2011 Agribusiness Update

Fisheries Industry at a glance “Indonesia, with a total

O ver view
cies of fish that have not
been used optimally.
For example, for the produc-
tion of tuna, Indonesia ranks
third in the world’s largest
tuna producing countries.
area of 7.7 million km2, is
the fourth longest coast-
line country, i.e. along for
more than 95.181 km, and
has more than 17.480
islands. “

This is in line with the in-

I ndonesia is the largest
archipelago country in the
world with the potential and
abundant natural resources.
Indonesia, with a total area
of 7.7 million km2, is the
fourth longest coastline
country, i.e. along for more
than 95.181 km, and has
more than 17.480 islands. If
all of the potency can be
managed into tangible eco-
nomic assets, it can be used
to improve the people wel-
fare, source of foreign ex-
change, environmental pres-
ervation, and become a
medium for unifying the
nation.
Indonesia has an important
position in the fishery sec-
tor. Fishery production
growth reached 7 percent
per year, placing Indonesia
as the largest producer of
fishery products in South-
east Asia.
For gross domestic product
(GDP), the fisheries sector
has positive growth for na-
tional economy, for about
5.2%. Fisheries sector gave
19.2% contribution to GDP
for agricultural groups,
which puts this sector at the
second rank under field
crops. These results indicate
that the marine and fisheries
sector occupies an impor-
tant position for Indonesia's
economy.
Generally, national fisheries
production sector can be
divided into two sub-sectors,
namely fishing and aquacul-
ture. At fishing sub-sector,
Indonesia has the potential
of marine fishery resources
of 6.4 million tons of fish per
year. As for inland water,
areas that can be widely
used for fishing effort are
about 13.85 million hectares
with the potential fishery
resources of 3.03 million
tons per year. Nevertheless,
it can be found that some
types of fish that have been
experienced over-exploited,
but there also several spe-
creasing fish production in
Indonesia from year to year,
which is still dominated by
catch fisheries. Total fishery
production in 2010 reached
10.83 million tons, up 10.29
percent compared to 2009
that was 9.82 million tons.
Fishery is one of the main
economic activities that
need to be developed in
order to provide national-
food security. Currently,
fishery products are a source
of animal protein with the
largest consumption level in
Indonesia. Fisheries product
consumption reached 30.4 Inside this issue:
kg/capita/year, which is 72
percent of animal protein
Overview 1
consumption/capita/year,
higher than other animal
protein sources like chicken,
Economic View of 1
meat and eggs.
Fisheries
As an archipelago, Indone-
sia’s geographical condition
Aquaculture 2
strongly supports the devel-
opment of fishery activities.
Indonesia has access to Challenges 3
abundant fishery resources
in both marine fishery and
Policies
freshwater fishery, where 76 4
percent of Indonesia’s sur-
face area is sea-waters, in
Statistics 6
addition to the 5,500 rivers
and lakes found throughout
Indonesia.
Investment Guide 7
 Page 2 Fisheries Industry at a glance

Economic View of Fis her ies

Based on the Indonesia statistics of
marine and fisheries, it is known
that there is an increasing of aver-
age fishing production volume dur-
ing 2005 to 2009 for about 2.09%,
with total fishery production in
2009 reached 5,107,971 tons with a
value of Rp 53,9 trillion. Based on
these data, it is also can be known
that East Java Province is the largest
producer with a total capture fisher-
ies production in 2009 reached
395,510 tons, followed by Maluku
with a total production of 341,966
tons.
The main commodities of marine
fishing production are tuna, skipjack
tuna, and shrimp, while the main
commodity of inland water fishing
includes fresh whole fish and
shrimp. The nationwide tuna production
was increased by 3.31% to 203,269 tons
during 2005-2009. The main producing
areas of tuna fishing is North Sulawesi
province, amounting to 56,658 tons.
Skipjack tuna had a tendency of average
increasing production for 7.11% in 2005-
2009. Maluku and Papua provinces were
areas in which have the largest average
increase, which is 17.78%, followed by
Java (12.86%), and Sumatra (5.03%).
Production of shrimp fishing in marine
waters that have high economic value
are penaeidea and panulirudaea or spiny
lobster. However, marine shrimp fishing
activities are likely to have been regard-
edas over-fishing in certain areas. While
shrimp fishing activities in inland water
has increased about 0.49% in the period
of 2005 to 2009. In 2009, shrimp produc-
tion in inland water were reached
16,715 tons.
Fishing industry is one of the industries
which can drives employment and pov-
erty reduction. Employment from the
fishing industry in 2009 reached
913.788 people and 2,641,967 fisher-
men. In terms of fishing companies and
fishing household was increased in 2005-
2006 and then declined in 2007-2009.
Generally, there was a average decline in
the year 2005-2009 amounting to 0.44%.
The total number of households in 2009
as many as 913,788 units. However,
there was an increasing amount of com-
panies which operating in the sea in
2005-2009, amounting to 1.69%. In 2009
the number of operating households and
fishing companies as many as 603,856
units.

