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Value Initiative Program (VIP)

URBAN VALUE CHAIN DEVELOPMENT: TOFU AND TEMPE SECTOR IN GREATER JAKARTA. URBAN VALUE CHAIN DEVELOPMENT: TOFU AND TEMPE SECTOR IN GREATER JAKARTA. URBAN VALUE CHAIN DEVELOPMENT: TOFU AND TEMPE SECTOR IN GREATER JAKARTA. Value Initiative Program (VIP). Background. Background. Indonesia Map.

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Value Initiative Program (VIP)

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  1. URBAN VALUE CHAIN DEVELOPMENT: TOFU AND TEMPE SECTOR IN GREATER JAKARTA URBAN VALUE CHAIN DEVELOPMENT: TOFU AND TEMPE SECTOR IN GREATER JAKARTA URBAN VALUE CHAIN DEVELOPMENT: TOFU AND TEMPE SECTOR IN GREATER JAKARTA Value Initiative Program (VIP)

  2. Background Background

  3. Indonesia Map Indonesia Map

  4. Project Target Areas Project phase expansion plan across greater Jakarta

  5. Why Urban? • In 2007, the total population of Indonesia was 232.9 Million people; approximately 40% of the population categorized as poor people • The National Survey conducted in 2002 revealed that 34.64% of total poor people living in urban area • 50% of the total population live in urbanareas; and 40% of urban residents are employed in the informal sector.

  6. Why Tofu/Tempe? • Tofu/tempe a staple food for approximately 40 million poor people • Most tempe/tofu producers and vendors live in urban areas and are informal workers. • The tempe/tofu industry and vendors offers employment opportunities for individuals with limited formal education. It also offers an additional source of income for their extended families (remittances).

  7. Enterprises in the sector Tofu Producers Tempe Producers Asset/ Provision Product- Capacity Income Worker

  8. Continued Enterprises… Lopper (middlemen) / Wet market vendors Cart Vendors Asset/ Provision Product- Capacity Income Worker

  9. Analyzing the Sector: Value Chain Map Input Supply Processing Informal and Formal Marketing Food Preparation & Snack Food Vendor Consumption 10% “Out door eaters” Mini-Mart Large/lead producers Soybean wholesalers Food stalls Formal Market Hospital 10% Catering Medium sized producers Wet Market / Cart Vendors School Soybean Agents Take home consu-mers 20% Wholesaler/ Agents 10% 80% Renter producers Renter producers 20% Producer Group 50% Small producers Association of soybean, tofu/tempe producers, and vendors; cooperative Consumer associations Food and hygiene inspection Body (BPOM) Ministry of Environment, Ministry of Trade and Industry, Governments, Banks/ MFI, Research Institute

  10. Value Chain Analysis Consumption Constraints Consumed by large poor people Opportunity Food & snack street vendor Used cooking oil & other toxic additives effect human health Only use 100% of fresh cooking oil will lead to increase sales informal markets is the biggest market Informal & formal marketing Lack of access to finance Bad environmental effect due to liquid waste of tofu production Limited shelf life Use of formaldehyde in tofu Cleaner production can reduce cost g n i s s Liquid waste can be used for biogas e g c Inefficient production n o i r s P s e c o r P y l p Long term availability of traditional fuel y p l u p Re-used oil stove for cart vendor will attract consumer s p t u u s p t n u I p n I

  11. Analyzing the sector: Constraints and Interventions

  12. Analyzing the sector: Constraints and Interventions

  13. Analyzing the sector: Constraints and Interventions

  14. Strategy & Interventions • Improve production process • Improve production in tofu • Improve production in tempe • Improve the stoves for street vendors • Promotion of cleaner healthy products • Branding and marketing

  15. Intervention Outreach Note : * not counted due to the double counting with other interventions

  16. Intervention Plans

  17. Background Improve Production in Tofu • What? • Producers improve their facilities so that there is an increase in efficiency, hygienic production and improved environment in terms of reducing pollution and smoke • Why? • Reduce cost and improve the environment • More hygienic and healthy products available in the market • Problem? • Producers are unaware of the options for improving production and addressing environmental issues • Weak linkages with equipment supplies and technical assistance

  18. Improve Production in Tofu What Service? • Pilot stage • Information on cleaner production (CP) and good hygiene practice (GHP) provided with equipment as an embedded service to producers • Information on CP and GHP provided by consultants to producers • Uptake • Training by MOE for new IP experts • Information on successful pilot project to banks and the bank works with the IP experts developed by MoE.

