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Certification and Its Role in Enhanching

Feed Industry Competitiveness

in Indonesia*)

Hadrian Sjah Razad

Director of Development

PT. SUCOFINDO (Persero)

*) Presented on The International Conference : Sustainable Feed Chain Development in Indonesia, Bandung, 14 July 2010

• SUCOFINDO at a glance

• The Current Changing Condition

• Sector Trend & Impacts

• Industry Standards & Quality Requirements

• What is Certification?

• Benefit of Certification

• SUCOFINDO & Feed Safety Certification

• Accreditation & Approval for SUCOFINDO

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� State Owned Company (BUMN)

� Established on 22nd October 1956

� Shareholders

95% Indonesian Govt.

5% SGS, Switzerland

• Customer Focus : To fulfill customers expectation by

delivering innovative and diversified service, complying

to standard and quality

• Competence : To provide reliable and qualified human

resources according to the standard of professionalism

and competition

• Integrity : To highky respect honesty business ethics, and commitment fulfillment to the stakeholders

• Teamwork : To bring forward team coorperation and

collaboration with the third parties to achieve

organization effectiveness and synergy

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� BSN

� SGS Geneva

� ASTM USA

� NKKK Japan

� NATA Australia

� FOSFA UK

� RWTUV Germany

� IFIA UK

� PSB Singapore

� SIRIM Malaysia

� GAFTA

� UL USA

� GMP+ International

� CCIC China

� INSPECTA Ceko

� Etc.

• Increasing living standard– lack of hunger creates concerns beyond „getting enough food“– urbanisation „remotes“ agriculture to nostalgy

• Reduced risk of war– importance of self-sufficiency decreasing

• Global trade with food and feed– retailers buy cheap AND quality everywhere, but also ask for

– guarantees that the products are safe

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• Consumers– ask except of low prices: for safe and high quality food

from healthy and „happy“ animals,

• Society– demands compliance with animal welfare, environmental

protection and the principles of sustainability

• Legislative– concentrates on feed and food safety, transparency and

tracing back (but also increasingly on animal welfare)

• Feed Industry ���� to be competitive, it is

not any more enough to offer cheap

products; except of low prices, the market

asks also for:

– high quality feed

– nutritious and healthy

– safe and no risk products

– animal well being

– sustainable production

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General:

• Emphasis on market-driven systems;

• Role of private sector important;

• Smallholders becoming commercialized; &

• Agribusiness & agro-industry policy reforms & investment accelerating pace of Agribusiness -

Agroindustry development.

Feed Industry as a part of Agrifood Systems:

• Soaring food prices - primary production more viable

• Higher incomes – demand for high value commodities

• Technological changes - value addition

• Trade liberalization - cross border demand

• Urbanization - product quality & delivery standards

• Changing diets - more meat, fish & fruits

• More women earning - processed or pre-prepared

• Global manufacturing - value addition

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Organizational & Institutional Changes:

• Growing concentrations - retail & processing

• Larger agribusiness enterprises - economies of scale

• Increasing private sector standards – food quality & safety

• Food transactions - increasing use of contracts

• Retailers/manufacturers - rely on specialized

procurement/dedicated wholesalers

• Sale of food - supermarkets replacing local markets

Feed Industry as a part of Agrifood Systems:

• Soaring food prices - primary production more viable

• Higher incomes – demand for high value commodities

• Technological changes - value addition

• Trade liberalization - cross border demand

• Urbanization - product quality & delivery standards

• Changing diets - more meat, fish & fruits

• More women earning - processed or pre-prepared

• Global manufacturing - value addition

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Positive Effect:

• Increases value addition opportunities.

• Agro-processing include feed processing

stimulates demand & market size.

• Exporters/agro-processors provide crucial inputs

& services.

• Agro-industries stimulate innovation.

• Encourages productivity & improves quality

Negative Effect:

• Standards and contracts difficult for small-

holders.

• Small-scale agro-processors unable to compete

with large scale manufacturers.

• Traders in local markets squeezed out by

specialized procurement practices & certified

products.

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• Industry standards:– Manage risks relating to product safety & quality;

– Enable comparisons of prices between suppliers,

– Reduce transaction costs; &

– Strengthen consumer confidence & loyalty.

• Branding & labels can differentiate products.

• Certification informs consumers about supply chain practices.

• Standards ensures consumer protection & provides both

incentives and sanctions for improvement of product quality & safety.

• A process that involves an independent body (certification body) reviewing and auditing a company’s management system.

• Its purpose is to verify the compliance of a company’s management system to the requirement of the standards.

(based on ISO term)

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� Increased customer confidence.

� Increased image and competitiveness of the company.

� Increased opportunities when entering global markets.

• GMP+FSA – Approved Certification Body Since 2002 by The GMP+ International

– 4 Approved GMP+ Auditors

– 33 Organization certified in Indonesia (2010), 16 Organization by

Sucofindo

• HACCP System– 22 Certified Organization (2010)

– Accredited by KAN

• ISO 22000:2005

– 2 Certified Organization (2010)

• PBSF (Plant-Based Stock Feed) – AQIS Australia

– 15 Organization Audited

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