“Fishing industry is Aqua c ulture

one of the industries
which can drives
employment and
poverty reduction.
Employment from the
fishing industry in
2009 reached
913.788 people and
2,641,967 fishermen.”
fish farmer at Sanur Beach
Aquaculture can be found
throughout Indonesia with
varying extents. This sub-
sector has contributed sig-
nificantly to national em-
ployment. In 2010 there
were 1,447,418 households,
firms and companies in-
volved in the aquaculture
industry. This amount is
most widely cultivated on
ponds aquaculture which
reaches 766,357 units. The
most significant enhance-
ment found in the cultiva-
tion of marine species,
which in the period of 2006-
2010 recorded an average
increase of 21.06% with a
number of business units by
2010 as many as 155,480
units. Based on data from
the Ministry of Maritime
Affairs and Fisheries, aqua-
culture industrial area in the
year 2010 was amounted to
1.306.984 hectares, which
represented an average
increase in 2006-2010 pe-
riod by 12,01%. Enbankment
aquaculture still has the
largest area with in amount
of 741,567 ha.
Aquaculture favourable
commodities are include
shrimp, grouper, gold fish,
milkfish, snapper, pangasius,
catfish, carp, crabs and sea-
weed.
Shrimp aquaculture produc-
tion within the last five years
recorded an increase of
5.73%, but decreased be-
tween 2008 and 2009 for
17.46%. The decrease was
caused by the spread of
diseases caused by Infec-
tious Myonecrosis Virus
(IMNV). Some intensive area
that became a national
shrimp production centers
such as South Sumatra, Lam-
pung and East Java.
Grouper fish is a commodity
that has high value both for
local and overseas price.
Maluku is a province which
has the highest production
volume in 2009 of 1.815
tons. This commodity usu-
ally exported alive in some
countries such as Singapore,
Japan, Hongkong, Taiwan,
Malaysia and the United
States.
Goldfish has been widely culti-
vated by the community. The
demand of local market for
this commodity is fluctuated,
but overall the average sales
always increase. Total total
production in 2009 was
249,279 tons, which increased
by 2.87% compared to 2008.
Goldfish cultivation centers are
in West Java, West Sumatra,
and North Sumatra.
Most of the milkfish culture is
carried out in the enbankment,
although it can also be deliv-
ered in fresh and marine wa-
ters with floating net system.
In the period of 2005-2009, the
volume of milkfish aquaculture
production increased by
7.79%. In 2009 the total vol-
ume of milkfish aquaculture
production reached 328,290
tons. Milkfish cultivation cen-
ters are South Sulawesi, East
Java, Central Java and West
Java.
Page 3
Snapper fish aquaculture has not been
very developed in Indonesia. This
causes the volume of its production is
still very fluctuating. Generally, within
the last five years the production vol-
ume increased by 30.53%. Snapper
culture center is located in East Kali-
mantan, Riau Islands and West Java.
Pangasius aquaculture production in
2005-2009 was increased by 49.62%.
Pangasius aquaculture production in
2009 was 109,686 tons, which in-
creased by 7.52%. Pangasius aquacul-
ture center is located in South Suma-
tra, Riau, West Java, and Jambi.
Catfish is one of famous freshwater
fish species that have been cultivated
commercially by the people of Indone-
sia especially in Java. Within last five
years, the volume of catfish aquaculture
production had increased annually by
20.33%. Total production in 2009
amounted to 144,756 tons. Catfish cul-
ture center is located in West Java, Cen-
tral Java, East Java, DI Yogyakarta and
West Sumatra.
Carp aquaculture still has quite large
development opportunities because the
current production results are still not
able to meet the demand of domestic
and export markets. In the period of
2005-2009, there was an increase in the
production of carp fish culture as much
as 16.52%. Carp production in 2009 was
amounted to 46,254 tons. Carp aquacul-
ture centers covering West Java, East
Java, West Sumatra and Central Java.
Agribusiness Update
Crab aquaculture production has in-
creased in the period of 2005-2009
amounting to 14.95%. in 2009, crab
aquaculture had reached 7.516 tons.
Crab aquaculture center is located in
East Java, East Kalimantan and South
Sulawesi.
Indonesia has the potential for seaweed
cultivation area for 1.2 million ha, with a
potential average production of dried