  19. Improve Production in Tofu • How? • Establish a pre-pilot • Demonstration tofu factory that provides a working example to other producers and IP experts Project will facilitate: • Pilot: 3 models • Uptake : 2 models

  20. Improve Production in Tofu

  21. Improve Production in Tofu

  22. Improve Production in Tofu Business Models - Pilot #3 Business Model #1 Business Model Information & consultancy (100)Tofu Producers (5)Equipment supplier (3) Financial Institution (60) Tofu Producers Information IDR IDR Fee IDR Fee Equipments Consultancy #2Business Model Equipment supplier Information & consultancy Independent consultant (240) Tofu Producers (12) Lead producer IDR through commission in sales Equipments Equipment supplier

  23. Improve Production in Tofu IP Experts Producers Vendors Ministry of Environment IP Experts Producers Vendors Training Producers IP Experts Vendors #1 Business Model – Market Uptake 2 time conduct training 40 IP’s Expert 800 Producers 16000 vendors

  24. Improve Production in Tofu #2 Business Model – Market Uptake Financial Institution Producers Vendors Bank Financial Institution Producers Vendors Access to finance Info Producers Financial Institution Vendors 10 financial institution 200 producers 4000 Vendors

  25. Improve Production in Tempe Background • What? • Producers improve their facilities and technology so that there is increased efficiency and improved hygiene during the production process • Why? • Improved efficiency will enable greater quantities to be produced in less time and the working environment will be improved • More hygienic and healthy products available in the market • Problem? • Producers are unaware of the options related to new technology and good health production standards

  26. Improve Production in Tempe What Service? • Pilot stage • Information on equipment as an embedded service to producers • Information on access to financing options from financial institutions • Uptake • Metal Workshop Association provides information on equipment and design to workshops who then provide equipment to producers • Access to financing from Banks and other financial institutions

  27. Improve Production in Tempe • How? • Establish a pre-pilot • Build a demonstration tempe factory that provides a working example to other producers and IP experts Project will facilitate: • Pilot: 2 models • Uptake : 2 models

  28. Improve Production in Tempe

  29. Improve Production in Tempe

  30. Improve Production in Tempe Business Models - Pilot #1 Business Model (10) (200) (2000) #2 Business Model (5) (250) (2500)

  31. Improve Production in Tempe Business Model - Uptake #1 Business Model- Uptake (1) (25) (500) (5000)

  32. Improve Production in Tempe #2 Business Model- Uptake (1) (20) (500) (5000)

  33. Improve Production for street vendor Background • What? • Producers want to improve their productivity through reducing fuel costs. Per day, a street vendor has available 3 liters of used cooking oil. This used cooking oil has potential to be used for fuel rather then used again for cooking the following day • Why? • By using old cooking oil as a fuel instead of for cooking will have an impact on the quality of the product as it will be more hygienic and vendors will be able to reduce the food hazard risk • Problem? • Information gap: where can street producers can get information on the options for alternative stoves

  34. Improve Production for street vendor What Service? • Pilot stage • Information on availability of stoves that • burn used cooking oil • Uptake • Information and linkages to suppliers of cooking stove • that burns used cooking oil

  35. Improve Production for street vendor • How? • Project will facilitate the establishment of a pre-pilot that will: • Develop the basic design of a stove that burns used cooking oil and is appropriate for street vendors • Project will facilitate: • Pilot: 2 models • Uptake: 2 models

  36. Improve Production for street vendor

  37. Improve Production for street vendor

  38. Improve Production for street vendor #1 Business Model – pilot Stove supplier info on stove Street vendor IDR (5) (500) #2 Business Model – pilot Lead street vendors info on stove Street vendor (5) (100)

  39. Improve Production for street vendor #1 Business Model – uptake (1) (50) (5000)

  40. Improve Branding and Marketing • What? • Producers want to differentiate between healthy and non-healthy tempe and tofu product through labeling and certification. Producers and vendors should know how to market their improved products to their consumers • Why? • Labeling and certification may lead to increased sales. • Problem? • Information gap: where can producers get information about product registration, labeling regulation and certification • Where can producers access marketing and promotion tools Background

  41. Improve Branding and Marketing How? Project will facilitate:- Pilot: 2 Models, - Uptake: 1 Model What Service? Pilot: Producers provide information on product quality to vendors Primary cooperatives provide information on branding and marketing to producers Uptake Secondary cooperative provide labeling services to primary cooperatives and other producers

  42. Improve Branding and Marketing

  43. Improve Branding and Marketing

  44. Improve Branding and Marketing Info on better product quality Vendors Producers Business Model - Pilot #1 Business Model (40) (2) #2 Business Model (100) (1) (2000)

  45. Improve Branding and Marketing Business Model - Uptake #1 Business Model (1) (10) (1000) (20000)

  46. Some Key Learning Areas • How a project engages with social networks • Women’s role in production • How to convince the Government to provide better services from small and micro businesses? • What are the impacts of the sector on rural/urban linkages? • How does branding work for consumer awareness in products that matter for the poor? • How will financing work for small informal producers (tempe)? • How can we make a difference when there are other programs that have not been effective – what did we do differently? • How can we work with large associations?

  47. Potential Challenges • Certification for the products (tofu and tempe) may not work? • Given the dispersed nature of the industry and the lack of clear industry leaders communications problems may hinder moving from pilot to uptake • How does the sector engage the relevant government agencies to support and facilitate the market uptake of specific interventions related to improving the environment and accessing financing. • Knowledge and awareness increases brought about by the project may not be transferred to other workers due to the migratory nature of the workers

  48. Terima Kasih! – Thank You

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