BKPM
The Investment Coordinating Board Japan International Cooperation Agency
INVESTMENT OPPORTUNITIES STUDY FOR GORONTALO PROVINCE
Daun
FINAL REPORT February 2007
PT. Mitrapacific Consulindo International
PREFACE This report has been prepared based on the investment opportunity study of Gorontalo Province jointly conducted by JICA (Expert/Advisor to BKPM) and BKPM (Investment Coordinating Agency) in collaboration with PT. Mitrapacific Consulindo International. Under regional autonomy regime, it is regional governments (Province/Kabupaten/Kota) that should take the initiative in regional investment promotion activities. The aim of our study is, as part of our support for regional government’s such activities, to provide background information on the investment climate and opportunity based on objective study and analysis from investors’ perspective to regional governments so that they can make use of the information for making their investment related policies and having promotion activities. Besides that, our information is provided to potential investors both domestic and foreign as most investors don’t have sufficient and accurate information about regional areas. Sectors prioritized in our study are agriculture, plantation, forestry and fishery and their related processing industries, because such primary sector accounts for more than 40% of workforce in Indonesia, therefore the government’s efforts for poverty alleviation may not be successful if not empowering this primary sector. Besides that, we also focus on handicraft sector, the major players of which are SME and Micro businesses providing a great deal of job opportunity. If investors or buyers further turn to the sector, it will lead to invigoration of the sector, creation of employment and eventually reduction of the poverty. Taking the opportunity, we would like to express our heart-felt gratitude to all the people concerned of BKPM, and other relevant ministries, Dinas Perindustrian, Perdagangan dan Penanaman Modal Provinsi Gorontalo and other government institutions and business community in Gorontalo Province for rendering strong support and kind assistance to our study.
JICA Expert/Advisor to BKPM February, 2007
FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
TABLE of CONTENT Page PREFACE MAP OF STUDY LOCATION TABLE OF CONTENTS ...................................................................................................
i
LIST OF TABLES ............................................................................................................
iv
LIST OF FIGURES ..........................................................................................................
ix
LIST OF ATTACHMENT ..................................................................................................
xi
1. OVERVIEW OF PROVINCIAL ECONOMY .............................................................. 1 – 1 1.1
1.2
1.3
Geographical Condition ................................................................................... 1 – 1 1.1.1
Land Form and Geomorphology ....................................................... 1 – 2
1.1.2
Hydrology ......................................................................................... 1 – 3
1.1.3
Developed Area and Land Use ........................................................ 1 – 4
1.1.4
Economic Geoposition ..................................................................... 1 – 6
Economic Profiles ............................................................................................ 1 – 7 1.2.1
The Regional Income ....................................................................... 1 – 7
1.2.2
Sectoral Contribution ........................................................................ 1 – 9
Population......................................................................................................... 1 – 12 1.3.1
Population Number and Growth ....................................................... 1 – 12
1.3.2
Workforce and Distribution ............................................................... 1 – 13
1.3.3
Educational Background .................................................................. 1 – 14
1.4
Regional Minimum Wage (Upah Minimum Regional/ UMR) ............................ 1 – 15
1.5
Other Economic Indicators ............................................................................... 1 – 16 1.5.1
Export ............................................................................................... 1 – 16
1.5.2
Investment ........................................................................................ 1 – 16
1.5.3
Finance and Banking ........................................................................ 1 – 18
2. INFRASTRUCTURE CONDITION ............................................................................. 2 – 1 2.1
Land Transportation ......................................................................................... 2 – 1
2.2
Sea Transportation .......................................................................................... 2 – 6
2.3
Air Transportation ............................................................................................ 2 – 8
2.4
Electricity ......................................................................................................... 2 – 10
2.5
Water Supply ................................................................................................... 2 – 11
2.6
Telecommunication .......................................................................................... 2 – 12
2.7
Industrial Estate ............................................................................................... 2 – 13
3. CURRENT SITUATION and FUTURE PROSPECT of MAJOR SECTORS 3.1
Analysis of Major Sectors ................................................................................. .3 – 1
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
3.2
Agriculture......................................................................................................... . 3 - 2 3.2.1
General Performance of Agriculture .................................................. .3 – 2
3.2.2
Product Competitiveness .................................................................. . 3 - 5 Food Crops ....................................................................................... . 3 - 5 Horticulture........................................................................................ . 3 - 8 Plantation Sub Sector ....................................................................... . 3 - 8 Forestry Sub Sector .......................................................................... 3 - 11 Animal Husbandry (Livestock) Sub Sector ........................................ 3 - 13
3.2.3
Opportunity and Limitation of Agriculture Main Products .................. 3 -14 a. Corn .............................................................................................. 3 - 15 b. Coconut......................................................................................... 3 - 19 c. Cocoa ............................................................................................ 3 - 21 d. Arabica Coffee .............................................................................. 3 - 23 e. Mulberry/ Silk Culture .................................................................... 3 - 26 f. Jatropha ......................................................................................... 3 - 29 g. Super Teak.................................................................................... 3 - 30 h. Cows ............................................................................................. 3 - 31
3.3
Fishery Sub-sector............................................................................................ 3 -33 3.3.1
General Performance of Fishery and Marine Resources .................. 3 -33
3.3.2
Competitiveness of Fishery and Marine Resources .......................... 3 -35 Capture Fisheries.............................................................................. 3 - 35 Competitiveness of Culture Fisheries................................................ 3 - 37
3.3.3
Opportunities and Limitations in Fishery Commodities...................... 3 -39 a. Seaweed ....................................................................................... 3 - 39 b. Pearls ............................................................................................ 3 - 41 c. groupers ........................................................................................ 3 - 42
3.4
3.5
Tourism Sector ................................................................................................. 3 -44 3.4.1
General Performance of Tourism ...................................................... 3 -44
3.4.2
Product Competitiveness .................................................................. 3 -46
3.4.3
Opportunity and Limitations............................................................... 3 -48
Industrial Sector................................................................................................ 3 -50 3.5.1
General Performance of Industrial Sector ......................................... 3 -50
3.5.2
Competitiveness................................................................................ 3 -51
3.5.3
Opportunities and Limitations of Processing Industries..................... 3 -52 a. Coconut Fruit Processing .............................................................. 3 - 52 b. Coconut Wood .............................................................................. 3 - 54 c. Kerawang Embroidery ................................................................... 3 - 56
3.6
Energy Sector ................................................................................................... 3 - 59 3.6.1
General Performance of Mining and Energy Sector .......................... 3 - 59
3.6.2
Sector Competitiveness ................................................................... 3 - 59 Mining and Quarrying ........................................................................ 3 - 59
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Electricity........................................................................................... 3 - 61 3.6.3 3.7
Opportunities and Limitations ............................................................ 3 - 63
Summary of the Selection Analysis of Main Prospective Commodities of Gorontalo ......................................................................................................... 3 - 70
4. STRATEGIC AREA 4.1
4.2
Strategic Area as Production/Industry and Distribution Center ......................... . 4 - 4 4.1.1
Kota Gorontalo ................................................................................. . 4 - 4
4.1.2
Kabupaten Gorontalo ....................................................................... .4 – 5
Strategic Area for Production Centre ................................................................ .4 – 7 4.2.1
Kabupaten Boalemo ......................................................................... .4 – 7
4.2.2
Kabupaten Bone Bolango ................................................................ .4 – 8
4.2.3
Kabupaten Pohuwato ....................................................................... . 4 - 9
5. INVESMENT CLIMATE 5.1
Legal Aspect and Bureaucracy ......................................................................... . 5 - 1 5.1.1
Investment Licensing......................................................................... . 5 - 1
5.1.2
Taxation and Retribution .................................................................. . 5 - 3
5.1.3
Investment Incentives ....................................................................... . 5 - 4
5.2
Inter-Institutional Coordination Aspect .............................................................. . 5 - 7
5.3
Land Affairs and Land Aspects ......................................................................... . 5 - 8
5.4
Infrastructure Aspect......................................................................................... . 5 - 8
5.5
5.4.1
Transportation .................................................................................. . 5 - 8
5.4.2
Electricity Power................................................................................ . 5 - 9
