Exporting chicken to Singapore will prep Indonesian businesses for more overseas expansion

Indonesia's Agriculture Minister Syahrul Yasin Limpo (right) inspecting chicken to be sent to Singapore. - The Straits Times/Asia News Network

JAKARTA (The Straits Times/Asia News Network): With Indonesia starting to export chicken to Singapore, its poultry companies must take steps to improve their operations and raise competitiveness, which will put them in good stead for expansion elsewhere.

Indonesian poultry exports have been limited to a few countries as producers focus mainly on the huge domestic market of more than 270 million people.

Besides Singapore, Indonesia also exports to countries including Japan, Timor-Leste, Papua New Guinea and Qatar.

But the world's fourth-most populous nation has faced an oversupply of chicken for several years.

Production is estimated to reach 3.8 billion chickens this year, while the demand is about 2.9 billion chickens, resulting in a surplus of about 900 million.

Faced with an annual production surplus, selling abroad is the way to go for poultry producers, experts and industry players told The Straits Times.

However, there are challenges including logistical issues, especially the export of live birds, the high price of chicken feed and strict requirements in destination countries.

For example, the major obstacle for Indonesian companies that plan to export live chicken to Singapore is the mode of transport, said Dr Bayu Krisnamurthi, chairman of Indonesian Agribusiness Association.

"Technically, they can send live chicken to Singapore by sea, but it is not as efficient as delivering them by land," he said, comparing Indonesia with Malaysia, where poultry producers can deliver supplies to Singapore by land - which is faster and cheaper.

Animal welfare issues can also arise from delivering live chickens via sea.

"The livestock are placed in a close and limited space in a vessel, and have to deal with waves and other situations at sea," he added.

Indonesian Poultry Breeder Association chairman Achmad Dawami said: "The chickens may experience dehydration and the risk of weight loss is also high. The risk of their deaths also increases during transport."

Experts and industry players say one solution is for poultry companies to run farms closer to Singapore, such as in Riau Islands and North Sumatra.

In addition, poultry farmers must improve standards in areas such as hygiene, and set up adequate infrastructure to support both production and distribution, according to Professor Arief Daryanto, development economics lecturer at the Bogor Agricultural University.

"On-farm and off-farm modernisation is a necessity. If they have chicken, but they don't have a cold chain system, it's impossible for them to export," he said.

"If they want to export to Singapore, our farms must adopt good agricultural practices as well as good handling practices."

Both Prof Arief and Achmad said the industry must also enhance its competitive edge, particularly by cutting production costs, 70% of which is made up of chicken feed.

"There should be advanced technology to make chicken feed cheaper. Some research, for instance, shows that palm oil by-products can be used," said Prof Arief.

Achmad pointed out that poultry producers should not depend largely on imported feed. Soyabean meal, for instance, can be replaced by other protein sources.

Going forward, the future of Indonesia's chicken exports to Singapore and other markets lies in processed chicken products, such as nuggets, sausages and satay.

"Our competitiveness depends on further processing. The processing industry must be expanded in Indonesia," Prof Arief said, adding that producers need to build an integrated supply chain with proper infrastructure such as refrigerated storage and distribution facilities.

Selling chicken to Singapore, which has stringent standards in areas such as food safety and animal health, will serve as a lesson for Indonesian companies eyeing greater overseas expansion.

"If our companies get used to exporting to Singapore, there will be no difficulty in exporting to other markets," he said.

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Indonesia , Singapore , chicken , export


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