SIGNING OF A MEMORANDUM OF UNDERSTANDING BETWEEN
THE INDONESIAN SUGAR REFINER ASSOCIATION
AND MITRA OPTIMA SME COOPERATIVE DKI JAKARTA
To overcome the problems faced by Small and Medium Sized Industries (SMI), especially in the food and beverage industries, in obtaining white sugar and a guarantee of the quality of white sugar on the market, the Indonesian Sugar Refiner Association (Asosiasi Gula Rafinasi Indonesia/AGRI hereafter referred to as AGRI) has established a Memorandum of Understanding with various SMI Cooperatives. One of which is Mitra Optima Small and Medium Sized Enterprises (SME) Cooperative of DKI Jakarta Province, on June 13, 2013, in relation to the supply of white sugar for small and medium sized food industries for the DKI Jakarta province.
The supply of white sugar is regulated by a government regulation stipulating that white sugar are only for food, beverage and pharmaceutical industries, and its distribution is only done through appointed distributors, so that white sugar products do not enter the household consumer market. This regulation puts small and medium sized food and beverages industries at a disadvantage because they are not able to use white sugar as their main ingredient and often face difficulties in obtaining white sugar, which is only sold in bulk. In addition, they also have to face fluctuating prices and white sugar shortages, which often occur in the local markets.
The partnership initiative has received strong support from the central government and the DKI Jakarta regional government because it is a manifestation of the Law of the Republic of Indonesia Number 20 of 2008 regarding Micro, Small and Medium Sized Enterprises, especially Article 16 an Article 25. Mitra Optima SME Cooperative located in the DKI Jakarta Province has always made special effort to supply white sugar to SMI that produce food and beverages, especially those that are under the supervision of the Board for Micro, Small and Medium Enterprises and Trade of the DKI Jakarta Province. It is expected that issues regarding white sugar supply can be immediately overcome.
Euis Saedah, Director General of Small and Medium Sized Industries – Ministry of Industry, who represented the government, expressed her appreciation to the Chairman of AGRI who has initiated memorandums of understanding with eight SMI cooperatives in six provinces. This step is a solution to the difficulties in obtaining sugar which is the main ingredients for food and beverages products. Small and medium sized industries often receive orders that they cannot fulfill because of the difficulty in obtaining the main ingredients. A guarantee of availability of main ingredients for small and medium sized industries is very important, especially considering that this particular industry supports the national economy.
The partnership will increase competitiveness and product quality, as well as support the business certainty for small and medium sized industries. In addition, the partnership can also help overcome the issue of the limited ability of the food processing SMI in purchasing white sugar in bulk, the shortage in supply and fluctuations in the price of white sugar. It will also stimulate the economy and support new employment opportunities in the DKI Jakarta Province.
Saedah further added that the total number of food SMI almost dominates the total number of SMI in Indonesia. Around 1.5 million units out of a total of 3.8 million units of SMI nationally are in the processed food industries, and 30% of them are in the food and beverages industries. The growth in the food industry is relatively high, averaging 16 percent above the growth of food SMI which is only approximately 10%. This definitely requires special attention from related parties. We need to prepare strategies for 2015 in which the ASEAN community will enter a new era with the establishment of the ASEAN Economic Community (AEC). In this globalization era it is important to acknowledge that SMI needs to have four strategic elements, which are human resource competency, technology, standards and Intellectual Property Rights for SMI products. It is time for SMI to be professional and make efforts towards the modernization of their business because without those SMI will not be able to compete in the globalized market.
Rizafsyah Taufik, Head of Mitra Optima SME Cooperative, in his opening speech expressed his gratitude for the support from the Ministry of Industry and the Board for Micro, Small and Medium Sized Enterprises Cooperatives and Trade in the DKI Jakarta Province for their active role in facilitating this partnership. He also expressed his special appreciation to AGRI who has given a lot of attention to the development of SMI. It has been proven that SME has strategically contributed to the economic structure and that even in the economic crisis SMI has managed to survive. Mitra Optima SME Cooperative shall immediately follow up on the supply of white sugar to members within the DKI Jakarta area.
High appreciation was given by H. Suryo Alam, the Chairman of AGRI, to Madame Euis Saedah, SMI Director General who has given significant support to the signing of the Memorandum of Understanding. He further explained that white sugar is a sugar with international standards which is safe for consumption and is ‘halal’. However, the general public’s understanding of white sugar is often misleading. They assume that white sugar is a half-processed sugar, which is not yet fit for consumption and must be further processed. Eight current members of AGRI supply approximately 50% of the national demand for sugar even though some main ingredients are still imported due to a shortage of land for establishing new sugar cane plantations. This Memorandum of Understanding is expected to be able to overcome obstacles in obtaining white sugar currently faced by SMI, especially considering that the Board of Micro, Small and Medium Sized Enterprises and Trade, DKI Jakarta Province will directly supervise the supply of white sugar to cooperative members within the DKI Jakarta Province, said H. Suryo Alam, Chairman of AGRI.
Head of the Board of Micro, Small and Medium Sized Enterprises and Trade, DKI Jakarta Province, represented by Arvian highly supported the signing of this Memorandum of Understanding because it is in accordance with Law Number 17 of 2012. Mitra Optima SME Cooperative was praised because despite being new, they were able to establish a partnership with members of AGRI which are large-scale companies. Arvian requested Mitra Optima SME Cooperative to be more open to partnerships with other related parties. This partnership can help increase production and development of SMI within the DKI Jakarta area.
The signing of the partnership memorandum of understanding was done by the First Party, H. Suryo Alam, Chairman of the Indonesian Sugar Refiner Association and the Second Party, Rizafsyah Taufik, Head of the Mitra Optima SME Cooperative, DKI Jakarta, witnessed by Euis Saedah, Director General for Small and Medium Sized Industries – Ministry of Industry, and Ratnaningsih, Head of the Board for Micro, Small and Medium Sized Enterpries Cooperative and Trade, DKI Jakarta Province.
The event was also attended by Arvian as the representative of the Head of the Micro, Small and Medium Sized Enterprises Cooperative and Trade Office Province in DKI Jakarta, members of the Mitra Optima SME Cooperative, DKI Jakarta, H. Suyono, Head of the Association for Small and Medium Sized Agro Industries – West Java, management and representatives of AGRI members, print and electronic media reporters, and other invitees.
This occasion was also used by H. Suyono as a forum to share his experiences in the implementation of the memorandum of understanding with AGRI. H. Suyono is the Head of the Association for Small and Medium Sized Agro Industries, West Java, the party who has already implemented a partnership with the Indonesian Sugar Refiner Association.
Up to now, AGRI has established Memorandums of Understanding with 8 (eight) cooperatives in 6 (six) provinces, which are with the Association for Small and Medium Sized Agro Industries (AIKMA) through the Koritan Cooperative, West Java on 14 August 2012, with Wijaya Mulyo Cooperative, Central Java, on 22 November 2012, with Serba Usaha Nusantara Cooperative, Central Java, on 22 November 2012, with the Group for Development of Small Businesses (PUPUK), Yogyakarta, on 5 December 2012, with Village Cooperative (KUD) “WENANG”, North Sulawesi, on 18 January 2013, with “WARGA INDAGKOP” Cooperative, Banten, on 18 March 2013, with “KORPRI BANTEN” Cooperative, on 18 March 2013 in Banten, and finally on 13 June 2013 with Mitra Optima SME Cooperative in DKI Jakarta.