ALTERNATIVE DIGITAL SUPPLY CHAIN PLATFORM

IN AGRICULTURE ECOSYSTEM

SITE VISIT REPORT

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PROJECT OVERVIEW

1.0 Project Overview and Background

Kommodum is an attempt to create a digital platform to address the issues of transparency and

liquidity in the modern day to alleviate the inefficiencies of current practice in the agricultural supply

chain and commodity markets.

We are looking to employ smart contracts via distributed ledger technology, or Blockchain, to ensure

that data is transparent and portable including its associated history of transaction. The idea is to also

provide users with a data rich platform to provide users with the best data in order to make trading

decisions as well as best practice for support services.

Our proposed Alternative Digital Supply Chain (ADSC) Platform - Kommodum consists of the following

main functionality:

Supply chain management

▪ Inventory Management Ability to track and keep abreast of the stocks in storage, provided that the refineries and

mills data is programmed into the system platform.

▪ Goods Tracking Ability to track goods in transit together with the GPS pings as provided by the logistic

provider.

▪ Deal Confirmation Ability to confirm the trade details between 2 parties on a singular platform scripless without

the paperwork. As well as creating the necessary alerts for unconfirmed deals.

▪ Regulatory Reporting Relieves the necessary manual reporting with automated reporting that can be shared to and

view by the respective authorities.

▪ Open ledger The use of open ledger to record and monitor the end to end transaction of the agri-food

supply chain and its financial needs

Our unique proposition

To ensure all information are recorded and well maintained we propose the readiness of

implementation of the below technologies in our MVP platform:

1. Smart Contract Ready sets the rules/agreement that govern a business transaction; it’s

stored on the blockchain and is executed automatically as part of a transaction.

2. Shared Ledger Ready records & shares all transactions across the business network as a

single source of truth. Each participant has a duplicate copy of the ledger(distributed

ledger) but see only those transactions they’re authorized to view

Problem Statement

The offline nature of transactions for smallholder farmers result in them not having income statements,

therefore keeping them in the underbanked household category. Arising from the lack of transparency

along the supply chain, Supply Chain Management at present faces the following challenges:

a) Multiple stages of approvals, invoicing and payments b) Involvement of numerous companies and individuals across various geographical locations c) Exchange of large volumes of information, materials and financial capital

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These challenges lead to cost and time inefficiencies, ultimately resulting in reduced business

productivity as time and money is spent navigating the numerous processes in place.

Scope

This document will address business requirement for KOMMODUM – phase 1 only which should cover

the food security supply chain from Upstream until Midstream or the start of Downstream.

Based on the above chart, we are looking at a traditional supply chain for the industry. Where the

platform will bring a difference is to initially digitalise the midstream segment beginning from the fish

landing at the jetty and end at the destination market , which entails both wholesale as well as retail

clients. The platform will digitalise and hopefully improve the services to the upstream and downstream

activities. The first main aim is to digitalise the wholesale market.

UPSTREAM

We are looking to map the supply chain for upstream, i.e. post landing of the boats and unloading

onto the jetty. This will map the inventory of the catch and landing, as per Lembaga Kemajuan Ikan

Malaysia (LKIM) requirements. In this process, individuals/freelancers are hired to perform the sorting

of the fishes post landing, for the tabulation and reporting to the seller. The freelancers are then paid

daily in cash. There are other suppliers in the upstream supply chain as well, for example the supplier

of ice used for storage in-transit. The goods are then processed in 3 ways i.e.:

a) Sold at the jetty b) Sent to the cold room c) Loaded into Transport for destination market locally.

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MIDSTREAM

The next phase involves the selling, warehousing and transportation of the goods to the relevant

destination and sale. In this process, we are looking to digitalise the following:

a) Trading and purchase order management; b) Inventory tracking; and c) Destination mapping.