seaweed about 16 tons per Ha. The vol-
ume of seaweed cultivation production
during years 2005-2009 was increased
on average by 36.66%, which the pro-
duction in 2009 reached 2,963,557 tons.
This cultivation center covering South
Sulawesi, Central Sulawesi, East Nusa
Tenggara and East Java.
 Page 4
Cha llenges
So far, there is no govern-
ment policies that hinder
fisheries business. The gov-
ernment encourages the
increased of fisheries sector
and fisheries production
associated with abundant
resources, and also creating
investment opportunities
and any profitable busi-
nesses. There was also the
fulfillment of fish protein
still be continued to be im-
proved so that fish con-
sumption per capita will rise.
The opportunities to sell fish
products in Indonesia and
abroad are still very good.
Elasticity factor of this co-
modity is relatively low,
which is only 1.06. On the
market, the price of fish is
set through an auction sys-
tem in every Fish Auction
Place (Tempat Pelelangan
Ikan = TPI), which is con-
trolled by local fisheries
office or local fisheries coop-
eration colaborate with local
fisheries office. The develop-
ment of fish price by the
traders at TPI shows an in-
creasing trend during the
past period.
At this time, the fulfillment
of fishery products is coming
from fishing and aquacul-
ture. The total number of
fishery products in 2009 was
amounted to 9,816,534
tons. In the last five years
from 2005 to 2009, the vol-
Fisheries Industry at a glance
ume of fisheries production
increased both from fishing
and aquaculture sub-sector.
National fish requirement in
the year 2009 amounted to
7.754 million tons, which
increased by 10.24% from
the last five years from 2005
until 2009. Domestic fish
consumption rate increased
by an average of 5.96 per-
cent per year since 2005.
Ministry of Maritime Affairs
and Fisheries has launched
the optimistic vision of Indo-
nesia as a largest producer
of marine and fishery prod-
ucts in 2015. However, the
distribution of fishery prod-
ucts is relatively still encoun-
tering many challenges.
Distribution problems can
create an irony in which
consumers pay for products
with unreasonable prices
while producers can not
obtain good margin from it’s
price. Therefore, it is neces-
sary to make constructive
and integrated plan in man-
aging the effective and effi-
cient distribution network
system for marine and fish-
eries products.
The development of fisher-
ies face challenges, as fol-
lows:
 Competition in the global
market, including fishery
products from Thailand
and Vietnam, which have
a more advanced and
efficient production proc-
ess compared to Indone-
sia;
 Competition in the do-
mestic market, in which
other regions produce
the same kind of fishery
products;
 Stricter requirements for
labelling, packaging,
product safety, traceabil-
ity, green/eco-labelling
and BTP content require-
ments. It will be a chal-
lenge for the fishing in-
dustry to further improve
quality; “Indonesia has the
 Competition from con-
potential for
sumption of other source
of animal proteins such seaweed cultivation
as chicken, beef, and
area for 1.2 million
eggs;
 Income and purchasing ha, with a potential
ability of consumers. In
line with the commu- average production
nity’s increasing income
of dried seaweed
levels and improving of
welfare, a shift will occur about 16 tons per
in their food consump-
tion patterns. The ten- Ha.”
dency will be in purchas-
ing more “healthy” foods.
It is both a challenge and
business opportunity for
the fishery sector to de-
velop more innovative
products, such as fast
food, frozen products,
canned products, dry
products, and added-
value of seafood
(snapper fillets, tuna loin
steak, etc).
Page 5
Polic ies
Some government policies as outlined in
the form of regulations that relate di-
rectly and indirectly with the fisheries
are described below:
Government Regulation Number
54 Year2002 concerning Fishery, the
fishery resources as the wealth of the
nation of Indonesia should be utilized for
the prosperity of the people, by working
on the efficient and effective manner
and always consider the interest and
sustainability
Facilities and Incentives
For investors, there are several facilities
and incentives that can be granted to
investors pursuant to prevailing laws and
regulations, as defines below:
1. According to Law Number 25 of 2007
