Fisheries Investment Proposition · The food & beverage market in Indonesia will increase to $330...

Badan Koordinasi Penanaman Modal

Fisheries Investment Proposition

31st August 2016

Indonesia Investment Coordinating Board

Why Canadian firms are investing in Indonesia

Indonesia’s GDP will increase by over 150% to $2.2 trillion by 2025

The food & beverage market in Indonesia will increase to $330 billion by 2020

Indonesia has the 4th

largest population in the world (261 million as of August 2016)

Indonesia is very cost effective - the average monthly wage is $161

Indonesia is one of the fastest growing economies in the world in the world (>5% p.a. 2012-16)

Access to the $2.5 trillion ASEAN market with a population of 620 million


What Canadian investors say about Indonesia

invested by Canadian firms

in Indonesia

of Canadian investors in Indonesia are

planning to re-invest in Indonesia

(WAVTEQ, June 2016 survey)

of Canadian investors in Indonesia would recommend other

Canadian companies to invest in Indonesia

(WAVTEQ, June 2016 survey)


Why invest in Indonesia’s fisheries sector?

Growth

10%average annual growth

in food demand in Indonesia (2016-2020)

Indonesia’s competitive strengths for agribusiness investment World’s fourth largest population of 260 million The food & beverage sector is growing by 10% per annum Labour costs nearly half of China and lower than India for skilled positions Better availability of scientists & engineers than China or India Effective corporate tax less than half China and India

Fisheries sector

$32 billionpotential size of Indonesia’s

fisheries sector ($7.84 billion in 2014)

Largest fishery producer

#1 in worldIndonesia is the world’s largest

fisheries producer

Track record

$18.7 billionAgribusiness foreign direct investment in Indonesia 2011-15

Largest shrimp producer

#1 in region

Indonesia is the largest shrimp

producer in South East Asia


Fisheries investment opportunities in Indonesia

• As the largest archipelago country in the world, Indonesia has huge potential and abundant wealth in its territorial waters.

• 25% of global fisheries demand rely on this country’s and the region’s production

• The government is targeting $9.5 billion in fisheries exports by 2019

• The key opportunities for Canadian investors are in:

1. Fisheries processing plants

2. Cold storage

3. Technical services to improve productivity of operations

4. Producing for the rapidly growing domestic market

5. Producing for export markets (fish and shrimps)


Fisheries production in Indonesia

• The government target is 7.2% annual growth of the fisheries sector

• Indonesia is the world’s Top 7 global exporter of canned and processed tuna. Indonesia produces mainly skipjack and yellowfin tuna.

Source: OECO, Food and Agriculture Organization of the United Nations (FAO) Agricultural Outlook, 2016

Forecast fish products production in Indonesia, thousand tons (2016-2025)

22.122.3

22.7

23.2

23.724.1 24.2

24.324.6

24.9

20.5

21.0

21.5

22.0

22.5

23.0

23.5

24.0

24.5

25.0

25.5

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025


Growth of fish consumption in Indonesia

• Fish consumption is growing every year in Indonesia

• With a population over 260 million this creates a large & growing market

Fish consumption, Indonesia, kilos per capita (2007-2016)

Source: Economist Intelligence Unit Market Indicators and Forecasts

24.1 25.2 25.627.2

28.9 28.5 28.2 28.8 29.4 30.0

0

5

10

15

20

25

30

35

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016


Shrimp investment opportunities in Indonesia

Source: RPJMN 2015-2019

Shrimp aquaculture in Asia: 2008-2015, major producing countries (million metric tons)

Source: KKP (2014)

• Global annual demand for Indonesian shrimps is 560,000-570,000 tons (estimate)

• In 2013, 65% of total fisheries exported to the US was shrimp ($900 million)

• Most Indonesian shrimp are exported in frozen form or with heads and shells removed


Indonesia’s fisheries exports

Source: Organization for Economic Co-operation and Development (OECD), Food and Agriculture Organization of the United Nations (FAO) Agricultural Outlook 1970-2025, by commodity

Total exports of fish products, Indonesia, million tons, 2016-2022

1. Indonesia’s exports of fish products are forecast to increase significantly from 1.26 million tons in 2016 to 1.54 million tons in 2022

1.261.32

1.40 1.40 1.411.49

1.54

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2016 2017 2018 2019 2020 2021 2022


Track record in attracting FDI

FDI flows into Indonesia in the agribusiness sector (2010-15), US$ million

Source: Based on BKPM data

1. Indonesia had attracted $18.7 billion of FDI in the agribusiness sector since 2011 with over $9 billion of FDI in the last 2 year.

2358

34343744

5412

3721

0

1000

2000

3000

4000

5000

6000

2011 2012 2013 2014 2015


FDI Track Record – case studies

PT. Aquafarm Nusantara Originating from Switzerland, PT. Aquafarm Nusantara is a foreign investor which initially established in 1988 in Central Java. Ten years into its investment, the company built a hatchery of 30 hectares in North Sumatra. Aquafarm has employed more than 4000 staff. The end product is a frozen tilapia fillet. The product is packed with a retail brand ‘Regal Spring Tilapia’. Only 10% of its tilapia products are consumed domestically. 83% is exported through the port of Belawan, with 55% of exports to Canada and the US.