DOWNSTREAM

We look to map the downstream only to the extent of a B2B platform business model. The idea is to

only work on the wholesale side of the business for now. However, there will be end buyers that may

participate directly if they can participate in the bulk market. The digitalization will only end here for

the MVP.

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PRODUCT ROADMAP

The roadmap of this MVP can be classified into 3 main phases for the next 12 months after the

project started.

Phase 1 (4 months) Development, Testing & Pilot Release (1.0)

Phase 2 (4 months) Stage 1 - Current supply chain deployment

Phase 3 (4 months) Stage 2 - Supply chain expansion

M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12

Months

Development and Testing

Stage 1

Stage 2

Pro

ject

Kic

k O

ff

Map out a single supply chain line to KL from Upstream to Downstream Industry. a) Provide Upstream Supply Chain from Kelantan to KL

• Tok Bali Fishery (confirmed)

• FAMA Meat supply from Kelantan (potential)

• FAM Vegetable supply (potential)

b) Providing Midstream Supply Chain into KL

• Fishery Industry (Mega Prestasi) -confirmed

• Poultry (FAMA) - potential

• Meat (FAMA) - potential c) Providing the Support chain for the industry

i. Financing

• YAPEIM – (potential)

• Agro Bank – potential

• Maybank – potential ii. Logistics

• Cold Chain – potential

• Mega Prestasi Konsortium -

confirmed

d) Providing for the Downstream Industry in KL

• Distribution Centers

- AKRAB Paya Jeras (confirmed)

- Suruhanjaya Koperasi Malaysia (confirmed)

• HTO – Giant, Tesco, Aeon, Carrefour –

(potential)

• Retailers – Petro Teguh, Al Bait, MyDOF –

(confirmed)

• Online Retailers – AgroBazaar, HappyFresh,

Signature Market (potential)

• Increasing the Supply Chain routes and providers to KL and Regionally

1. Include neighbouring ASEAN nation countries into

the Supply Chain.

2. Increasing the goods beyond the protein-based

supply chain to include other products in the East

Coast of Peninsular of Malaysia.

3. Introducing other supply chains including but not

limited to the North and South Peninsular

Malaysia and East Malaysia, specifically Sabah.

• Providing provenance to the industry o Create Transparency and Traceability of

supply chain and source of goods 1) Integration of Blockchain technology

into the supply chain

2) Introduce a tracking system into the

platform

• Integration of more logistic players in the supply

chain to create a bid for jobs

o Create the ability to bid for jobs along the

supply chain

• Increase Distributors into the Supply Chain

o HTOs

o Retailers

o Distribution Centers

• Improve the technological presence in the supply chain

o Payment Gateways o Billing Module o Reporting and Analytics

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Title Description Date

UAT S1-S4 Web Release 0.1 1 Dec 2019

UAT S1-S4 Mobile Apps Release 0.1 1 Dec 2019

UAT S5-S7 Web Release 0.2 22 Dec 2019

UAT S5-S7 Mobile Apps Release 0.2 22 Dec 2019

UAT S8-S10 Web Release 0.3 12 Jan 2020

UAT S8-S10 Mobile Apps Release 0.3 12 Jan 2020

MVP Release Web and Mobile Apps Release 1.0 21 Jan 2020

USE CASE FOR MVP PLATFORM

PILOT SUPPLY CHAIN - TOK BALI (Current Setup)

TOK BALI - KL (547km 6hrs) TOK BALI – PENANG (350km 5hrs)

Current Supply Chain

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TOK BALI – KL Supply Chain

Products Supplied – Fisheries, Poultry Meat, Vegetables

Logistic Needs – Cold Room Operations, Trucks and Warehousing and Distribution Centre

Movers Product Life Cycle –

Product Destination Chain Time

Fisheries Landing site - KL Distribution centre (Paya Jaras ) / Al Bait 6 hrs

Al Bait & Paya Jaras - KL Consumer via retailers 1 - 2 hrs

Poultry & Vegetables

Tok Bali Cold Room – Paya Jaras / Al Bait 6 hrs

Al Bait/ Paya Jaras to Retailers/ HTOs 1 - 2 hrs

UPSTREAM ACTIVITY

The pilot partner for this project is Mega Prestasi Sdn Bhd. They are a specialist deep sea fisher in

the local and international waters. They are currently one of the main players in Tok Bali.

