Indonesia Information Paper

The 22nd ASEAN Cocoa Club (ACC) Meeting

16 - 17 July 2019
Putrajaya, Malaysia

AGENDA 11.1.3: INDONESIAN COCOA BOARD (ICB)

REPORT INDONESIAN COCOA BOARD OF PROGRAMS AND ACTIVITIES

2018/2019

I. INTRODUCTION

The Indonesian Cocoa Board (ICB) was formed based on the mandate of article 19 (2) of the
Plantation Law No. 8/2004, which was amended by article 52 of the Plantation Law no.
39/2014. ICB was declared on June 29, 2007, by the Indonesian Cocoa Association
(ASKINDO), Indonesian Cocoa Industry Entrepreneurs Association and Indonesian Chocolate
(APIKCI), Indonesian Cocoa Industry Association (AIKI), Indonesian Cocoa Farmers
Association (APKAI), and Coffee and Cocoa Research Center Indonesia (ICCRI)

II. THE INDONESIAN COCOA BOARD ACTIVITIES IN 2018

A. Attending meetings and discussions with related agencies / parties.

1. Discussion and Preparation of Revised Minister of Agriculture Regulation number

27/2016 to Minister of Agriculture Regulation 67/2014 concerning Requirements
for Quality and Marketing of Cocoa Beans

Ministry’s Agriculture Law 67 of 2014 should be applied in May 2016. This regulation
aims to improve the competitiveness and added value of cocoa beans, support industrial
development, provide high quality cocoa beans, are safe for consumption, increase
farmers' income and ensure traceability of cocoa bean production. But in its development
it cannot be implemented because there are still problems and still lack of supporting
facilities.

In principle, the revision of Ministry’s Agriculture Law 67 of 2014 is to simplify its

implementation from the aspect of organizational equipment, the requirements for
establishing an organization / unit and Human Resource readiness so that it can be
implemented in the field.

Until now the discussion is still being conducted and it is expected that in May 2019 this
regulation can be enacted.

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2. Meeting of Cocoa and Chocolate Businessmen with Ambassador of the Republic of
Indonesia to Tanzania.

• The purpose of the meeting is for discussion in order to improve the economic and
cooperative relations of Tanzania and Indonesia, especially in the fields of Cocoa and
Chocolate.

• The largest Indonesian exports to Tanzania are oil palm, machinery, paper, insecticides,
clothing and no cocoa or cocoa products.

• There are Italian investors who invite Indonesian investors to join in the form of a consortium
to invest half-finished cocoa production from upstream to downstream. The cocoa
plantation is in Congo and for the processing industry in Tanzania.

• It was stated that in Congo there is an area of 15,000 ha.

• Estimated total cost required for this investment ± US $ 200 million consisting of US $ 140
million for cocoa plantations and US $ 60 million for the cocoa industry

• Besides offering investment cooperation, the Indonesian Ambassador to Tanzania also invited
the cocoa and chocolate industries to export cocoa and chocolate processed products to
East Africa. Because it currently there is no Indonesian chocolate exported to Tanzania and
in Tanzania there are many chocolate products from Europe.

• For investment cooperation offers between Indonesia and Tanzania, it seems that cocoa and
chocolate businesses are less interested, especially for their on-farm, they are more
interested in exporting Indonesian chocolate products to Tanzania. The meeting was also
filled with talk about the development of Indonesian cocoa, the technology it possessed and
also the obstacles faced by Indonesian cocoa.

3. Meeting in the Context of Investor and Trade Enhancement in the Agriculture Sector
from Middle East Countries and Organization of the Islamic Conference (OIC) to
Indonesia

The purpose of the Meeting was to gather material / problems and proposals for the
preparation of the President's recommendations in increasing investment in agribusiness,
especially from Middle Eastern countries and OIC members to Indonesia.

• Actually 95% of food in the Middle East is imported, but imports are not from Indonesia.

• The Saudi Arabian party is interested in investing in Indonesia and we must strive to attract
investment in Indonesia.

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 • To increase investment in the field of Agribusiness, especially in the Middle East and the
OIC, several things need to be considered, namely:

a. The need for increased legal certainty.

b. The need for increased financial support, especially for working capital.

c. The need for professional consultant support in preparing investment offers to potential
investors.

d. Ease to get cooperation for agricultural land.

e. The need for an increase in the downstream industry.