5.4.3
Clean Water ...................................................................................... . 5 - 9
Labour Aspect................................................................................................... . 5 - 9 5.5.1
Wage and Productivity ...................................................................... . 5 - 9
5.5.2
Regulations on Labour ...................................................................... 5 - 10
5.6
Banking Aspect................................................................................................. 5 - 10
5.7
Security and Law Enforcement Aspects ........................................................... 5 - 10
5.8
Fishery Issues................................................................................................... 5 - 11
6. PROPOSAL OF PROSPECTIVE PROJECTS 6.1
Prospective Commodities/Projects in Gorontalo .............................................. . 6 - 1
6.2
Project Profile Kerawang Handcrafting Industry .............................................. . 6 - 3
6.3
Project Profile Beef Cattle Farming .................................................................. 6 - 10
6.4
Project Profile Seaweeds Culture .................................................................... 6 - 20
6.5
Project Profile Cacao Plantation and Beans Processing Unit .......................... 6 - 27
6.6
Project Profile Coffee Arabica Plantation ......................................................... 3 - 38
6.7
Project Profile Silkworm Farming and Mulberry ............................................... 3 -46
ATTACHMENT
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
LIST of TABLES Page Table 1.1
Slope Condition of Land in Gorontalo Province (Ha) ................................. 1 - 2
Table 1.2
Soil Types by National Soil Classification (Ha) .......................................... 1 - 2
Table 1.3
Rivers of Gorontalo Province..................................................................... 1 - 3
Table 1.4
Land-use Condition by Region and Usage in Gorontalo Province ............ 1 - 5
Table 1.5
Land Use by Area Function in Gorontalo Province .................................... 1 - 5
Table 1.6
Flow of goods in Gorontalo Seaport, 2001-2005 ....................................... 1 - 6
Table 1.7
GRDP and GRDP per Capita of Gorontalo Province and Indonesia based on 2000 Constant Price, 2001-2005 .............................................. 1 - 7
Table 1.8
GRDP of Gorontalo Province by Kabupaten/Kota based on 1993 Constant Price, 2003-2004 (Rp. Million and Annual Growth) .................... 1 - 8
Table 1.9
GRDP of Sulawesi Provinces based on 2000 Constant Price, 20012004 (Rp. Million and % Annual Growth) .................................................. 1 - 8
Table 1.10
GRDP per Capita of Sulawesi Provinces based on 2000 Constant Price, 2001-2004 (Rp. and % Annual Growth)........................................... 1 - 8
Table 1.11
Sectoral Contribution to GRDP (2001-2005) ............................................ 1 - 9
Table 1.12
GRDP of Gorontalo Province based on 2000 Constant Price by Sector, 2001-2005 (Rp. Million and Average Annual Growth) .................. 1-10
Table 1.13
Sectoral Contribution to GRDP by Kabupaten/Kota based on Constant Price (2002-2004) ...................................................................... 1-11
Table 1.14
Population of Gorontalo Province (2000-2004) ......................................... 1-12
Table 1.15
Population of Gorontalo Province (2000-2004).......................................... 1-13
Table 1.16
Population 10 years and Over by Education (2004) ................................. 1-14
Table 1.17
Regional Minimum Wage (Upah Minimum Regional /UMR) and Minimum Household Need (Kebutuhan Hidup Minimum / KHM) Province of Gorontalo and Other Provinces in Sulawesi and Java, 2004-2005 ................................................................................................. 1-15
Table 1.18
Export Commodities 2001-2005 .............................................................. 1-16
Table 1.19
Number and Value of PMA Projects (2003-2005)...................................... 1-17
Table 1.20
Number of Projects by Economic Sectors (US$) ....................................... 1-17
Table 1.21
Non-Facility Investment, 2003-2005 ......................................................... 1-18
Table 1.22
Bank Loan: Value, Types and Allocation, 2004-2005 ................................ 1-19
Table 2.1
Road Length and Surface Structure .......................................................... 2 - 1
Table 2.2
National Road Length and Condition ......................................................... 2 - 2
Table 2.3
Provincial Road Length and Condition ...................................................... 2 - 3
Table 2.4
Kabupaten Road Length and Surface Condition ...................................... 2 - 3
Table 2.5
Air Traffic Development at Djalaluddin Airport 1997 - 2006 ....................... 2 - 8
Table 2.6
Airlines, Aircraft Types and Schedule Operating at Jalaluddin Airport, Gorontalo (2006) ....................................................................................... 2 - 9
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Table 2.7
Electricity Condition of PLTD Telaga (kW) ................................................ 2-10
Table 2.8
Realization of Utilization/Sale of Electricity in Gorontalo Province............. 2-10
Table 3.1
Agriculture Contribution in GRDP............................................................ 3 - 2 Dominant Types and Physical Characteristic of Soil in Gorontalo Province .................................................................................................... 3 - 3 Annual Rainfall & Rain Catchment’s Area of Gorontalo Province (Ha) ...... 3 - 3
Table 3.2 Table 3.3
Table 3.12
Main Export Commodities in Agriculture (2005) ..................................... Harvest Area and Production of Main Food Crops, 2001-2005 ................ Production and Productivity of Main Commodities of Food Crops Gorontalo as Compared to National (2005) .............................................. Production and Productivity of Corn Gorontalo vs, Main Producers in Indonesia (2005)........................................................................................ Export Contribution of Corn to National Indonesia, 2001-2005 (Ton) ........ Production of Horticulture Main Commodities Gorontalo vs National (2004) ........................................................................................................ Productivity of 5 Main Plantation Commodities in Gorontalo Compared with Other Sulawesi Provinces, 2004/2005 ............................. Area and Production of 5 Main Plantation Commodities in Gorontalo Compared with Other Sulawesi Provinces and National, 2004/2005 ........ Contribution of Coconut Products in Gorontalo Export (US$)....................
Table 3.13
Forest Area and Utilization ...................................................................... 3-12
Table 3.14
HPH Holders in Gorontalo ....................................................................... 3-12 Forest Products in Gorontalo Province (m3), 2001-2005........................... 3-12 Forest Wood Production of Gorontalo Province and National (m3), 2001-2004 ................................................................................................ 3-13
Table 3.4 Table 3.5 Table 3.6 Table 3.7 Table 3.8 Table 3.9 Table 3.10 Table 3.11
Table 3.15 Table 3.16 Table 3.17 Tabel 3.18 Table 3.19 Table 3.20 Table 3.21 Table 3.22 Table 3.23 Table 3.24 Table 3.25 Table 3.26 Table 3.27 Table 3.28 Table 3.29
3-4 3-5 3-6 3-6 3-7 3-8 3-8 3-9 3-9
Population of Large Livestock (2001-2005) ............................................ 3-13 Cows Population of Gorontalo Province and Other Sulawesi Provinces (Head), 2001-2005 ................................................................... 3-14 Poultry Population in Gorontalo Province (2001-2005) ............................ 3-14 Development of Total Cultivation Area, Harvest Area, Productivity and Export of Corn (2001-2005) .............................................................. Development of Corn Import in Indonesia (1999-2004) ............................. Phases of Corn Production Program in Gorontalo 2006 – 2010 ................ Phases of Cultivation Area Expansion in Gorontalo 2006 – 2010 ............. Cultivation Area, Production and Productivity of Coconut in Gorontalo, 2005 ......................................................................................... Cocoa Plantation Area by Plant Condition in 2005 .................................... Production and Productivity of Cocoa in Gorontalo and Other Sulawesi Production Centers, 2005........................................................... Share of National Cocoa Export to National Agriculture Product Export (US$ million).................................................................................. Cultivation Area of Coffee Plantation in Gorontalo,, 2005.......................... Production and Productivity of Coffee Plantation in Gorontalo, 2005 ........
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3-15 3-15 3-17 3-17 3-19 3-21 3-21 3-22 3-23 3-24
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Table 3.30
Area (Ha) and Production (Ton) of Arabica Coffee in Main Producer Provinces in Indonesia............................................................................... 3-24
Table 3.31
Development of National Coffee Export in 2001 – 2005 ............................ 3-25
Table 3.32
Share of Coffee Export Value to Agriculture Products Export Value, Nationally (US$ Million) ............................................................................. 3-25
Table 3.33
Provinces as Silk Main Producer in Indonesia, 2002-2004 ....................... 3-26
Table 3.34
Silk Contribution in Export Value of Textile Products in 2001-2005 (USD)......................................................................................................... 3-28
Table 3.35
Trend of Area, Production and Productivity of Jatropha in Indonesia, 2001 – 2005 .............................................................................................. 3-29
Table 3.36
Population of Cow for Meat Stock in Gorontalo Province, 2001-2005 ...... 3-32
Table 3.37
Unbalancing of Cows Population Increasing and Utilizing in Gorontalo, 2002-2005 ............................................................................... 3-32
Table 3.38
Development of Fishery Contribution to GRDP of Agriculture Sector .. 3-33
Table 3.39
Fish Production in Gorontalo 2001-2005 (Ton) ..................................... 3-34
Table 3.40
Number of Capture Fish Ships in Gorontalo ........................................... 3-34
Table 3.41
Production of fish culture in Gorontalo .................................................... Potential and Utilization of Fishery Resources ......................................... Capture Fish Products by Fish Type in Gorontalo (2001 – 2005) .................. Capture Sea Fish Product in 2004 (Sulawesi Provinces and Indonesia) ........
Table 3.42 Table 3.43 Table 3.44 Table 3.45 Table 3.46
3-34 3-36 3-36 3-37
Area Size and Production of Culture Fishery in Gorontalo, 2005 .......... 3-38 Number of Culture Fishery Household in Gorontalo Province and Other Sulawesi Provinces, 2004 ............................................................... 3-38
Table 3.47
Seaweed Product Development in 10 main Province Producers (1999 – 2004) ........................................................................................... 3-39
Table 3.48
Development of Grouper Capture and Culture Products in Gorontalo (Ton) ........................................................................................ 3-42
Table 3.49
Development of Interinsular and Export for Groupers from Gorontalo .................................................................................................. Domestic and International Tourist Visit, 2002-2005 ................................ Number of International Tourists in Gorontalo, North Sulawesi, South Sulawesi and National Figure, 2005 ......................................................... Estimated Potential Number of International Tourists in North Sulawesi and South Sulawesi with Inclination to Gorontalo ......................
