 small food processing factories in Indonesia switch to sustainable technologies resulting in approximately tonnes of carbon emission savings per year social impact Up to workers in the tofu and tempe industry in urban Java will benefit from improved working conditions Engagement of target group The project will conduct around 50 workshops to promote sustainable technology, business development services, leadership strategy, and government outreach programmes Around 42 training sessions on cost-benefit analysis and financial literacy will be conducted Four research studies on certification, social networking, and market assessment for some sustainable equipment will be conducted Policy Linkages Government and potential buyers from formal market such as restaurant, hotel, supermarket will pay attention to the voluntary certification of tofu and tempe Green financing for SMEs who want to purchase and invest in green technology

6 Legend Eligible countries where SWITCH-Asia projects are implemented Eligible Asian countries for the SWITCH-Asia programme Non-eligible Asian countries for the SWITCH-Asia Programme Project implementation area City Region Country Sumedang Indonesia Jakarta Bandung Gunung Kidul Kulon Progo The boundaries shown on this map do not imply on the part of the European Union any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries. objectives The project aims at reducing energy consumption and increasing sustainable growth in urban food processing industries in Indonesia by promoting sustainable production and consumption of tofu and tempe. duration 02/ / project contact Mr. Irfansyah Mercy Corps Indonesia Graha STK, Jl. Taman Margasatwa No. 3, Jakarta Selatan 12550, Indonesia Telephone : partners project total budget: (EU contribution: 80%) Mercy Corps, Scotland associates Perkumpulan Untuk Peningkatan Usaha Kecil (PUPUK) The Association for Advancement of Small Business Indonesian Ministry of Environment (MoE) Indonesian Association of Tofu and Tempe Producers (PRIMKOPTI)