PARTNERSHIP DEVELOPMENT STRATEGIES OF COCONUT AND PALM SUGAR ENTERPRISE

MINISTRY OF MINISTRY OF COOPERATIVES AND SMALL-MEDIUM ENTERPRISES

REPUBLIC OF INDONESIA

Delivered in :

National Workshop

Developing Small Enterprise of Coconut and Palm Sugar

Thursday, December 17 2015

Banyumas, Central Java

1

LEGAL BASIS OF PARTNERSHIPUU No. 20 2008

Act of Micro, Small and Medium Enterprises

• 13 Chapters concerning Partnership

• Definition of Partnership:

• An either direct or indirect cooperation within enterprise

integration, in the principle of needing, trusting, strengthening and

benefiting involving stakeholders of Micro, Small, and Medium

Enterprises and Big Enterprises.

• National Government, Local Government, Enterprises, and

citizens facilitate, support, and stimulate partnership activities, in

the principle of needing, trusting, strengthening and benefiting

among stakeholders

• Partnership between Micro, Small and Medium Enterprises and

Big Enterprises includes skill-passing process in production,

processing, marketing, funding, human resources as well as

technology.2

Governmental Regulation of Partnership No.44 th 1997

1. Government and Enterprise World gives maximum

opportunity of partnership to Small Enterprises

2. Cooperation between Small Enterprises and Medium

Enterprises and/or Big Enterprises is accompanied with

direction and development

3. Direction and development of Small Enterprises and Big

Enterprises apply in productive resources, technical

guidance, technology and funding

4. Types of partnership: plasma-core, sub-contract, general

trade cooperation and franchise

5. Foundation organizations make prioritized services and

lenient fund access with simple procedure, lenient

conditions, training and low interest rate

3

Introducing Partnership

Either direct or indirect cooperation within

enterprise integration, in the principle of

needing, trusting, strengthening and

benefiting involving stakeholders of Micro,

Small, and Medium Enterprises and Big

Enterprises.

a.Needing each other

b. Trusting each other

c. Strengthening each other; and

d. Benefiting each other

PRINCIPLE OF

PARTNERSHIP

a. Franchise

b. General trade

c. Distribution and agency

d. Profit sharing

e. Operational cooperation

f. Joint venture

g. Outsourcing; and

h. Other types

Types of

Partnership

Empowerment through partnership

1. Creating enterprise nuance to trigger Partnership, according to Governmental Regulation no. 44 1997 and Act no. 25 2007

2. Increasing equality

3. Providing strengthening/stimulating support

4. Developing access of economic resources

5. Developing access of information, publication and promotion

6. Involving community

7

Advantages of Partnership

1. Standardization of procedure, mechanism

and products

2. Avoidance of unnecessary competition

3. Avoidance of domination and protection of

barrier

4. Risk sharing

5. Economics of scale and scope

6. Access and maximization of resources,

technology and market

7. Uniting forces

8. Decreasing and bridging gap

9. Community prosperity

10. Stability

8

Market opportunity and product potential of Coconut and Palm Sugar

Main Products

1. Production of Coconut Sugar in Banyumas, Banjarnegara and Purbalingga Regency reaches more than 96 tons per year in 39.000 units of Small Enterprises.

2. Production of Organic Crystal Coconut Sugar reaches 220 tons per month in certified 1.642 farmers

Market Opportunity

1. Domestic: Food and beverage factories, food retailers, and supermarkets.

2. Export to Asian, American and European Countries: Chocolate factories, bakeries, beverages, retailers, and supermarkets.

3. Reaches 800 tons per month and keeps growing

Challenges in marketing Coconut Sugar and Palm Sugar

Unhealthy competition among farmers of coconut and palm sugar due to their growing in numbers

Main buyers begin to enter the basis of production

Competition with other countries like Philippines

Cooperatives shall compete with high capitals

Product Mechanism

obtaining sap from coconut trees

Farmers Producers Collector Cooperatives

cooking coconut sap to coconut sugar

Pembelian, Mengorganisir produk & Penjaminan Mutu

buying, packaging, distributing and promoting products

BUYERS

Collecting

ICS

P3R

Partnership

Matching products with grade

1. Conducting Internal Control System

2. Using standardized production technology

trials, practice of producing Crystal Sugar and other products

assessment, socialization, registration and farming contract, internal and external inspection

Strengthening Farmers’ capacity

Maintaining quality control

Certifying Organic Products (of soil and processing)

Collecting products

Farmers

Cooperatives

Development

Strategies of

Crystal Sugar

B

F

C

E

A

Standardized machine and

factory

Certifying products according to buyers’

request

Flexible financial source

Maximizing branding and packaging

Actively taking part in domestic and

oversea fair

D

Supplying products

according to domestic and

overseas market demand

Role-distribution in gaining continuous control over market of organic coconut sugar:

Farmers Maintaining the quality and authenticity of organic products

Collector Maintaining the quality and authenticity of organic products the stability of the supply

CPU (finishing process) Maintaining the quality and authenticity of organic products, schedule of processing and delivery

Companies/distributors/exporters

Maintaining the quality and authenticity of the organic products, stability of market and schedule of delivery

Government Providing facilities of production and regulations to promote enterprise development, etc.

Cautions in establishing and continuing marketing partnership

Make sure that our products are really qualified as the demand of the buyers

Provide services for the producers of crystal coconut sugar with social care, education etc.

Negotiate with buyers in as cooperative and profitable way as possible among all stakeholders

Establish MOU or partnership contract with buyers Make sure to have written agreement with buyers. Have

cash payment from new buyer in the beginning purchase or 50% Down Payment for a known buyer

Supervise the schedule of delivery through processing management including raw material supply, advanced processing, packaging and shipping.

THANK YOU

Deputy of Marketing and Enterprise NetworkingMinistry of Cooperatives and Small-Medium

Enterprises Republic of Indonesia

HR Sasuna Said Street. Kav. 3-4 Kuningan, Southern Jakarta

Phone 021-52992861Fax. 021-5205285