Table 3.50 Table 3.51 Table 3.52 Table 3.53 Table 3.54 Table 3.55
3-43 3-44 3-47 3-49
Investment in Processing Industry Sector in Gorontalo (as of December 2005)....................................................................................... 3-50 Number of Large and Medium Industries in Gorontalo, 2001-2004 .......... 3-51 Plantation Area, Production and Productivity of Coconut in Gorontalo, 2005 .......................................................................................................... 3-53
Table 3.56
Contribution of Coconut Export in Gorontalo .......................................... 3-53
Table 3.57
Potential of Coconut Wood Supply Area in Gorontalo by Plantation Condition (2005) ....................................................................................... 3-54
Table 3.58
Estimation of the Number of Ready-to-Cut Trees and Coconut Wood Stock in Gorontalo 2005 ............................................................... 3-55
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Table 3.59 Table 3.60 Table 3.61 Table 3.62 Table 3.63 Table 3.64 Table 3.65 Table 3.66 Table 3.67 Table 3.68 Table 3.69 Table 3.70 Table 3.71 Table 3.72 Table 3.73 Table 3.74 Table 4.1 Table 4.2 Table 5.1 Table 5.2 Table 6.2.1 Table 6.2.2 Table 6.2.3 Table 6.2.4 Table 6.2.5 Table 6.2.6 Table 6.2.7 Table 6.3.1 Table 6.3.2 Table 6.3.3
Plantation Area and the Number of Trees by Plantation Condition 2004-2005................................................................................................. Number of SME Business Units (Handicraft and Other Industries) in Gorontalo, 2006 ........................................................................................ Production Value of Handicraft Centers and Other SME Industries in Gorontalo, 2005 ........................................................................................ Number of Business Unit and Workers in Handicraft Industries in Gorontalo, 2006 .................................................................................... Export of Handcrafted Textile Products of Indonesia (x 1.000 USD), 1999-2004 ................................................................................................ Potential of Mining and Quarrying Materials in Gorontalo ......................... Mining Exploration and Exploitation in Gorontalo ..................................... Realization of Electricity Use in Gorontalo, 2003-2006 ............................. Electricity Condition of PT PLN Gorontalo (kW) ....................................... Electricity Production Development 1999 – 2003 (MWh) .......................... Electricity Consumption Development 1999 – 2003 (MWh) ...................... Electricity Consumption by Consumers and Region 2003 (GWh) ............. Projection of Electricity Need and Peak Load in Indonesia, 2007-2013..... Electricity Generation Capacity by Type of Generator and Region 2003 .......................................................................................................... Electricity Production by Generator Type and Region 2003 ..................... Analysis of Prospective Commodities/Industries to be Developed in Gorontalo .................................................................................................. Shipping Activity of Gorontalo Seaport (2001-2005) ................................. Flow of goods in Gorontalo Seaport ......................................................... Business Sectors in Particular Regions Enjoy the Income Tax Incentive based on PP No. 1 Year 2007 ................................................... Strategic Commodities Enjoy the VAT Eradication Incentives Based on PP No. 7 Year 2007.............................................................................. Number of SME Business Units (Handicraft and Other Industries) in Gorontalo, 2006 ......................................................................................... Production Value of Handicraft Centers and Other SME Industries in Gorontalo, 2005 ........................................................................................ Number of Business Unit and Workers in Handicraft Industries in Gorontalo, 2006 .................................................................................... Production Capacity and Productivity of SME Handicraft Centers in Gorontalo, 2005 .................................................................................... Distribution of Kerawang Production Centers in Gorontalo, 2006 ............. Total Product Value and Contribution of Kerawang Handicraft in Gorontalo, 2005 .................................................................................... Export of Handcrafted Textile Products of Indonesia (x 1.000 USD), 1999-2004 ................................................................................................ Population of Cow for Meat Stock in Gorontalo Province, 2001-2005 ....... Beef Cattle Population by Province, 2002 – 2006 .................................... Beef Production by Province (Ton), 2002 – 2006 .....................................
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3-55 3-57 3-57 3-58 3-59 3-60 3-61 3-61 3-62 3-63 3-64 3-64 3-64 3-65 3-66 3-70 4-2 4-2 5-5 5-6 6-4 6-4 6-5 6-5 6-6 6-7 6-8 6-11 6-11 6-13
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Table 6.3.4 Population of Cow for Meat Stock in Gorontalo, 2002-2005 ..................... 6-15 Table 6.3.5 Meat Consumption by Province (Ton), 2002 – 2006 ................................. 6-15 Table 6.3.6 List of Countries and Number of BSE Incidents (2001-2006) ....................... Table 6.4.1
6-18
Areas for National Seaweed Culture in 2004 (ha) .................................... 6-22
Table 6.4.2 Seaweed Product Development in 10 main Province Producers (Ton), 1999 – 2004 ................................................................................... 6-22 Table 6.4.3 Development of Seaweed Export by Main Destination Country 1999 – 2004 (Ton) ................................................................................................ 6-24 Table 6.5.1 Production and Productivity of Cocoa in Gorontalo and Other Sulawesi Production Centers, 2005 .......................................................... 6-29 Table 6.5.2 Cocoa Plantation Area by Plant Condition in 2005 ................................... 6-29 Table 6.5.3 Cacao Plantation in Indonesia, 2004 ........................................................ 6-29 Table 6.5.4
Indonesia Production of Cacao beans Compare to processed Cacao ...... 6-30
Table 6.5.5 Producers of Cocoa Processing Products in Indonesia ............................ 6-31 Table 6.5.6 Cocoa Seed and Seedling Production Centers in Indonesia .................... 6-31 Table 6.5.7 Production, Export and Import of National Primary Cacao 2000 - 2005 .... 6-33 Table 6.5.8 Table 6.5.9 Table 6.5.10 Table 6.5.11 Table 6.6.1 Table 6.6.2 Table 6.6.3 Table 6.6.4 Table 6.6.5 Table 6.6.6 Table 6.6.7 Table 6.6.8 Table 6.6.9 Table 6.7.1 Table 6.7.2 Table 6.7.3 Table 6.7.4 Table 6.7.5 Table 6.7.6
Indonesia's Export of Cacao, 2003 – 2004 .......................................... Share Export of Cocoa to Export of Agriculture Products (USD million), 2001-2005 ................................................................................... Consumption/Grindings of Cocoa Beans (thousand tones) ...................... Supply and Demand Balance to 2010 Assuming Demand Growth of 4.5 % Annum ("000mt) ............................................................................. Area (Ha) and Production (Ton) of Arabica Coffee in Main Producer Provinces in Indonesia, 2003-2005 ........................................................... Cultivation Area of Coffee Plantation in Gorontalo,, 2005 ......................... Production and Productivity of Coffee Plantation in Gorontalo, 2005 ....... Indonesia vs Vietnam Exported Coffee, 1996-2004 (in 60 kilo bags) ....... Per Capita Consumption in Europe, USA, Japan and Indonesia, (Kg/Capita/Year) ....................................................................................... World Price of Robusta and Arabica Coffee (in US cent/lb) ...................... Productions, Export, and Consumption of Indonesia Coffee .................... Development of National Coffee Export in 2001 – 2005 ........................... Share of Coffee Export Value to Agriculture Products Export Value, Nationally (US$ Million) ............................................................................ Cultivation Area of Mulberry for Silk Culture in Indonesia, 2000 – 2004 (Ha) .................................................................................................. Production of Silk Yarn in Indonesia 2000 – 2004 (Metric Ton) ................ Silk Yarns Production in Comparison by Exporter Country in 2000 – 2004 (Metric Ton) ..................................................................................... Silk Yarns Export in Comparison by Country in 2000 – 2004 (Metric Ton) .......................................................................................................... Silk Import-growth in Major Countries 2001-2004 (Metric Ton) ................ Export Value and Volume of Silk and Silk Yarns in Indonesia 2000 – 2005 ..........................................................................................................
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6-34 6-34 6-35 6-35 6-39 6-39 6-40 6-41 6-41 6-42 6-42 6-43 6-44 6-47 6-48 6-49 6-49 6-50 6-51
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LIST of FIGURES Page Fgr. 1.1
Map of Gorontalo Province Area.................................................................
1-1
Fgr. 1.2
Workforce Distribution ................................................................................
1 - 13
Fgr. 1.3
Population by Education Background (2004)..............................................
1 - 15
Fgr. 2.1
Map of Land Transportation in Gorontalo Province ....................................
2-4
Fgr. 2.2
Map of Basic Infrastructure in Gorontalo Province .....................................
2 - 14
Fgr. 3.1
Corn Export Trend of Gorontalo, 2001-2005 (Ton) .....................................
3-7
Fgr. 3.2
Realization of Coconut Products Export in Gorontalo, 2001-2005 (Ton), ...
3 - 10
Fgr. 3.3
Development of imported corn price in Indonesia (1999 – 2004)................
3 - 16
Fgr. 3.4
Estimation of Corn Export Volume from Gorontalo 2007 – 2010 ................
3 - 18
Fgr. 3.5
Export Value Trend of Indonesian Silk........................................................
3 - 27
Fgr. 3.6
Silk Yarn Production Trend in Indonesia in Indonesia 1992-2004 ..............
3 - 27
Fgr. 3.7
Export Contribution of Fishery to Agriculture Products (2005) ...................
3 - 35
Fgr. 3.8
Development Trend in Domestic Consumption of Seaweeds ................
3 - 40
Fgr. 3.9
Development Trend of Seaweeds Export Volume in Indonesia .............
3 - 40
Fgr. 3.10
Number of Tourist trend to Gorontalo 2002 – 2005 ...................................
3 - 45
Fgr. 3.11
Trend of Tourists’ Visit by Country Origin to Gorontalo 2004-2005.............
3 - 45
Fgr. 3.12
Length of Stay and Number of Hotels in Gorontalo 2002-2005 .................
3 - 46
Fgr. 3.13
Installed Capacity of Electricity Generators of PT. PLN (MW) ....................
3 - 62
Fgr. 3.14
Installed Electricity Generators by Source of Energy of PT. PLN in 2004 (MW) .................................................................................................
3 - 63
Fgr. 3.15
Map of Spreading of Gorontalo’s Main Commodities..................................
3 - 68
Fgr. 3.16
Map of Gorontalo’s Tourism Objects .........................................................
3 - 69
Fgr. 4.1
Map of Gorontalo Economic Linkage ........................................................
4-3
Fgr. 6.2.1 Production Value per Production Unit (Rp./ Piece) of Kerawang and Other Handicraft Products, 2005 ...............................................................
6-8
Fgr. 6.3.1 Development Trend of National Beef Cattle Population (Million Heads), 1995 – 2006 ...............................................................................................
6 - 12
Fgr. 6.3.2 National Meat Consumption Trend 2001-2006 (x 1,000 Ton) .....................
6 - 16
Fgr. 6.3.3 Estimated National Meat Consumption 2010-2020 (x 1,000 Ton) .............
6 - 17
Fgr. 6.4.1 Development Trend in Domestic Consumption of Seaweeds ....................
6 - 23
Fgr. 6.4.2 Development Trend of Seaweeds Export Volume in Indonesia ............ 6 - 24
Fgr. 6.4.3 Development of Production, Export and Domestic Consumption of Seaweeds, 1999 – 2004 (Ton) ...................................................................
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Fgr. 6.5.1 Cocoa Processing Industry Flow Chart.......................................................