Proposals in the cocoa sector in the Framework for the Preparation of President's
Recommendations to Increase Investment and Trade in the Agriculture Sector Especially from
and with Middle Eastern Countries and OIC Members:

• Proposed Investment Increase

Build/develop cocoa farms in the cocoa center area by involving local farmers, in accordance
with applicable regulations and regulations. This includes the nucleus-plasma pattern. Investors
act as core companies by build plantation and processing units with areas that are not too large
but with high technology loads.

• Proposed Trade Improvement

Exports for intermediate processed products and end products to several Middle Eastern
countries currently exist but are still small. For this reason, it is necessary to increase exports of
intermediate processed cocoa products such as butter, powder, liquor and final products such
as chocolate (food and beverages), chocolate blocks (cake / cake making materials), etc.

4. ED - ICCO Work Visits to Indonesia

The Executive Director (ED - ICCO) work visit Dr. Jean-Marc Anga to Indonesia was
conducted on 21-27 January 2018. The work visit was intended to accommodate various
inputs related to the efforts that ICCO can take to improve the Indonesian cocoa sector and
vacancies to work in the Directorate Economics at the ICCO Secretariat specifically aimed at
representatives from Indonesia.

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 The ED ICCO work visit to Indonesia is filled with the following events:

a. Cocoa Workshop with Ministries / agencies and private parties. The Cocoa Workshop was
held on January 22, 2018 at the Office of the Directorate General of Estate Crops, with the
presentation of information from:

• ED - ICCO with the topic "Global Market for Cocoa Products - Recent Trends and Future
Outlook"

• Directorate General of Estate Crops with the topic "National Policies on Sustainability
Cocoa Development in Indonesia"

• General Chair of the Indonesian Cocoa Board with the topic "Recent Profile of Indonesian
Cocoa"

b. Courtesy Call is held at the Office of the Coordinating Ministry for Economic Affairs on
January 23, 2018

5. Preparation of the ASEAN Draft Standard of Food Safety for Cocoa and Cocoa Products

In the ASEAN Cocoa Club (ACC) Meeting it was agreed that the same standards needed for
ASEAN countries in terms of food security for cocoa and cocoa-based products. For this
reason, Indonesia was asked to make a draft which would later be discussed in the scope of
ASEAN countries. The drafting team of the standard has been formed by the Directorate of
Processing and Marketing of the Directorate General of Estate Crops, which consists of the
Directorate of PPHP, Annual Crop Directorate and Freshener, Ministry of Industry, Ministry
of Trade, Ministry of Foreign Affairs, Food and Drug Supervision Agency, ICCRI, and ICB.
The final draft has been completed and will be sent to the ACC secretariat.

6. Collaboration between Germany and the Indonesian Cocoa Council in the Field of
Research

In 2018 the Indonesian Coffee and Cocoa Research Center held a collaboration in the field of
research with the German government, which in essence was a study of the use of all parts of
cocoa fruit to be processed into products of high economic value. In the collaboration, ICCRI
has invited the Indonesian Cocoa Board to participate in the research collaboration, which is to
test the use of virgin cocoa butter in chocolate products, compared to the commonly used
cocoa butter today.

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B. Organizing Workshops / Seminars

1. Commemoration of Indonesian Cocoa Day 2018

The Indonesian Cocoa Day commemoration in 2018 on October 25, 2018 was held at the
Taman Anggrek Mall in Jakarta, with the theme "Together we improve Indonesian Cocoa and
Chocolate Production".

The Indonesian Cocoa Day commemoration in 2018 was filled with high-producing cocoa
garden competitions, Cocoa Focus Group Discussion on the topic "Private Role in Supporting
Indonesian Cocoa Production Improvement"; exhibitions, competitions and demos to make
foods / drinks made from chocolate, and drink chocolate together.

The winners of the high-producing cocoa garden competition given to farmers and service in
charge of plantations as technical advisers. There are also winners of the cocoa plantation
competition:

• Champion I, Busron Bhar, Saiyo Salayo farmer group, Jorong Galanggang Tengah, Nagari
Salayo, Solok Regency, West Sumatra Province.

• Second Place, H. Santar, Bukit Subur Farmer Group, Tapango Village, Tapango District,
Polewali Mandar Regency, West Sulawesi Province.