regarding Investment, facilities that
be given may be in form of :
 Income tax reduction up to
certain level of investment made
within certain period;
 Import duty holiday or reduction
for imported capital goods,
machinery, or equipment
domesticaly unavailable for
production;
 Import duty holiday or reduction
for raw materials or support
materials for production within
certain period and with certain
condition;
 Value added tax holiday or
postponement for imported
capital goods or machinery or
equipment domestically
“According to Regulation of
the Minister of Finance No.
176/PMK.011/2009, there is
an exemption from import
duty on capital goods and
raw materials for
production for 2 (two) years
that can be granted to a
new company”
unavailable for production within
certain period;
 Accelerated depreciatiton or
amortization; and
 Property tax reduction,
especially for certain business
sectors in certain region or area
or zone.
2. According to Regulation of the
Minister of Finance No. 176/
PMK.011/2009, there is an
exemption from import duty on
capital goods and raw materials for
production for 2 (two) years that can
be granted to a new company.
3. According to Government
Regulation of the Republic Indonesia
number 52 of 2011 concerning
second amandement to the
government regulation number 1 of
2007 concerning income tax facility
for investment in certain business
fields and/or certain regions, the
income tax facilities that can be
given may be in form of :
 net income reduction by 30%
(thirty percent) of total
investments, are charged for 6
(six) years each at 5% (five
percent) per year;
 depreciation and amortization;
 the imposition of income tax on
devidends paid to foreign tax
subject to 10% (ten percent) or a
lower rate according to the
Avoidance of Double Taxation
Agreement taht prevail; and
 compensation for losses for
more than 5 (five) years but not
more than 10 (ten) years.
Negative List of Investment
On May 25, 2010, the Government of
Indonesia issued decrees establishing a
new list of sectors that were either
wholly or partially closed to private
foreign and/or domestic investment
called the Negative Investment List,
known as the acronym DNI. Presidential
Decree No. 36 Year 2010. DNI for
fisheries sectors are:
1. Fishery Capture Uses, Fish Capturing
Ship of the Size up to 30 GT, in Water
Territory up to 12 Miles or less (KBLI
03111) Reserved for Micro, Small,
Medium Enterprises and
Cooperatives
Agribusiness Update
2. Fishery Processing Business
Conducted in an integrated manner
by Catching Fish in Public Water (KBLI
03131 and 03132) Reserved for
Micro, Small, Medium Enterprises
and Cooperatives
3. Rearing of Marine Fish (KBLI 03211),
Marine Fish Hatchery (KBLI 03212),
Rearing of Brackish Water Fish (KBLI
03213), Brackish Water Fish Hatchery
(KBLI 03214), Rearing of Fresh Water
Fish (KBLI 03231), Fresh Water Fish
Hatchery (KBLI 03236), Fishery
Processing Business including Salt/
Fish Drying and Other Water Biota
Industry (KBLI 10211) and Smoke Fish
and Other Water Biota Industry (KBLI
10212), Fishery Processing (UPI)
Business, Fermentation, Reduction/
Chemical Process, Surimi and Jelly
Fish Process (KBLI 10219), Fish
product marketing, Distribution
including : Wholesale Fish Products
and Export trade of Fish Product
(KBLI ), are remark as partnership
4. Fish Catching Business using catching
ship of a size of 100 GT and/or over in
ZEEI catching Territory (KBLI 03111)
need special licences with Terms and
Conditions have been regulated in
accordance with the Regulation of
Minister of Maritime and Fishery
Number PER 12/MEN/2009 on Fish
Catching Business.
5. Usage (Taking) and distribution of
decorative coral/atoll from nature for
aquariums) KBLI 03119 and 46206
need recommendation from the
Minister of Maritime and Fishery
6. Lifting of Valuable Items from a
Sunken Ship’s cargo (KBLI 52229)
need special licences according to
Presidential Decree Number 19 of
2007 on National Committee of
Lifting and Using Valuable Items from
Sunken Ship’s cargo
7. Fishery Catching business using a
catching ship of 100 GT size and/or
bigger in open sea catching Areas
(KBLI 03111), Fishery Catching
business using a catching ship of 30
GT size and/or bigger in water areas
beyond 12 miles (KBLI 03111), Sea
Sand Extraction (KBLI 08104) are
100% local capital.
 Page 6 Fisheries Industry at a glance