6 - 28
Fgr. 6.5.2 Trend of Cocoa Beans Price in Market of London and New York, ICCO Daily Price of Cocoa Beans and Stocks-to-grindings Rate 2000 – 2005 ....
6 - 33
Fgr. 6.6.1 World Arabica and Robusta Coffee Price (US Cent per lb) .......................
6 - 43
Fgr. 6.7.1 Estimated Trend of World Import Market to 2010 .......................................
6 - 51
Fgr. 6.7.2 Industrial Flow Chart of Silk in Indonesia....................................................
6 - 52
Fgr. 6.7.3 Development Trend of Silk Export Price in Indonesia (USD/Kg), 2000 2005............................................................................................................ 6 – 52
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
LIST of ATTACHMENT Page Attachment 1.
Work Approach for Investment Opportunities Study in Gorontalo Province ......................................................................................... Att.1 -1
Attachment 2. List of Government Institution and Local Association; Name and Address in Gorontalo Province ....................................................... Att.2 -1 Attachment 3.
List of Private Companies; Name and Address in Gorontalo Province ......................................................................................... Att.3 -1
Attachment 4.
List Non Metal Mining Products Potency in Gorontalo Province .... Att.4 -1
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1 OVERVIEW OF PROVINCIAL ECONOMY GORONTALO PROVINCE
FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
1. OVERVIEW OF PROVINCIAL ECONOMY
1.1 Geographical Condition Gorontalo is one of the youngest provinces of Indonesia. Officially established as a new province in 16 February 2001, previously Gorontalo area (covering Kota Gorontalo, Kabupaten Gorontalo and Kabupaten Boalemo) was a part of North Sulawesi Province. It is located between 00o30’04” – 01°02’30” North Latitude (NL) and 112°08’04” – 123°32’09” East Longitude, with a total area of 12,215.44 With the total area of 12,215.44 km2, currently the province consists of 1 (one) kota and 4 (four) kabupatens, namely: Kota Gorontalo (the capital city, with a total area of 64.79 km2 or 0.53%); Kabupaten Gorontalo (total area of 3,426.96 km2 or 28.06%); Kabupaten Boalemo (total area 2,248.24 km2 or 18.41%); Kabupaten Bone Bolango (total area 1,984.40 km2 or 16.26%); and Kabupaten Pohuwato (total area 4,490.71 km2 or 36.76%).
-
Further administrative area change of Kabupaten Gorontalo, which is a new kabupaten establishment in the north, is under process currently. Figure 1.1 Map of Gorontalo Province Area 121 30' E
N
0
3
6
12
122 00' E
122 30' E
123 00' E
123 30' E
18 km
S
P.Tolinggula
CENTRAL SULAWESI PROVINCE
PEG
G UNUN
AN
PA
w
e
s
i
S e a
P.Maa P.Duyanumo
P.Motua P.Lahu
Tg.Dunu
P.Lampu P.Lamasi
G.Pomonto
G.Pentolo
G.Buhu
a
Tg.Keramat Tl.Bolombo
Bulonlio
H LELE
G.Libodongu
l
Tg.Babi
Tg.Pasirputih
Tolinggula
01 00' N
u
G.Bubalango
G.Nabe
Tg.Labuandolong Tg.Molu
P.Motinggolo P.Dudepo
To Baroko
Alinggola
P.Ponelo Teluk Kwandang
Ds.Popaki
G.Balaloupa
G.Palajuli
Moluo
G.Datanu G.Lowulowu
NORTH SULAWESI PROVINCE
G.Molalahu G.Oliboe
Kabupaten Gorontalo
G.Batutiga G.Palualo G.Moutong
Kabupaten Pohuwato
Pegunungan Bapi
Kabupaten Boalemo Sidomulyo
Pancakarsa I
G.Pandet
To
00 30' N
G.Marisa
Lembo
G.Panu
G.Padang G.Timbuale
Tirisora
P.Paniki
Randangan
P.Tarolaya
LEGEND :
P.Sangi
Suka Meladu
P.Puntu Dao
Pentadu
Tabula
Labutan Timur
Bolumato
Tj.Ombula
Tj.Panjang
G.Olaola
Ds.Ulapoloa
PEGUNU NGAN
PERAN
TANAA N
Ayula Selatan
Bulila D.Limboto Payunga Tomulobulso
G.Tatuwoto
Duruma Selatan Manggodila Olihuta Blamu
Kayubulan P.Limba
G.Molintogupo
Kabupaten Bone Bolango
G.Tapambundu
SUWAMA G.Lantadutomula
Tj.Wolibadu
P.Montuli
P.Lahe
Ds.Pona
LIMBOTO
GORONTALO
Bubaa
P.Kambing
P.Mahuparbodaa
Tj.Boloaliyo P.Pomohadoa
P.Popayatobesar
Dulamayo
TILAMUTA
MARISA
P.Lamuadae P.Pasiglogo
P.Manuangi
Capital of Province Capital of District Capital of Sub-District River Mount Provincial Boundary Kabupaten Boundary Arterial Road Collector Road
Lamu Pulubala
Mulombulahe
G.Oyile
G.Langge
Moholahu Mo uto ng
Bonggo
G.Tilempede
G.Lomali
Tj.Olinlata
G.Ledaleda
Teluk Gorontalo
G.Tanewa
Oluhuta Bilungala
P.Bitha
G.Imani
G.Balobolanga
To Molibag
u
Tl.Tahidaa
Other Road Airport Harbor
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
1.1.1
Land Form and Geomorphology
The province area, which is the central part of the north peninsula of Sulawesi Island, is lying from west to east direction. The physical feature of the province is predominated by hilly areas with different elevations. The highest elevation is 2,060 ASL (Above Sea Level). The land coverage between the north coast (Sulawesi Sea) and the south coast (Tomini Bay) is relatively narrow, with the range of about 30-45 km. Meanwhile, the length north and the south coastlines are 320 km and 270 km, respectively. The plain area is somewhat limited, since most parts of the land (about 52%) are with the slope of 25% or more, which are generally not suitable for agriculture and plantation in the need of intensive land cultivation system. Land suitable for such cultivation system, with the slope of 0-15%, is only about 30% of the total area. Table 1.1 Slope Condition of Land in Gorontalo Province (Ha) Kab,/Kota
0-2%
2 - 15 %
15 - 25 %
25 - 40 %
> 40 %
Pohuwato
106,669
19,540
78,214
103,657
Boalemo
61,149
20,542
26,496
37,828
Gorontalo
89,334
24,127
75,901
80,359
Bone Bolango
19,187
2,615
28,982
25,713
Kota Gorontalo
6,160
-
-
-
282,499
66,824
209,593
23.73
5.61
17.60
Gorontalo Province %
RCA
116,671
Total
1,299
426,050
26,743
612
173,370
124,005
3,934
397,660
110,803
-
187,300
-
-
6,160
247,557
378,222
5,845
1,190,540
20.79
31.77
0.49
Source: Kantor BPN Provinsi Gorontalo RCA: River Catchment Area
The dominant soil type is Kambisol Haplik and Mediteran red yellow (more than 80%), indicating that no constraint for cultivation activity, provided that water is available. However, since the land with the slope of >15% is more than 70%, potential erosion can be crucial limitation to agriculture, and therefore terrace system needs to be developed. Table 1.2 Soil Types by National Soil Classification (Ha) Soil Type by National Soil Classification 1983
Pohuwato Boalemo Gorontalo
Bone Bolango
Kota Gorontalo
Total
%
Association of Grumusol & Cambisol Haplic (dry season)
-
8.126
39.120
5.734
2.118
65.098
5,47
Association of Cambisol Akuic, Aluvial Akuic, Organosol Henic, Cambisol Dystrit
-
-
2.405
-
-
2.405
0,20
Association of Cambisol Akuic, Aluvial Akuic, Organosol Henic
-
-
5.809
1.949
1.337
9.095
0,76
Association of Cambisol Haplic & Litosol or Arenosol
7.793
19.371
8.386
6.067
-
41.617
3,50
Association of Cambisol Haplik & Mediteran Red Yellow
328.195
127.675
326.349
173.550
2.705
958.474
80,51
Association of Podzolik Red Yellow & Cambisol Dystrik (acid)
6.118
-
-
-
-
6.118
0,51
Association of Renzina Brown Forest & Mediteran Red Yellow
-
-
1.066
-
-
1.066
0,09
52.872
1.675
6.904
-
-
61.451
5,16
Gleysol & Sulfate (acid)
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Soil Type by National Soil Classification 1983
Pohuwato Boalemo Gorontalo
Bone Bolango
Kota Gorontalo
Total
%
Gromusol (dry season)
21.170
-
3.687
-
-
24.857
2,09
Cambisol Dystrik (acid)
3.338
5.917
-
-
-
9.255
0,78
Kambisol Eutric (non acid))
5.265
-
-
-
-
5.265
0,44
-
-
3.465
-
-
3.465
0,29 0,20
Limboto Lake River Total
1.299
612
469
-
-
2.380
26.050
173.376
397.660
187.300
6.160
1.190.546
Source: Kantor BPN Provinsi Gorontalo
1.1.2
Hydrology
Gorontalo Province covers 4 (four) river catchment’s areas (Daerah Aliran Sungai / DAS), namely: - DAS Bone Bolango, covers most of Kabupaten Bone Bolango and Kota Gorontalo
areas, and small portion of Kabupaten Gorontalo. - DAS Paguyaman, covers part of Kabupaten Gorontalo and most of Kabupaten
Boalemo. - DAS Randangan, covers most of Kabupaten Pohuwato - DAS Popayato, covers part of Kabupaten Pohuwato.
Several rivers run through the province area. Most of the rivers, particularly small ones are waterless during the dry season, except 3 (three) larger rivers where water is still available although with limited discharge. The three rivers are: •
Bone River system, consists of two branches: ° East branch runs through Kabupaten Bone Bolango, Kabupaten Gorontalo and Kota Gorontalo; ° North branch runs from the northern part of Kabupaten Gorontalo taking the south direction and enters Kota Gorontalo, where it merges with the east branch. ° Bone River ends to Tomini Bay at the location of Gorontalo Harbor.
