Gone Fishing: Indonesian Aquaculture

Indonesia, the fourth most populous country in the world is an archipelago nation spanning over 17,000 islands and with a coastline exceeding 81,000 kilometres. With abundant aquatic and freshwater resources, Indonesia aquaculture is strongly positioned to become a global leader in seafood production. Asian Insiders partner in Indonesia, Primadi Soerjosoemanto explores Indonesian aquaculture and its potential for growth and opportunity.

Global capture fisheries production has levelled off since the late 1990’s, at around 90 million tons per year, while global demand for seafood continues to soar, leading to many countries placing more emphasis on aquaculture, defined as the cultivation of aquatic organisms including fish, molluscs, crustaceans and aquatic plants. In 2010, Indonesian aquaculture production surpassed captured fish production and moving into 2024, aquaculture contributes over 70% of Indonesia’s total fishery production, with an annual average growth of around 16%. The country is now the second largest aquaculture producer worldwide, after China.

Fisheries experts have calculated that Indonesia has the globe’s largest aquaculture production potential. With an all-year warm climate in temperate waters, the country presently utilises only around 7.5% of its total area with potential for aquaculture. Further more than 80% of its fisheries enterprises are traditional and household operations, using minimal technology. However, this is rapidly changing as food investors and research organisations, supported by proactive government policies are starting to become intensely involved with Indonesian aquaculture.

279 million Indonesians each consume around 50 kilos of seafood anually. Furthermore, the global appetite for seafood shows no signs of waning, driven by factors like population growth, rising disposable incomes, and increasing health consciousness. Indonesia’s diverse and favourable ecosystem offers ideal conditions for a wide variety of aquaculture species, from freshwater fish like catfish and tilapia to marine species like shrimp and various forms of seaweed.

Indonesian aquaculture currently produces around 6 million tons of fish per year, with a market size of around USD 30 billion. In 2019, President Joko Widido in 2019 specifically pointed to aquaculture as an important sector for economic growth and social development, and this partly  due to the fact that most people involved in this sector were low-income people, often living on less than USD 100 per month. There has been a wholesale restructuring of regulation and government procedures across the country (as detailed in this article on Indonesia’s Omnibus laws) and this has made entrepreneurship and investment in Indonesia’s aquaculture easier. Further, Indonesian infrastructure and logistics are also going through considerable investment and improvement lately (see this story here) allowing fisheries to transport their wares far further afield.

The opportunities for growth and significant improvement in this sector is attracting a raft of local startups, many with international investors. These include Aruna, a supply chain aggregator in the marine and fisheries industry that operates across 31 provinces and has attracted USD 30 million in round A funding since 2022. Another celebrated operation is eFishery that has developed and supplied cloud-based feeding systems that delivers optimal amount of feed to fish and shrimp farms. The system collects data, manages harvests and shipping for streamlined production and shipping and has attracted USD 108 million in series D funding, taking it toa market valuation of USD 1.3 billion. In fact, more than 30 startups have joined Indonesia’s DigiFish Network, bringing innovation and improved business models to upgrade Indonesian aquaculture. This technical hub, starting in 2018 has a vision to become the leading “ecosystem of innovation and collaboration for marine and fisheries in Indonesia.” Members include those offering services for water treatment, IoT based devices, waste recycling, data management and various other technical and financial services.

As well as shrimp and a range of fish species, there is considerable attention also being paid to the cultivation and exporting of various forms of seaweed and other aquatic plants. Investments from Korea and Japan in these areas include product development for food, cosmetics and pharmaceutical uses.

There are some challenges remaining including resource management, sustainable production and protection from environmental degradation along with industry unique issues such as disease control, waste management, seed quality and cultivation technologies.

However, fundamentally Indonesia remains a bright investment profile with its enormous labour pool, growing middle class and vast wealth of resources including, as covered in this article, its potential to become the number one world supplier of farmed fish, shrimp and plants. Standard Chartered Bank predicts the total Indonesian economy to grow to over USD 10 trillion by 2030, from USD 4 trillion in 2020. Indonesian aquaculture will be a significant part of that future.

 The Indonesian aquaculture sector is facing strong growth as well as considerable international interest from food corporations and investors. For a no-obligation discussion about these opportunities, please get in touch with Jari Hietala, Managing Partner: jari.hietala(at)asianinsiders.com or Primadi Soerjosoemanto, Indonesia Partner: primadi.soerjosoemanto(at)asianinsiders.

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