2008-2009 DATA CONSULT. All rights reserved.
MARKET INTELLIGENCE REPORT ON

DEVELOPMENT OF FOOD CROP SEED INDUSTRY IN INDONESIA

April 2009

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Introduction


The country's production of rice in 2008 rose 4.76% to 60.28 million tons from 57.16 million tons in 2007 in dry unhulled rice (GKG).  The Central Bureau of Statistics (BPS) said  the production  in 2007  rose 4.96% from 55.4 million  tons in 2006. .

The continued increase in rice production in the past four years  is partly attributable to the wider use of  certified rice seeds by farmers as indicated by the increase in production of  certified  rice seeds  in the same period - from  117,000 tons in 2005 to   177,000 tons in  2008.

The production of certified  rice seeds has reach around 50% of the  country's rice seeds requirement  of around 360,000 tons per year for 12.66 million  hectares of rice-fields.

The growing demand for high quality seeds has encouraged  investment in rice seed breeding industry in the private sector. Investors have established companies to produce high quality seeds   and  existing producers  expand their production capacity. PT Sang Hyang Seri (SHS),  a state company operating in seed breeding industry  has built new production facility  with a production capacity of   10,000 tons of seed a year.

Interest has also been shown by foreign investors  such as  PT BISI Internasional, which is affiliated to  the Charoen Pokhpand group, PT DuPont Indonesia (Pioneer), PT. Syngenta Indonesia  and  PT Bayer Indonesia.

Rapid growth has also been recorded in the production high quality corn seeds. More farmers have grown hybrid corn seeds. Now farmers have used hybrid corn seeds in larger quantity than  conventional corn seeds.  The use of hybrid seeds in rice fields is relatively small. Hybrid rice seeds make up only 5% of the country's total requirement of high quality rice seeds.

Production of hybrid rice and corn seeds has been dominated by  a number of companies affiliated  to multinational agribusiness companies  like PT. Bisi Internasional, PT. Dupont Indonesia  and  PT Bayer Indonesia. A state company operating in seed breeding industry is PT. Sang Hyang Seri.

Regulation has also contributed to the rapid expansion of seed breeding industry  in the country. A regulation requires seed  importers to start producing  seeds  in the country after operating for two years.

The prospect of business in seed breeding industry is encouraging especially as the government has introduced  and sought to popularize the use of hybrid seeds   among the farmers.  High technology and large investment would be needed to produce hybrid seeds, therefore, it is expected that only large financially powerful companies  could develop  seed breeding industry.


Types of Rice seeds

Rice seeds are produced from the generative  breeding of rice plants . There are four classes of rice seeds of high yield variety  -- breeder seeds ( BS), foundation seeds (FS), stock seeds (SS),  and extension seeds (ES). The four types of seeds  are produced by  agencies or bodies named by  the National Seed Body  and they must have certificate.

The  seeds used by the farmers are generally the  extension seeds  which are the offspring of breeder seeds or foundation seeds which are well kept   that their identity ands pure bred  are maintained  to keep a certain quality standard.

Breeder seeds are ones that is the source of foundation seeds. Foundation seeds are the first offspring of breeder seeds . Stock seeds are the offspring of breeder seeds or  foundation seeds.

Each type of the seeds is given different label. BS is given a yellow label, FS a white label,  SS purple label  and SS a blue label. There is another  certified type with pink label which is the first offspring of ES, but  since 2007 it is no longer produced  on low productivity.


Major Seed Producers 

Certified high quality conventional seeds are produced mainly by state companies  or agencies PT Sang Hyang Seri and  PT Pertani. In addition, there are many small private producers already securing certificate from the agriculture ministry. Hybrid rice and corn seeds are generally produced by private companies in larger scale.  There are 18 producers of hybrid rice and corn seeds in the country , up from only two in 2005. Most of them are private companies  with only two state companies PT Sang Hyang Seri (SHS)  and  PT Pertani.

Private seed producing companies generally produce hybrid rice and corn seeds, and state companies produce hybrid and conventional high quality rice and corn seeds as well as other cereal seeds such as soybean, mung bean and groundnut seeds.

Since 2006, food crop seed breeding industry in Indonesia has continued to grow marked with the establishment a number of producing companies including foreign companies producing hybrid rice and corn seeds in large scale.  Among the producers is PT. Dupont Indonesia. PT. Triusaha Sari Tani, Bayer Indonesia, PT. Karya Niaga Beras Mandiri, PT. SourceAlam Sutera, and SHS. Some of the companies are affiliated to multinational companies such as DuPont (Pioneer), Monsanto, Bayer,etc. .