• Third place winner, Burhanuddin, Horodopi Village, Benoa District, South Konawe
Regency, Southeast Sulawesi Province.

2. Focus Group Discussion (FGD) in the framework of 2018 Plantation Day

Focus Group Discussion (FGD) with the theme "Alternative Sources of Sustainable
Development of Indonesian Cocoa Funding" which was held to commemorate the 61st
Plantation Day, held at Sate Building, Bandung on December 8, 2018, opened by the General
Chair of the Indonesian Cocoa Board, and attended representatives from the Coordinating
Ministry for Economic Affairs, Ministry of Trade, Ministry of Industry, Ministry of
Agriculture, Research Institute, Agency in charge of Provincial Plantations and Cocoa
Producing Centers, Cocoa Field Associations, Cocoa Field Forum, Cocoa and Chocolate
Processing Industry, Universities, Councils Indonesian cocoa and Indonesian cocoa and
chocolate observer.

His purpose of this FGD is to obtain alternative input / formulation of appropriate funding
sources that can be implemented for sustainable cocoa development in order to accelerate the
increase in national cocoa production and quality in order to ensure the availability of raw

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 materials for domestic cocoa processing industries, and not against laws and applicable
regulations.

3. Indonesian Cocoa Council National Conference (National Conference of Cocoa Board) in

2018

The Indonesian Cocoa Council National Congress 2018 or the 3rd National Conference is held
on December 9, 2018 in Bandung.

The aim of the National Conference is to elect and determine the Indonesian Cocoa Board
Implementation Agency for the period 2018-2021 and the Steering Committee for the period
2018-202, in accordance with the Articles of Association and Budget Decree of Chapter IV
Article 9.

Based on Cocoa Board Permanent Member Assembly Meeting, the General Chairperson of the
Indonesian Cocoa Board was elected and determined for the 2018-2021 period, Mr. Dwi
Atmoko Setiono (from Industry).

III. Plan of Activities for 2019

• Hearings to the President of the Republic of Indonesia.

• Audience to related institutions, namely: Coordinating Minister for Economic Affairs,

Minister of Agriculture, Minister of Industry, and Minister of Trade.

• Audience to the leaders / Directors of several companies / Cocoa and Chocolate Processing
Industry. (Such as PT. Nestle, PT. Olam Indonesia, PT Mayora, PT. Gandum Mas
Kencana, PT. Garuda Food, PT. Kalla Kakao Industri, PT. Indolakto, PT. Meiji Food
Indonesia etc.)

• Indonesian Cocoa Day commemoration in 2019 in West Sumatra in September 2019

(Proposed plans for activities from Cocoa Board are required)

• Harmonization of national cocoa production data between the government and the Cocoa
Association.

• Together with ASKINDO held the IICC in Bali

• Cocoa Workshop / FGD in the framework of Plantation Day in December 2019

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 • Following up on cocoa FGDs in Bandung specifically related to "Alternative Sources of
Sustainable Cocoa Financing in Indonesia" (in the form of the Internal Coordination
Meeting with Industry).

• Together with the Directorate General of Estate Crops and related agencies to discuss the
requirements for cocoa quality standards (revised Ministry’s Agriculture 67/2014
concerning requirements for quality standards and marketing of cocoa beans)

Jakarta, April 2019

Indonesian Cocoa Board

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 THE STATUS OF THE COCOA INDUSTRY IN INDONESIA

2018

_________________________________________________________________________

1. Export and Import of Cocoa by year 2018 (source of BPS)

Export :

• Cocoa beans: : 27.826 tons

• Processed Cocoa : 352.920 tons

Import

• Cocoa beans : 239.377 tons

• Processed Cocoa : 49.624 tons

Export of cocoa beans from year to year shows a decline, and processed cocoa products
showed increase. This is in line with the growing domestic cocoa processing industry. The
largest processed cocoa export is cocoa butter.
Imports of cocoa beans in year 2018 increased sharply, this is to meet the needs of raw
materials in the domestic cocoa industry due to decreased domestic cocoa production and
not enough to meet the domestic industry.

2. The domestic cocoa processing industry currently has a capacity of 464.000 tons / year
(58%). This capacity is not yet optimal, as the industry has difficulty in obtaining cocoa bean
raw materials.

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