SIGNING OF MEMORANDUM OF UNDERSTANDING BETWEEN
THE INDONESIAN SUGAR REFINER ASSOCIATION
WITH “WENANG” VILLAGE COOPERATIVE
IN JAKARTA, ON JANUARY 18, 2012
Partnership relating to the supply of white sugar has extended beyond Java with the Signing of a Memorandum of Understanding between the Indonesian Sugar Refiner Association/Asosiasi Gula Rafinasi Indonesia (AGRI) and “WENANG” Village Cooperative on January 18, 2012, in Jakarta. This is an initiative from the Director General for Small and Medium Sized Industries, Ministry of Industry, Republic of Indonesia, regional government of North Sulawesi, namely the Office of Province of Industry and Trade in North Sulawesi and the Indonesian Sugar Refiner Association (AGRI). The signing of this Agreement was witnessed by central and regional government represented by the Director General for Small and Medium Sized Industries, Minister of Industry, Euis Saedah, and the Head of Office of Province of Industry and Trade in North Sulawesi, Sanny Parengkuan.
Partnership between large businesses and micro, small and medium sized enterprises is a true manifestation of Law of the Republic of Indonesia Number 20 of 2008 Regarding Micro, Small and Medium Sized Enterprises, especially Article 16 and Article 25.
Even though currently white sugar is not sold on the open market, and is only intended for food, beverage, and pharmaceutical industries (Regulation of the Minister of Trade Number 527 of 2004), the Chairman of AGRI, Suryo Alam, is committed to guaranteeing the supply of white sugar to meet the demands of national food Small and Medium Sized Industries (SMI). One way of achieving this is by establishing an understanding between AGRI and Wenang Village Unit Cooperative, North Sulawesi. Small and Medium Sized Food and Beverage Industries will no longer face difficulties in obtaining white sugar because the “WENANG” Village Cooperative will have legal certainty in the supply of white sugar to SMI in North Sulawesi.
Since 2012 AGRI has established partnerships with SMI Cooperatives in West Java, Central Java, and Yogyakarta provinces, and now in North Sulawesi relating to continuous supply, lower prices, and stability. Suryo is sure that this partnership will encourage efforts to increase the product quality of food SMI, for both the domestic markets and export, especially since so far SMI have faced obstacles in accessing white sugar. This partnership will continuously be developed with cooperatives in other provinces throughout Indonesia.
Meanwhile the Director General for Small and Medium Sized Industries, Ministry of Industry, Euis Saedah said that with this partnership, SMI will be able to easily obtain white sugar. In addition, with the lower price, SMI will be encouraged to use this type of sugar. Furthermore there will be a guarantee of continuous supply from white sugar factories. In this regard, she expressed great appreciation for the efforts made by AGRI.
She further stated that the potential of SMI in the food and beverages sector is relatively high. Based on data from the Ministry of Industry, there are currently 1.5 million units of food SMI. Meanwhile in total, there are 3.8 million units of SMI nationally. The annual growth of food SMI is at an average of 16%, above the average growth of general SMI at 10%. She hopes that the signing of the partnership between KUD and AGRI can increase the competitiveness of domestic food SMI products, especially in preparation for the ASEAN Economic Community in 2015, because even domestic consumers are becoming more conscious of healthful food and beverages.
It is hoped that the government and large scale industries can assist SMI through their corporate social responsibility (CSR), especially in the provision of equipment required by SMI and other much needed assistance.
Lower prices of main ingredients made available to SMI through partnerships such as these are meaningful and will, in the long run, be significant in supporting the growth of SMI. Euis Saedah hoped that in 2013 there will be an increase of SMI in the western areas of Indonesia.
Joost Sepang, Chairman of the “WENANG” Village Cooperative, in his welcome address hoped that large industries will take SMI into account by supervising and encouraging the growth of these SMI. This signing will have a positive impact on SMI business certainty and growth. Joost stressed that currently SMI in North Sulawesi requires 1,000 tons of white sugar for its production. This amount is bound to increase along with the increase of SMI that realize the superiority of white sugar for the production of food and beverages.
The regional government of North Sulawesi and “WENANG” Village Cooperative are sure that the signing of this Memorandum of Understanding will be useful for the establishment and development of SMI and other SMI cooperatives should follow suit. Sanny Parengkuan, Head Office of Province of Industry and Trade in North Sulawesi in his working visit to Manado recently, expressed gratitude to the Director General for Small and Medium Sized Industry, Ministry of Industry who has instigated this partnership.
The signing of the Memorandum of Understanding was done by the First Party, H. Suryo Alam, Chairman of the Indonesian Sugar Refiner Association, and the Second Party, Joost Sepang, Chairman of the “WENANG” Village Cooperative, and witnessed by Euis Saedah, Director General for Small and Medium Sized Industry, Ministry of Industry, and Sanny Parengkuan, Head Office of Province of Industry and Trade in North Sulawesi, Management and representatives of AGRI, as well as print and electronic media reporters, and other invitees.
As usual, at the end of the event, Suyono, Chairman of Small and Medium Sized Agro Industries, West Java, as the party who has already implemented partnership with the Indonesian Sugar Refiner Association, in a presentation, shared his experience of implementing such an MOU.
Suyono is grateful for the AGRI partnership because SMI in West Java produce a large variety of food and beverage products, such as dodol Garut (a kind of toffee), preserved fruit, and other specific food items from West Java, all requiring white sugar. The demand for white sugar for Garut Regency alone is almost 15 tons per day. He also stated that food SMI using white sugar depend on the quality of the sugar, which affects the quality of the end product. White sugar as the main ingredient has proven to produce quality food and beverages products, and the availability of this main ingredient will ensure SMI growth.
He also added that SMI’s rights to obtain white sugar and other main ingredients such as soybean, flour, glutinous rice and other raw material, should be protected.