PT Sang Hyang Seri (SHS)

PT. Sang Hyang Seri (Persero)   established in  1971  on a government regulation No.22 Year 1971  with the status of  PERUM (Public Company) in  Sukamandi  Subang,  West Java.  In 1995, its status was changed into  limited company

SHS produce rice , corn, peanut  and vegetable seeds  with annual production capacity  of around 25,000 tons . It has  anew facility with an annual capacity to produce 10,000 tons of seeds  with the system of IRSPP (Integrated Rice Seed Processing Plant). The new production facility is integrated with wet and dry laboratory located in Sukamandi, Subang, and West Java coming on stream in 2008.

PT Sang Hyang Seri has established cooperation with  multinational seed producing companies  such as Shenzhen Boshi BioScience (BOSHIMA) Co. Ltd. (China)  and  Devgen (India)  to produce  hybrid rice seeds. The cooperation is to  reduce dependence on imports. Through the cooperation,  PT SHS will  have profit share of 50% in royalty  from seeds sales.

Under the  cooperation, an Indonesia-China  Hybrid Seed Center  was built in October, 2008  in Karawang.

SHS produces corn seeds of the composite type  in cooperation with domestic and  foreign partners . SHS also produces seeds of other food crops  including soybean seeds , mung bean  and groundnuts.

PT Bisi Internasional Tbk.

PT. Benih Inti Suburintani  Internasional (BISI)  was established in 1983  by  the Charoen Pokphand Group  and now it is a listed company . It produces seeds, pesticides  and distributes fertilizers.

The majority shares of the company are owned by the Jiaravanon family  and 23% stake is owned by Midsummer Limited.

Its seed production  facility is located in Kediri, East Java. Bisi  has three subsidiaries (1) PT Tanindo Intertraco, which operates  in the distribution and marketing of hybrid rice  and corn seeds, vegetable seeds,  and seeds of other food crops; (2) PT Multi Sarana Indotani  which produces pesticides  and (3) PT Tanindo Subur Prima which distributes and sells vegetable seeds  imported form Chia Thai Seed Co Ltd.

Bisi is a fast growing seed producer. In 2008, it expanded its production capacity for hybrid  corn seeds by building two new factories with total capacity of  40,000 tons per year  with an investment of Rp 276 billion.  The expansion  increased its production capacity for hybrid corn seeds  to 60,000 tons per year.

PT. DuPont Indonesia (Pioneer)

PT DuPont Indonesia  started operation in Indonesia in 1988. PT DuPont Indonesia is a subsidiary of Pioneer Hi-Bred  International, Inc., in Des Moines, Iowa, which was established in 1926 now a leading company in farm plant genetics with business units in 70 countries.

This company has sold  hybrid corn seeds  in Indonesia since  1988  using the brand of Pioneer. Dupont has released  23 types of hybrid corn seeds Indonesia, but only six of the varieties P7, P11, P12, P13, P21,  and  P23, now  still sold in the country .

Since 2007,  DuPont  has released  varieties of hybrid rice seeds Padi Pioner 1 (PP1)  and  PP2, which are bred  itself .

PT. DuPont Indonesia has established cooperation with BB Padi (Rice Plant Research Center ), which has been licensed to produce and sell hybrid rice seeds  called MARO. MARO hybrid  rice seeds  are hybrid seeds  developed  by Indonesian  researchers  of the BB Padi

PT. DuPont Indonesia  has seen the superiority of MARO hybrid rice  which has a  high  productivity  of 8.85 MT gkg / ha. The paddy seeds  are filled out. Apart from resistant to diseases  MARO  rice  food  is fragrant.


  • PT Bayer Indonesia, CropScience Business Group.

  • Production  of certified rice seeds  reaches 181,000 tons


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INDONESIAN COMMERCIAL NEWSLETTER (ICN)
RELATED TOPICS

ICN - April 2009


FOCUS:
AGRICULTURE BACK AGAIN AS ECONOMIC BACKBONE

INDUSTRY PROFILE:

PLANT SEEDLING CULTIVATION INDUSTRY
  • Backgrounds
  • Description of product
  • Seed Production Capacity
  • Production seeds increasing
  • Locations of seeds/shoots production centers
  • Main producers of seeds/shoots/seedlings
  • Availability of seeds until  2010
  • New investments
  • Seed requirement        
  • Distribution and Marketing
  • Exports and imports
  • Prices of seeds tend to be stable
  • Government Policy
  • Conclusion

INDUSTRY PROFILE:
DEVELOPMENT OF FOOD CROP SEED INDUSTRY


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