•
Paguyaman River runs through almost the whole of the east part of Kabupaten Boalemo; and
•
Randangan River in Kabupaten Pohuwato. Table 1.3 Rivers of Gorontalo Province Kabupaten/ Kota
Kabupaten Pohuwato
Length (km)
River Popaya (includes Duo and Durian)
55
Lemito (includes Mopoluwa and Lilodau)
45
Randangan (includes Malango, Taludito, Wanggahu, and Buhu)
165
Paleleh,
Marisa
Catchment Area Popayato
Randangan
45
Paguyaman (includes Nantu, Potanga, Molitulo, and Lehumbi)
Kabupaten Gorontalo
Dilahito,
Small / medium Small / medium Large Medium
Dudewulo, Huyula, Buntulia, Libato etc. Kabupaten Boalemo
Category
Small 150
Paguyaman
Large
Badihe
40
-
Small / medium
Polangga
35
-
Small / medium
-
Small / medium
Limu, Bango, Dilaniyaho, and Buliyo (end to Paguyaman River)
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Kabupaten/ Kota
Length (km)
River Intana, Bintana, Tigoso, Motahango, etc. Bone (includes Bone Bolango, Banggulu, Buano, etc.)
Kabupaten Bone Bolango
Bilungala, Tombulilato, Tiluda, etc.
Kota Gorontalo
Bone (end of Bone River in Kab. Bone Bolango)
155
Catchment Area
Category
-
Small
Bone Bolango
Besar
-
Small Besar
Source: MCI (processed from various sorces), 2006
The rivers are utilized mainly for irrigation and household water source. The river is very limitedly used for transportation, since inland transportation is managed solely through road network. More developed irrigation system has been already in service since long in the transmigration area of Kabupaten Boalemo, i.e. in Kecamatan Paguyaman and Kecamatan Wonosari, Further Paguyaman River irrigation, clean water supply and hydro electrical power development plan is underway now at the north part of the river. Danau Limboto dan ratusan jarring apung/karamba
Beside the rivers, a large lake namely Danau Limboto, is located near the capital city of Kabupaten Gorontalo. The lake is used for water supply and fishery culture. Hundreds of fish farmers develop fish growing culture in floating nets there, where various inland fishes such as ikan mas, tawes, gurami, mujair and nila are
grown. The beautiful lake, however, is suffering from severe sedimentation. The original lake area which was about 7,000 ha with average depth of 14 m in 1934 has been decreasing sharply to only about 3,414 ha and depth 1.8 m in 2000. Inappropriate management of forest resources had led to extensive exploitation of land for settlements and seasonal crops cultivation in upstream areas, which mostly are with 25% slope or more. This had resulted in deforestation and increased erosion in rainy seasons. Consequently such situation would affect higher run-off and increased peak flow, and further often cause flood to Bone River and sedimentation in reservoir area in Limboto Lake. The situation had been the deep concern of the governments (central, province and kabupaten), as well as of other parties. In 1994, a Master Plan Study for Flood Control of Rivers in Limboto-Bone Area was carried out by Ditjen Pengairan Departemen PU JICA, one of the parties concern, also undertook a special assessment for the revitalization of the lake. The assessment recommended that construction of water channel connecting the lake with Bone River (about 3-4 km long) should be constructed. The channel is intended to regain the discharge capacity of the lake, and also for the flood protection system for the Bone River Catchment Area. The difficulty in land acquisition for channel construction has hindered the plan from realization.
1.1.3
Developed Area and Land Use
The developed area utilized for various uses (settlements, industries, commercials, agriculture, plantation etc.) was about 23.44% of the total province land area in 2003, which increased to more than 25% in 2005. This land utilization rate had not exceeded the portion of land use for other uses, which had reached about 32.35%, and conversion forest about 2% of the total area. The remaining land available was only about 120,000 ha.
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Table 1.4 Kab./Kota
Land-use Condition by Region and Usage in Gorontalo Province
Settlement
Pohuwato
1,609
Boalemo
2,081
Gorontalo
5,074
Bone Bolango
1,074
Kota Gorontalo Total
Pohuwato
Sawah 1x Cultivation
2,438
Non Paddy Agric. Land
Mixed Agric. Land
Open Space
Plantation
-
26,184
2,955
-
34,055
-
18,276
-
28,106
5,311
69,852
14,284
16,615
578
5,336
-
5,336
-
14,373
54
1,723
1,114
7
280
20
1,215
1
11,561
39,949
5,318
135,707
14,304
71,912
633
0,97
3,36
0,45
11,41
1,20
6,05
0,05
%
Kab./Kota
Sawah 2x Cultivation
Swampy Area
Grasses
1,580
91
Bushes
Rain Forest
364
357,708
-
Dense Forest 7,040
21,433
Homogen Forest
-
Lakes
Total
6,752
1,299
426,498
Boalemo
-
470
2,465
103,965
7,920
520
612
173,319
Gorontalo
-
4,599
56,991
167,244
21,942
3,037
469
394,102
Bone Bolango
-
-
30,968
107,753
24,405
-
-
189,299
Kota Gorontalo
5
-
288
20
1,484
-
-
6,157
1,585
5,160
91,076
736,690
62,791
10,309
2,380
1,189,375
0,13
0,43
7,66
61,94
5,28
0,87
0,20
Cnvrs (32.170)
Total %
Source: Badan Pertanahan Nasional (BPN) Gorontalo
Land use in Gorontalo Province has been stipulated that protected forest area is about 29.17%, and the remaining (70.83%) is for cultured area. Of the cultured area, 36.48% is allocated for production forest which should be managed and utilized complying with forest function. Table 1.5 Land Use by Area Function in Gorontalo Province No.
Area Function
Area (Ha)
%
1
Other Uses
395,167
32.35
2
Natural Reserve
47,309
3.87
3
Protected Forest
164,400
13.46
4
Constant Production Forest
92,190
7.55
353,400
28.93
5
Limited Production Forest
6
Conversion Forest
24,480
2.00
7
Wildlife Reserve
34,599
2.84
8
National Park Total
110,000
9.00
1,221,545
100.00
Source: Dinas Kehutanan dan Perkebunan Provinsi Gorontalo (BPKH Wil. IV)
Seen from the magnitude of the current land utilization and land use condition, Gorontalo Province is unlikely having the appropriate land stock for investment. Additional to that, available land with 0-15% slope is only about 30% of the total area has resulted in more limitation to the effort of utilizing land for business activities in Gorontalo.
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However, through optimization of ‘Other Uses’ area and efficient management of the available cultured forest area, there are opportunities for opening of various forest as well as non-forest businesses.
1.1.4
Economic Geoposition
Judged from its geographical position, Gorontalo Province is relatively closer and more accessible to East Asia regions (China, Korea, Vietnam and Japan) and Asean (Malaysia, Brunei and the Philippines) than to other parts of Indonesia, particularly to more densely populated regions (Java and Sumatra). It is therefore that Gorontalo needs to take benefit of this potentiality through focusing of its trade policy more to the East Asian and Asean countries, rather than to Java and Sumatra. The regional economic potential of the northern part of East Indonesia (Gorontalo, North Sulawesi, Maluku and Papua) is relatively strong, but so far the economic activity of the area has not been optimally developed. The small population of Gorontalo, and also is the population to total area size ratio, makes the province potential for local consumption market is weak. Such geo position opportunity had been recognized and then utilized to establish Gorontalo as corn-based Agropolitan in the future, as shown from the ‘tiger spring’ performance of corn export in 2005, which was about 36,000 ton, as compared to only 18,000 ton in 2003 and 12,000 ton in 2004. To obtain the more attractive regional trade balance, it is necessary for Gorontalo and its neighbor North Sulawesi to synergistically develop their role as the hub for their regional areas, i.e. Central Sulawesi, North Maluku, West Papua and Irian Jaya provinces. Through such effort, it is expected that export load volume can be appropriately balanced by the unload volume of local and regional consumption goods. Information on loading and unloading of Gorontalo Seaport from 2001-2005 shows that for foreign trade, the import volume was generally smaller than the export volume. Meanwhile, in domestic trade the loading volume within the same period was smaller than the volume of unloaded goods. See Table 1.6 for detail. Table 1.6 Flow of goods in Gorontalo Seaport, 2001-2005 No.