PT Contained Energy Indonesia PT Contained Energy Indonesia has developed and successfully deployed stand- alone, off-grid, 100% solar-powered cold storage facilities, designed for use in remote communities. The project took place between 2013 and 2014.


Competitive strengths for fisheries – Size of market

0

500

1000

1500

2000

2500

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Indonesia

Philippines

Thailand

Malaysia

Vietnam

Singapore

Indonesia’s GDP 2025 forecast:• Increase >150% to $2.2 trillion• Larger than India’s in 2015• Nearly same size as Canada’s ($2.6 tn)• GDP/capita: $3370 (2015) to $7840

GDP 2011-2025, US$ billion (EIU forecasts)


Competitive strengths for fisheries – Size of population

6

31

69

92

101

255

7

36

70

103

128

308

0 50 100 150 200 250 300 350

Singapore

Malaysia

Thailand

Vietnam

Philippines

Indonesia

Population projection (mid-2030, Millions) Population (2015, Millions)

Source: fDi Benchmark (IMF and Population Reference Bureau World Population Data Sheet)

Population by country, 2015-2030

Indonesia’s population is the 4th largest in the world and will increase to over

300 million people


Competitive strengths for fisheries - Skilled workforce

Source: fDi Benchmark (Global Competitiveness Report, World Economic Forum, Switzerland, 2015-16 )

Availability of Scientists and Engineers – out of 7 (2015)

3.9

4.0

4.2

4.3

4.5

4.6

3.4 3.6 3.8 4 4.2 4.4 4.6

Vietnam

Philippines

India

Thailand

China

Indonesia


Competitive strengths for fisheries – Available workforce

Unemployment rate, 2015-2020

3.6%

6.0%

4.1%

3.2%

2.4%

2.0%

0.8%

5.9%

8.4%

6.0%

4.0%

2.9%

2.9%

1.9%

0.8%

6.3%

0% 1% 2% 3% 4% 5% 6% 7% 8% 9%

India

Philippines

China

Malaysia

Vietnam

Singapore

Thailand

Indonesia

Forecast Unemployment Rate in 2020 (%) Unemployment Rate in 2015 (%)

Source: fDi Benchmark (Economist Intelligence Unit March 2016 & International Monetary Fund 2016)

Indonesia has the least tight labour market in ASEAN


Competitive strengths for fisheries – Low taxes

Total Tax Rate (% profit) in 2015

61%

68%

43%

40%

39%

28%

30%

0% 10% 20% 30% 40% 50% 60% 70% 80%

India

China

Philippines

Malaysia

Vietnam

Thailand

Indonesia

Source: fDi Benchmark (World Bank Doing Business 2016)

Indonesia has low effective tax rates


Competitive strengths for fisheries – Lowest wages in ASEAN

Average monthly wages, USD, 2011-2020

Source: EIU

0.00

100.00

200.00

300.00

400.00

500.00

600.00

700.00

800.00

2011 2012 2013 2014 2015 2016 2017 2018 2019

Indonesia

Malaysia

Philippines

Thailand

Vietnam


Competitive strengths for fisheries – Low labour costs for engineering positions

Labour costs by country for an engineer, USD, 2015

Source: fDi Benchmark

57537

24030

15893

15840

15552

13801

12000

11029

0 10000 20000 30000 40000 50000 60000 70000

Singapore

China

India

Malaysia

Thailand

Indonesia

Philippines

Vietnam

Indonesia has highly competitive labour

costs


Competitive strengths for fisheries– Innovation

Total of Patent applications, non-residents (foreign investors) (2014)

3255

3960

6267

6924

9009

7321

0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000

Philippines

Vietnam

Malaysia

Thailand

Singapore

Indonesia

Source: fDi Benchmark (World Bank World Development Indicators)


Competitive strengths for fisheries – Low cost of living

Cost of Living Index, 2015*

Source: fDi Benchmark *Rating 0-10 (0=lowest cost of living; 10=highest cost of living) (2014)

5.7

3.28

2.22

2.14

1.86

1.82

1.4

1.79

0 1 2 3 4 5 6

Singapore

China

Malaysia

Thailand

Philippines

Vietnam

India

Indonesia

The Investment Coordinating Board of the Republic of Indonesia

21

Badan Koordinasi Penanaman Modal (BKPM)


Jln. Jend. Gatot Subroto No. 44Jakarta 12190 - Indonesia

t . +62 21 525 2008

f . +62 21 525 4945

e . [email protected]

Contact Centre :0807 – 100 – 2576 (BKPM)

www.bkpm.go.id

Thank You

Terima Kasih

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Fisheries Investment Proposition · The food & beverage market in Indonesia will increase to $330...

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