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Japan, Russia to Develop Fish-Processing Centers in Indonesia

Sustainability Processing Economics +4 more

INDONESIA - In a bid to accelerate the development of the fisheries industry from upstream to downstream, the government has persuaded foreign investors to develop fish-processing centers in a variety of locations across the archipelago.

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The companies, from Japan and Russia, have shown serious interest in opening fish-processing plants, along with associated cold-storage and power facilities in 36 locations, including Sabang, Aceh; Natuna, Riau Islands; Muara Baru, Jakarta; and Makassar, South Sulawesi, reports the JakartaPost.

“The Japanese have stated that they want to develop six spots. I’m meeting them tonight to talk about the next steps,” said Maritime Affairs and Fisheries Minister Susi Pudjiastuti.

Susi said the Sabang project, where it is planned to build a tuna-cultivation center, would be the earliest project to begin operation. The remaining projects are expected to be realized next year at the soonest.

Each plant will need a minimum investment of between US$2 million and $5 million, she further explained.

Russian project management firm Blackspace, meanwhile, will develop 30 plants, after having completed Untia Port in Makassar. The port has been operating since November in cooperation with state-owned fisheries firm Perikanan Indonesia (Perindo).

President Joko “Jokowi” Widodo during the inauguration of the port last month said it was expected to channel the catches of local fishermen by sea and air to accelerate delivery to other regions.

It will support the activities of fishermen operating in 713 fishing zones around the Makassar Strait, Bali Sea, Flores Sea and Bone Bay. The zones are known to produce 927,700 tons of fishery products every month.

Built on a 5.4-hectare site, Untia Port is capable of servicing 300 vessels of between 5 and 30 tons. The port, Jokowi said, was the first port in the country that was integrated with local fishing hubs, harbors and airports.

Blackspace has announced its plan to build a similar port in Natuna, according to Minister Susi. “We have abundant fish but not enough ships, ice or processors,” she said.

The President has issued Regulation No. 44/2016 on the foreign investment list that strictly prohibits foreign investors from entering the fishing business but only allows them to run fisheries businesses such as cold storage, processing and aquaculture.

The measure is aimed at maintaining the fish supply for local fisheries businesses.

Head of fisheries at the Indonesian Employers Association (Apindo), Thomas Darmawan, lauded the progress but expressed concerns over the lack of ships to supply the foreign-operated facilities with sufficient raw materials.

Since Susi has taken up her post, she has pulled 1,132 ships out of operation to check their legal status. Some have been deemed eligible but a new policy has banned all former foreign vessels from operating, causing a significant drop in catches and supply to the processing industry.

“Investors would be more attracted if the supply of fish was ensured. We need to prepare our capability by building ships as well as loosening the policy by letting companies use legally imported ships,” said Thomas.

However, Susi has been firm in her policy in order to boost the local shipping industry’s capabilities.

The ministry has proposed to the Finance Ministry a lower import tariff for materials needed to build ships of 30 gross tons. So far only 300 ships have been finished and distributed.

Susi acknowledged that the slow progress of local shipbuilding was a result of the introduction of the new policy.