Description
Unit
2001
2002
2003
2004
2005
A
Foreign Trade
1
Import
T/M3
1,550
2,850
-
-
-
T/M3
6,402
6,830
18,850
11,947
40,960
151,898
124,350
334,444
333,948
334,657
2
Export
B
Domestic Trade
1
Unload
T/M3
2
Load
T/M3
59,540
42,830
107,376
87,312
137,835
Total Import+Unload (A1 + B1)
T/M3
153,448
127,200
334,444
333,948
334,657
Total (Export+Load) (A2 + B2)
T/M3
65,942
49,660
126,226
99,259
178,795
Source: Pelindo Gorontalo
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1.2. Economic Profiles 1.2.1
The Regional Income
A. Within the Province Area The Province The province GRDP based on 1993 constant price in 2005 was Rp.2,025.3 billion or 0.13% of the national figure. It was averagely 7.58% increase from 2001, which was Rp. 1,554.1 billion. The province GRDP annual increase represented higher if compared to the national figure (6.02%). The per capita GRDP was also increasing in the average annual rate of 6.62% since 2001 (Rp. 1.836 million) to Rp. 2.323 million in 2005. It was also higher than the national average annual increase (4.57%). See Table 1.7 for detail. Table 1.7 GRDP and GRDP per Capita of Gorontalo Province and Indonesia based on 2000 Constant Price, 2001-2005 Item
2001
2002
2003
2004
2005
Annual Growth (%)
GRDP (Rp. Million) Province Gorontalo National
1,554,100
1,653,845
1,767,375
1,889,845
2,025,323
7.58
1,280,638,841
1,345,814,249
1,423,865,995
1,511,756,777
NA
6.02
GRDP per Capita (Rp.) Province Gorontalo
1,836,151
1,924,389
1,996,765
2,106,146
2,322,618
6.62
National
6,144,015
6,376,363
6,662,225
6,985,450
NA
4.57
Source: Statistical Yearbook of Indonesia 2005/2006, BPS
The Kabupaten / Kota As a new province, Gorontalo is in its way to manage its administrative area. New kabupatens were established in 2004, i.e. Pohuwato (separated from Kabupaten Boalemo) and Bone Bolango (separated from Kabupaten Gorontalo). Another kabupaten, a northern part of Kabupaten Gorontalo is now underway of its establishment. Economic condition of the administrative regions in the province area in 2003-2004 based on GRDP at Constant 1993 Price is shown in the table below: Kota Gorontalo was the highest contributor to the province GRDP, which was 40.12 % in 2003 but reduced to 34.22% in 2004. Kabupaten Gorontalo and Kabupaten Bone Bolango (was part of Kabupaten Gorontalo previously) were also large contributors to the province GRDP. The difference was, Kabupaten Gorontalo’s contribution to the province GRDP slightly increased from 9.69% in 2003 to 9.99% in 2004. Kabupaten Bone Bolango, adversely, decreased from 25.19% in 2003 to 21.58% in 2004. Kabupaten Boalemo and Kabupaten Pohuwato, the western regions of the province, presented a somewhat stable contribution to the province GRDP (slightly below 7% for Boalemo and slightly below 10% for Pohuwato).
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In annual GRDP growth, the total province showed a 28.94% rate, with Kabupaten Gorontalo was significantly the highest (94.65%), while Kota Gorontalo was the lowest (9.98%). Generally, though, all the regions presented very positive growth during the 2 years period. Table 1.8 GRDP of Gorontalo Province by Kabupaten/Kota based on 1993 Constant Price, 2003-2004 (Rp. Million and Annual Growth) 2003
Kabupaten/ Kota
Rp. million
2004 % Total
Rp. million
Annual Growth (%)
% Total
Boalemo
95,161
6.89
122,467
6.88
Gorontalo
250,036
18.11
486,700
27.33
94.65
Pohuwato
133,827
9.69
177,879
9.99
32.92
Bone Bolango
347,870
25.19
384,184
21.58
10.44
Kota Gorontalo
554,031
40.12
609,315
34.22
9.98
1,380,925
100.00
1,780,545
100.00
28.94
Gorontalo Province
28.69
Source: Gorontalo in Figures 2004/2005
B. Among Sulawesi Provinces For the period of 2001-2004, among other Sulawesi provinces, Gorontalo macro economic situation was considered inferior. Both regional and per Capita GRDP based on the 2000 constant price were the lowest. It should be noted, however, that the annual growth of the province’s both GRDP and GRDP per Capita were higher than those of the other provinces, except Southeast Sulawesi. Meanwhile, the annual growth of the per Capita GRDP was also relatively high. See the table below for detail. The information above may indicate that the Gorontalo Province, although the poorest among other Sulawesi provinces on one hand, is showing a relatively better economic development on the other hand. Table 1.9 GRDP of Sulawesi Provinces based on 2000 Constant Price, 2001-2004 (Rp. Million and % Annual Growth) Province North Sulawesi Central Sulawesi South Sulawesi Southeast Sulawesi
2001
2002
2003
2004
Rp. million
Rp. million
Growth
Rp. million
Growth
Rp. million
Growth
10,543,193
10,868,881
3.09
11,196,462
3.01
11,715,402
4.63
9,089,908
9,600,364
5.62
10,196,750
6.21
10,925,464
7.15
32,199,320
33,516,044
4.09
35,279,891
5.26
37,116,209
5.20
6,063,986
6,468,062
6.66
6,957,662
7.57
7,490,832
7.66
Gorontalo
1,554,100
1,653,845
6.42
1,767,375
6.86
1,889,845
6.93
Sulawesi
59,450,507
62,107,196
4.47
65,398,140
5.30
69,137,752
5.72
Source: Statistical Yearbook of Indonesia 2005/2006, BPS
Table 1.10 GRDP per Capita of Sulawesi Provinces based on 2000 Constant Price 2001-2004 (Rp. and % Annual Growth) Province
2001 Rp.
2002 Rp.
2003 Growth
Rp.
2004 Growth
Rp.
Growth
North Sulawesi
5,202,558
5,295,771
1.79
5,242,967
-1.00
5,427,322
3.52
Central Sulawesi
4,074,672
4,198,068
3.03
4,591,602
9.37
4,850,069
5.63
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2001
Province
2002
Rp.
Rp.
2003 Growth
Rp.
2004 Growth
Rp.
Growth
South Sulawesi
3,942,649
4,045,861
2.62
4,274,962
5.66
4,434,906
3.74
Southeast Sulawesi
3,230,986
3,342,934
3.46
3,686,468
10.28
3,896,029
5.68
Gorontalo
1,836,151
1,924,389
4.81
1,996,765
3.76
2,106,146
5.48
Sulawesi
3,924,771
4,028,353
2.64
4,251,765
5.55
4,431,813
4.23
Source: Statistical Yearbook of Indonesia 2005/2006, BPS
1.2.2
Sectoral Contribution
A. The Province GRDP based on the 2000 constant price: the most dominant sector in the last 5 years (2001-2005) was Agriculture (fluctuating around 30.41 to 32.24%), followed by Services (16.26 to 17.47%) and Trade, Hotel & Restaurant (decrease trend from 15.99 to 13.77%). Manufacturing only contributed about 10%. Finance, Leasing & Business Service: showed increasing trend from 6.54 to 10.27%. Agriculture includes: food crops (corn, paddy), plantation (coconut, cocoa), livestock (cows) and forestry (timber, rattan). Table 1.11 Sectoral Contribution to GRDP (2001-2005) Sector Agriculture
2001
2002
2003
2004
2005 *
31.57
32.24
31.52
30.41
30.48
0.83
0.88
0.95
0.92
0.94
10.17
10.08
9.90
9.74
9.52
Electric, Gas & Water
0.61
0.62
0.60
0.62
0.61
Construction
7.85
7.65
7.69
7.51
7.36
Trade, Hotel & Restaurant
15.99
15.57
14.82
14.21
13.77
Transportation & Communication
10.18
8.77
8.64
9.90
10.11
Mining & quarrying Manufacture
Finance, Leasing & Business Service Services Total GRDP
6.54
7.06
8.41
9.45
10.27
16.26
17.13
17.47
17.24
16.93
100
100
100
100
100
*) Temporary figure Source: BPS of Gorontalo Province
Increasing economic growth from 2000-2005: 7.49% per year (higher than national figure (6.02%), the whole Sulawesi (5.72%), and South Sulawesi (5.20%). Increasing growth of Gorontalo Province was in all sectors, particularly: ° ° °
Finance, Leasing & Business: 23.10%, indicating a positive trend in business activities. Mining & Quarrying, although with growth rate of 13.98%, the contribution to the province GRDP was small (about 0.9%). Services contributed about 16-17% to GRDP, with annual growth of 11.62%.
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Agriculture: With dominant product in corn, agriculture was the largest contributor to the province GRDP, with the average annual growth was only 6.93%. This may indicate that the sector needs more intensified program of development. Manufacturing: the growth was the smallest (1.14%), indicating not good development. Table 1.12 GRDP of Gorontalo Province based on 2000 Constant Price by Sector 2001-2005 (Rp. Million and Average Annual Growth) Sector
*)
Annual Growth (%)
2000
2001
2002
2003
2004
2005
458,527
490,839
533,708
557,678
575,307
617,383
6.93
11,255
12,923
14,615
16,871
17,438
19,122
13.98
182,509
158,145
166,852
175,163
184,178
192,882
1.14
8,385
9,463
10,197
10,546
11,804
12,446
9.69
Construction
118,970
122,137
126,673
136,057
142,126
149,000
5.05
Trade, Hotel & Restaurant
240,436
248,652
257,728
262,173
268,830
278,933
3.20
Transportation & Communication
139,861
158,275
145,180
152,938
187,254
204,781
9.28
Finance, Leasing & Business Service
96,520
101,670
116,897
148,773
178,719
207,983
23.10
216,813
252,868
283,477
308,990
326,106
342,793
11.62
1,473,276
1,554,972
1,655,327
1,769,189
1,891,762
2,025,323
7.49
Agriculture Mining & quarrying Manufacture Electric, Gas & Water
Services Total GRDP
*) Temporary figure Source: BPS of Gorontalo Province
B. Kabupaten / Kota Agriculture is typically dominant in all kabupaten areas, ranging about 35-38% of the respective kabupaten’s total GRDP. Other sectors considered as with moderately strong contribution to kabupatens’ GRDP are Services, Trade, Hotel & Restaurant, Construction and Manufacturing. In the new kabupatens (Bone Bolango and Pohuwato), Manufacturing takes relatively good contribution to the respective kabupaten’s GRDP, i.e. about 14%. The dominant sectors in Kota Gorontalo were Trade, Hotel and Restaurant (about 34% of total GRDP); Transportation and Communication (about 21% of total GRDP); and Services (about 20% of total GRDP).