S ta tis tics

Aquaculture Production by Subsector

(thousand tons), 2005-2010
marine culture brackish water pond
fresh water pond cage
floating cage net paddy field
2009 2010
2005 2006 2007 2008

Total Aquaculture production was rose annualy from about 4.708 thousand tons in 2009 to 5.478 thousand tons in 2010. Sub sector marine
culture was the highest contributor for aquaculture production. Sub sector marine culture produced around 2.820 thousand tons in 2009
and 3.385 thousand tons in 2010. (Source: Directorate General of Capture Fisheries and Directorate General of Aquacultre (2011))

Fish Capture Production by Subsector

(Thousand Tons), 2005-2010
marine fisheries open water 2010
2007 2008 2009
2005 2006

310 494 296 501

297 294

4408 4512 4734 4702 4812 4846

Total Fish Capture Production was lowered by the decrease of open water production in 2009, but actually there are some increase in
marine fisheries and open water in 2010. (Source: Directorate General of Capture Fisheries and Directorate General of Aquacultre (2011))

Investment Realization for Fisheries Sector by

Foreign Direct Investment, 2007-2011 (source: BKPM, 2011)
2007 2008 2009 2010 2011
Investment Investment Investment Investment Investment
Project Project Project Project Project
Million US$ Million US$ Million US$ Million US$ Million US$
marine fisheries
- - - - - - 2 0,2 4 -
(KBLI 0311)
marine culture
5 24,7 3 2,4 3 5,1 16 16,5 17 8,3
(KBLI 0321)

Investment Realization for Fisheries Sector by

Domestic Direct Investment, 2007-2011 (source: BKPM, 2011)
2007 2008 2009 2010 2011
Investment Investment Investment Investment Investment
Project Project Project Project Project
Billion Rp Billion Rp Billion Rp Billion Rp Billion Rp
marine fisheries
1 0,2 1 3,1 2 24,7 2 1 3 -
(KBLI 0311)
marine culture
- - - - - - - - 1 0,02
(KBLI 0321)
 Page 7
In ves tment Guide
Permit License Mechanism
Attachments required to be submitted
with applications :
1. Letter of recommendation from the
related country or letter which is
issued by the Embassy/
Representative Office of the related
country in Indonesia if the applicant
is The Government of another
country;
2. Copy of valid passport if the
applicant is a foreign individual;
3. Copy of Articles of Association of
the company in English or its
translations in Bahasa from sworn
translator if the applicant is a
foreign company;
4. Copy of valid Identity Card (KTP) if
the applicant is an Indonesian
individual;
5. Copy of Articles of Establishment of
the company and any amendment
(s) and approval from the Minister
of Law and Human Rights if the
applicant is incorporated under the
law of Republic of Indonesia;
6. Copy of Tax Registration Code
Number (NPWP) for the applicant,
either for Indonesian individual or
company which is incorporated
under the law of the Republic of
Indonesia;
7. This application should be properly
and duly signed with sufficient
stamp duty by all applicants (if the
company is not yet incorporated) or
by the company's Board of
Directors (if the company is already
incorporated) attached with Power
of Attorney with sufficient stamp
duty from whom signs and/or
submits the application if the
applicant is represented by another
party (provisions concerning the
Power of Attorney is strictly
regulated in this regulation (article
63).
One Stop Shop
Based on Presidential Decree 27/2009
and as part of its 100-day program,
BKPM is implementing a one-stop-shop
system (PTSP), to cut bureaucratic
redtape and allow investors to process
business licenses faster. Its goal is to
streamline and consolidate the number
of steps and places an investor must go
for business permit issuances.
Agribusiness Update
The program requires the consent of
some 16 ministries relevant to the
investment approval process, to
delegate its authority to BKPM in
granting licensing and non-licensing
services. As of February 5, 2009, all
relevant ministries have signed off on
the various decrees necessary, and
BKPM is moving forward with the
implementation process at both the
central and regional level.
National Single Window for Investment
(NSWI)
In order to facilitate PTSP even further,
the National Single Window for
Investment (NSWi) was created. NSWi is
an electronic platform for investments
that enables investors to apply for
license and non-license services
online. The ability to fully automate the
investment license process would
significantly enhance the efficiency of
licensing services. The system was first
launched in January 2010 in the Free
Trade Zone and Free Port of Batam.
Contact Us:
Directorate of Planning for Agribusiness
and Other Natural Resources
Deputy of Investment Planning
Jalan Jendral Gatot Subroto No. 44
Jakarta 12190
Phone: +62 21 522 5837
Fax: +62 21 522 5837
E-mail: info@bkpm.go.id
Website: www.bkpm.go.id