MEGA PRESTASI SDN BHD

Years in operation 1995, 2004 in tok bali

Monthly catch RM15-20 mio per annum circa 10-20% of Tok Bali supply 875 MT per month.

Types of Fish caught Pukat Jerut = TUNA NERETIK, cencaru, kembong, Sardine, etc Pukat Tunda = Ikan merah, tenggiri, ketam etc

Amount of Exports 5,000-6,000 MT per year

Amount of Imports 200,000 -300,000 kg per year

Amount of Fish Manufactured 360MT / yr (RM 5 x 1,000)

Fleet under management 7 own fleet , managing 30 as a consortium

Types of Fleet C2

MID STREAM ACTIVITY

There are two areas of Mid Stream to be stressed on in this particular supply chain

• Manufacturing

• Logistics

Manufacturing In terms of Manufacturing, the current manufacturing activity is limited to onsite Tok Bali activities which

include, Tuna manufacturing. In the current setup, Tuna is manufactured and made into Tuna burgers

and Satay.

Tuna Burger and Satay. This partnership includes sell down to retail outlets in KL together in collaboration with Ministry of Fisheries, this is the My DOA Kitchen initiative. My Dr. Tuna.

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Logistics The Logistic chain is currently being serviced by a group of independent providers under the patronage

of Mega Prestasi Sdn Bhd. Under Mega Prestasi there are seven Logistic fleet with cold room, however,

with the shared economy, this number goes up to 30 fleets. This can be more efficiently done via an

Alternative Digital Supply Chain. Especially with increased product diversity.

DOWNSTREAM ACTIVITIES

Retailers in Klang Valley Al Bait Halalan Toyibba 30 outlets in Klang Valley

FISHERIES SUPPLY CHAIN FROM TOK BALI VISUALIZATIONS

Deep Sea Supply Upstream Supply Chain

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SITE VISIT TO TOK BALI TENTATIVE

TOUR TO LKIM JETTY (FISH UNLOADING 7 SORTING)

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VISIT TO SHOP FOR DIGITAL PAYMENT

TOUR TO MP GLOBAL SUPPLY BASE JETTY

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MP GLOBAL COLDROOM STORAGE

MEETING AT MP GLOBAL OFFICE

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SITE VISIT DISCUSSION POINTS

Topic : Digital Payment

1) MDEC project team to initiate talks with PayNet, potential bank (ideally AgroBank) & project partner (LS) to conclude/brainstorm on :

a. ways of digital payment / transactions for users of the platform, plus the ideal locality of a cash dispenser

b. LS would like to seek clarity on cost of using the transaction function (by the bank partner) during the meeting

c. Other matters

3rd Week of February 2020

2) PayNet to propose on ideal products with high potential for mass adoption @ Tok Bali (fisheries ecosystem). They have an idea on how things work and made it known that they have an idea on the kind of products (DuitNow etc) that can be introduced there

3rd Week of February 2020

3) MDEC’s Fintech team to provide their feedback / findings based on yesterday’s site visit (i.e potential new use cases for financial inclusion agenda)

Mid Jun-July 2020

4) MDEC will focus on B40 which are the fish sorters as possible new use case for digital financial inclusion agenda. Challenges:

• financial literacy of the B40

• Not all of these fish sorters have bank accounts

• Trust with the digital financial services is low

Others 1) MP Global have ready datasets to be used as POC for the supply demand data analytics (dashboard) - B2B model 2) LS agreed to develop the analytics - MDEC to provide business & functional requirements. 3) LS to get ready for 30 users adaption of the MVP platform by March 2020

1st Week of March 2020

** End of Document **