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Table 1.13 Sectoral Contribution to GRDP by Kabupaten/Kota based on Constant Price (2002-2004) Boalemo Sector Agriculture Mining & quarrying Manufacture Electric, Gas & Water Construction Trade, Hotel & Restaurant Transport & Communication Finance, Leasing & Business Service Services Total GRDP
Sector Agriculture Mining & quarrying Manufacture Electric, Gas & Water Construction Trade, Hotel & Restaurant Transportation & Communication Finance, Leasing & Business Service Services Total GRDP
2002 35.44 0.63 8.48 0.69 11.19 12.83 3.63 7.83 19.28 100.00
2004 37.69 0.44 7.77 0.67 9.89 13.49 3.44 8.34 18.27 100.00
Gorontalo % Growth 3.17 -15.08 -4.19 -1.45 -5.81 2.57 -2.62 3.26 -2.62
2002 36.23 2.88 11.64 0.65 7.66 10.36 5.44 3.71 21.43 100.00
Bone Bolango 2002
2004 35.14 1.31 14.48 0.63 6.48 15.45 3.19 10.10 13.23 100.00
2004 35.3 2.74 11.19 0.78 7.56 10.15 5.62 3.73 22.93 100.00
Pohuwato % Growth -1.28 -2.43 -1.93 10.00 -0.65 -1.01 1.65 0.27 3.50
2002 38.71 6.19 14.35 0.63 8.07 13.45 4.18 6.36 8.06 100.00
Kota Gorontalo % Growth
2002 6.30 0.08 7.97 1.20 3.40 34.59 21.35 4.26 20.85 100.00
2004 5.72 0.07 7.68 1.24 3.53 34.75 20.63 5.39 20.99 100.00
2004 36.13 5.61 14.69 0.59 7.54 16.27 4.11 6.83 8.23 100.00
% Growth -3.33 -4.68 1.18 -3.17 -3.28 10.48 -0.84 3.69 1.05
Gorontalo Province % Growth -4.60 -6.25 -1.82 1.67 1.91 0.23 -1.69 13.26 0.34
2002 32.27 0.88 10.09 0.62 7.66 15.58 8.69 7.07 17.14 100.00
2004 30.48 0.92 9.84 0.62 7.52 14.23 9.67 9.46 17.26 100.00
% Growth -2.77 2.27 -1.24 0.00 -0.91 -4.33 5.64 16.90 0.35
Note: Excluding Kabupaten Bone Bolango Source: BPS Kota/Kabupaten (2004); BPS of Gorontalo Province (2004/2005)
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1.3 Population 1.3.1 Population Number and Growth Number of population in 2004: 896,006 people with averagely 1.8% annual growth (20002004). Population growth was particularly because of migration due to the need for human resource recruitment for government officials, both from central and other provinces. Besides, as the new province, Gorontalo also attracts people from outside to open business there. With the total area of 12,215.44 sqkm, the population density in 2005 was 75 people/sqkm. Most densely region was in urban area of Kota Gorontalo (2,253 people/sqkm), while the lowest was in the westmost region of the province, Kabupaten Pohuwato (24 people/sqkm). Regarding the 2005 population distribution, almost half of the population (46%) lived in Kabupaten Gorontalo. The rest, about 54% were distributed in a somewhat equal proportion to the other 4 localities with the range from 11.90% (Kabupaten Pohuwato) to 15.90% (Kota Gorontalo). The annual population growth rate in the last two years (2003-2005) was as follows: •
The province population growth rate was 1.93% in 2003-2004 and 2.45% in 20042005.
•
The new Kabupaten Bone Bolango presented the highest figure (6.02% in 2003-2004 and 11.45% in 2004-2005), followed by Kabupaten Boalemo (3.22% in 2003-2004 and 6.95% in 2004-2005).
•
The other 3 localities (Kota Gorontalo, Kabupaten Gorontalo and Kabupaten Pohuwato) were experiencing lower population growth rate if compared to the province area. Even Kota Gorontalo showed a decreasing rate, from 0.49% in 2003-2004 to 1.41% in 2004-2005.
Information concerning population dependency ratio can be outlined below: •
For the province area in 2003 was 53.89, slightly decreased if compared to the previous year (56.73).
•
The dependency ratio of the kabupaten areas in 2003 were generally higher than the province figure: Kabupaten Gorontalo (including Kabupaten Bone Bolango) was 59.41 and Kabupaten Boalemo (including Kabupaten Pohuwato) was 58.72.
•
Meanwhile, Kota Gorontalo showed much lower ratio than that of the province in 2003 (43.66). Table 1.14 Population of Gorontalo Province (2003-2005) Population Kabupaten / Kota
Area (sqkm)
2003
2004
People
People
2005
% Growth
People
% Growth
Distrib. in 2005 (%)
Density in 2005 (people/ sqkm)
Boalemo
2,248.20
106,442
109,869
3.22
117,500
6.95
12.80
52
Gorontalo
3,427.00
415,672
420,950
1.27
422,384
0.34
46.01
123
Pohuwato
4,491.03
105,593
106,865
1.20
109,226
2.21
11.90
24
Bone Bolango
1,984.40
103,978
110,240
6.02
122,864
11.45
13.38
62
64.80
147,354
148,080
0.49
145,997
-1.41
15.90
2,253
Kota Gorontalo
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Population Kabupaten / Kota
Gorontalo Province
Area (sqkm)
2003
12,215.44
2004
People
People
879,039
896,004
2005
% Growth
People
1.93
917,971
% Growth
Distrib. in 2005 (%)
Density in 2005 (people/ sqkm)
100.00
75
2.45
Note: (-) Part of original kabupaten, Source: Gorontalo in Figures, BPS
1.3.2 Workforce and Distribution Referring to Susenas (Survai Sosial-ekonomi Nasional) 2004, the working age population (number of population 15 years of age and above) was 572,815 or about 63.93% of the total population. Out of them, about 323,625 people (56.5%) were already having jobs, while the rest (43.5%) were seeking for jobs, unemployed (housewives, senior citizens) or still studying. Table 1.15 Population of Gorontalo Province (2000-2004) Age Group
2000
2001
2002
2003
2004
0 – 14
33.17
33.15
32.86
32.66
33.03
15 – 64
64.17
64.84
63.8
64.98
63.93
65+ Total
2.66
2.01
3.34
2.36
3.04
100.00
100.00
100.00
100.00
100.00
(835,720)
(850,798)
(855,057)
(881,057)
(896,004)
Source: BPS of Gorontalo Province
The dominant livelihoods of workforce (population 15 years old or more) were (1) Agriculture (48.04%); (2) Trade, Hotel and Restaurant (16.25%); (3) Services (13.31%); and (4) Industry (8.12%), which altogether provided jobs for 86% of the working workforce. Figure 1.2
Transportation, Communication 7,43%
Workforce Distribution
Finance 0,93%
Services 13,31%
Trade, Hotel & Restourant 16,25%
Agriculture 48,04%
Construction 3,88% Electricity, Gas & Water 0,64%
Industry 8,12%
Mining 1,40%
Sumber: BPS of Gorontalo Province 2004/2005
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1.3.3 Educational Background Proportion of population 10 years age and over based on education background of the population aged 10 years and more by regions (kota and kabupaten) in 2004: The majority of workforce in the province area: with No School background (35.28%) and with SD background (35.78%). No significant change from the previous years (2002 and 2002), except: ° The percentage of workforce with No School background was decreasing from 41.33% in 2002, to 40.79% in 2003 and 35.28% in 2004. ° The percentage of workforce with SD and SLTA backgrounds were slightly increasing (from 32.60% in 2002 to 35.78% in 2004 for SD and from 11.12% in 2002 to 14.19% in 2004 for SLTA). Predomination of No School and SD background among the workforce was also typical in the kabupaten regions (ranging from 34.02% to 40.31% for No School and from 33.83% to 49.06% for SD background). In Kota Gorontalo, the most dominant workforce backgrounds were SLTA (30.91%) and SLTP (24.84%) See Table 1.16 below for details. Table 1.16 Population 10 years and Over by Education (2004) No
No School
Kabupaten / Kota
1
Kabupaten Boalemo (incl. Pohuwato)
people people
2
Kabupaten Gorontalo (incl. Bone Bolango)
3
Kota Gorontalo
Gorontalo Province 2004 2003 2002
%
54,572
SD/MI 78,696
SLTP 18,566
SLTA/SMU
Higher Education
7,454
1,123
Total 160,411
34.02
49.06
11.57
4.65
0.70
100.00
167,816
140,851
45,007
54,211
8,441
416,326
%
40.31
33.83
10.81
13.02
2.03
100.00
people
23,580
29,940
21,840
37,260
7,920
120,540
%
19.56
24.84
18.12
30.91
6.57
100.00
245,968
249,487
85,413
98,925
17,484
697,277
35.28
35.78
12.25
14.19
2.51
100.00
275,242
216,786
83,854
82,790
16,122
674,794
40.79
32.13
12.43
12.27
2.39
100.00
275,101
216,966
83,854
74,044
15,648
665,613
41.33
32.60
12.60
11.12
2.35
100.00
people % people % people %
Source: Kabupaten/Kota Dalam Angka 2003-2005
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Figure 1.3 Population by Education Background (2004)
Higher Education 2.51%
SMU 14.19%
No School 35.28%
SLTP 12.25%
SD 35.78% Sumber: BPS of Gorontalo Province 2004/2005
1.4 Regional Minimum Wage (Upah Minimum Regional / UMR) The minimum regional wage (Upah Minimum Regional / UMR) of the Gorontalo Province was Rp.435, 000 per month in 2005, only 1.16% increase from the previous year (Rp. 430,000). Compared to UMR of the other Sulawesi Provinces, Gorontalo UMR in 2004 and 2005 was the lowest. However, UMR in Gorontalo was higher than that in West Java, Central Java, DIY and East Java. Appropriateness of UMR can be judged through comparison with KHM (Kebutuhan Hidup Minimum / Minimum Household Need). Based on this, UMP/KHM in Gorontalo was the lowest (79.93% in 2004 and 68.88% in 2005), compared to other provinces in Sulawesi and also to other provinces in Java. See Table 1.17 for detail. Table 1.17 Regional Minimum Wage (Upah Minimum Regional /UMR) and Minimum Household Need (Kebutuhan Hidup Minimum / KHM) Province of Gorontalo and Other Provinces in Sulawesi and Java, 2004-2005 2004 Province
UMP(Rp)
KHM (Rp)
2005 UMP/KHM (%)
UMP(Rp) KHM (Rp)
Increase (%)
UMP/KHM (%)
Gorontalo
430,000
538,000
79.93 435,000
631,500
68.88
1.16
North Sulawesi
545,000
535,000
101.87 600,000
-
-
10.09
Southeat Sulawesi
470,000
503,738
93.30 498,600
498,600
100.00
6.00
Central Sulawesi
450,000
498,000
90.36 510,000
-
-
13.33
South Sulawesi
455,000
448,000
101.56 510,000
505,000
100.99
12.09
SULAWESI
470,000
504,548
93.15 510,720
545,033
93.70
93.70
West Java
366,500
418,258
87.63 408,260
-
-
11.39
DKI Jakarta
671,550
699,713
95.98 711,843
759,953
93.67
6.00
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2004 Province
UMP(Rp)
2005 UMP/KHM (%)
KHM (Rp)
UMP(Rp) KHM (Rp)
UMP/KHM (%)
Increase (%)
Banten
515,000
-
- 585,000
585,000
100
13.59
Central Java
365,000
368,713
99.09 390,000
405,282
96.23
6.85
DI Yogyakarta
365,000
355,000
102.82 400,000
399,964
100.01
9.59
East Java
310,000
309,363
100.21 340,000
-
-
9.68
JAVA
445,310
433,197
102.80 485,369
537,550
90.29
90.29
Note: UMP: Upah Minimum Provinsi (Province Minimum Wage); KHM: Kebutuhan Hidup Minimum (Minimum Household Need)
Unlike other Sulawesi and Java regions, UMP/KHM ratio in Gorontalo is only about 7080%. This may indicate that the productivity of Gorontalo workforce is considered as lower than that of the other regions. The lower wages are also true in the agriculture and fishery sectors.
1.5 Other Economic Indicators 1.5.1
Export
Export value in 2001-2005: increased averagely 73.3% annually, from US$ 3,226,211 in 2001 to US$ 29,120,807 in 2005. Export volume decreased in 2004, but increased in 2005. Top 5 export commodities in 2005 were (1) Corn (51.31%); (2) Copra (28.46%); (3) Timber (13.76%); (4) Liquid Sugar (Gula Tetes: 4.30%); and (5) Pearl (1.27%). The largest export market in 2005 was Malaysia (46.77%) for corn; India (28.46%) for copra; Korea (8.08%) for timber, Japan (6.71%) for pearl, fish, timber and flour, and Taiwan (5.32%) for liquid sugar (gula tetes). Table 1.18 Export Commodities 2001-2005 Year
Volume (Ton)
2001
30,943
2002
46,984
51.84
9,466,373
193.42
2003
58,228
23.93
15,130,049
59.83
2004
49,146
(15.60)
18,556,666
22.65
2005
109,695
123.20
29,120,807
Average Annual Growth
Growth (%)
Value (US$)
Growth (%)
3,226,211
37.2%
56.93 73.3%
Source: Custom Office and Dinas Industri, Perdagangan, dan Penanaman Modal Provinsi Gorontalo
1.5.2
Investment
Plan and Realization Development of the number and value of PMA investment from 2003-2005 can be seen in Table 1.19 below. No significant increase in the number of PMA in Gorontalo, from 7 PMA in 2003 to only 8 PMA in 2004 and 2005, involving a value of US$ 63,649,109 or about 90% of the planned value.
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There were 4 PMA investments proposed in 2005, but due to the lengthy delay of both the permit process from BKPM and capital equipment import, the plans were aborted. There were also 2 PMA businesses stopped their operations, both in fish processing (frozen and packaging) because of taxation and relation with local people constraints. Table 1.19 Number and Value of PMA Projects (2003-2005) Plan
Year
Project
Rp 000
Realization US$
Project
Rp 000
US$
2003
7
652,609,800
72,512,200
7
641,942,005
71,326,889
2004
9
625,837,086
69,537,454
8
604,378,144
63,618,752
2005
12
643,878,000
71,542,000
8
656,222,314
63,649,109
Source: Dinas Industri, Perdagangan dan Penanaman Modal Provinsi Gorontalo
Investment by Sectors The main investment up to December 2005 were as follows: Secondary sector, with a value of Rp. 62,172,109 or 97.7% of the total, predominated by investment in sugar industry, include plantation land. Primary sector only 2.3%. Table 1.20 Number of Projects by Economic Sectors (US$) No
Field of Business
Plan Project
Realization
Investment
Project
Investment
Primary Sector 1
Corn Plantation
1
167,000
1
2
HTI
1
1,600,000
-
-
3
Pearl culture
2
3,250,000
2
550,000
4
5,017,000
3
717,000
Sub-total
167,000
Secondary Sector 4
Frozen Fish and Processing
2
1,260,000
2
760,000
5
Sawmills
1
100,000
1
610,357
6
Sugar industry & plantation
1
60,000,000
1
58,261,752
7
Vegetable oil
1
3,300,000
1
3,300,000
8
Coconut fiber processing
1
365,000
-
-
4
63,765,000
3
62,172,109
Sub-total Tertiary Sector 9
Wholesale/Distributor
1
100,000
-
-
10
Private TV
1
1,400,000
-
-
Sub-total Total
2
1,500,000
-
-
12
71,542,000
8
63,649,109
Source: Dinas Industri, Perdagangan, dan Penanaman Modal. Note: PMA investment in 2005 was US$ 63,649,109 (1 US$=Rp10,310).
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Non-Facility Investment Most of non-facility investments in the last three years were fluctuating. The largest value was in Kabupaten Gorontalo (2003), in Kota Gorontalo (2004), and Kota Gorontalo and Kabupaten Pohuwato (2005). Meanwhile, the least investment in 2003-2005 was in Kabupaten Bone Bolango. Table 1.21 Non-Facility Investment, 2003-2005 Investment No
Kabupaten/Kota
2003 Rp.000
2004 %
Rp.000
2005 %
Rp.000
%
76.15
30,068,000
44.34
1
Kota Gorontalo
2,494,435
14.11
83,716,600
2
Kabupaten Gorontalo
7,732,287
43.73
3,277,000
2.98
6,157,062
9.08
3
Kabupaten Boalemo
0
0.00
0
0.00
6,841,666
10.09
4
Kabupaten Bone Bolango
3,395,000
19.20
4,505,090
4.10
2,908,153
4.29
5
Kabupaten Pohuwato
4,060,000
22.96
18,433,199
16.77
21,837,580
32.20
17,681,722
100.00
109,931,889
100.00
67,812,462
100.00
Total
Source: Dinas Perindag dan Penanaman Modal Provinsi Gorontalo
Investment Policy The Gorontalo Province Government is earger to promote investment and invite any kind of investors to open their businesses there. One policy to support the policy was through the stipulation of the Province Regulation or Perda No. 2/2004 concerning Ease of Investment: to encourage investments through easy, simple, faster service in permit process. Ease of investment includes: Assistance to investors in: permit process, land preparation and provision (rent, KSO and/or acquisition) complying with zoning regulation already stipulated Provision of incentives (fiscal: tax, retribution etc for certain period). Provision of labor. Assurance in land concession right, especially from unrightfully claim by the local people. Protection of investor/s assets from unlawful occupancy, encroachment, or anarchy.
1.5.3
Finance and Banking
Economic growth is supported by financial assistant from both banking and non-banking institutions, which increases from year to year. Loan amount in 2005 was Rp1,04 Trilion, showing an increase of 18.10% from 2004. The largest loan was provided by state owned banks (83.49%), and the rest (16.51%) by private and joint venture banks. The largest loan by economic sector: Trade, Hotel & Restaurant, followed by Agriculture.
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Table 1.22 Bank Loan: Value, Types and Allocation, 2004-2005 No.
Description
1
Value:
2
Type:
a
Capital
b
Investment
c
Consumption
3
Allocation:
a
Agriculture
b
Mining & quarrying
c
Manufacture
d
Electric, Gas & Water
e
Construction
f
Trade, Hotel & Restaurant
g
Transportation & Warehouse
2004 Rp billion
2005 %
Rp billion
%
879,182
100.00
1,038,284
100.00
371,207
42.22
363,735
35.03
34916
3.97
72720
7.00
473,059
53.81
601,829
57.96
117,146
13.324
71,733
6.909
190
0.022
155
0.015
8,219
0.935
6,390
0.615
425
0.048
-
-
21,244
2.416
47,735
4.597
240,430
27.347
277,464
26.723
4,891
0.556
10,811
1.041
h
Services
13,458
1.531
21,999
2.119
I
Others
473,179
53.820
601,997
57.980
Loan Value:
879,182
100.00
1,038,284
100.00
Source: Bank Indonesia Provinsi Sulawesi Utara.
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2 INFRASTRUCTURE CONDITION
FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
2. INFRASTRUCTURE CONDITION GORONTALO PROVINCE
As a new province, Gorontalo infrastructure condition is considered less appropriate. Many development programs are still needed to improve transportation (land, sea and air) infrastructures, electricity and water supply. A change of administrative status from kabupaten to province in 2001, however, had encouraged various development programs in Gorontalo, including infrastructure. Considering the budget capacity which is still limited, prioritization of development should be carefully taken, and therefore not all improvement programs can be carried out simultaneously. Road development is felt as not to be the high priority, while improvement of the Jalaluddin Airport is progressively undertaken beyond the target. Meanwhile, improvement in sea transportation and electricity have already programmed and put into high priority in the province government plan.
2.1 Land Transportation The total road length in the province area is 4,800 km, consists of 12.77% (616 km) national road, 6.52% (314 km) province road, and 80.7% (3,890 km) kabupaten/kota road. More than 40% of the total road is already asphalted, but 43% still in the form of soil road (unsurfaced), and about 17% sands & stones surfaced roads. Majority of roads connecting villages in kabupaten areas are still unsurfaced (soil) roads, some are made by the kabupaten and/or province governments as pioneer roads. Table 2.1 Road Length and Surface Structure No
Road /Category
Type of Surface (km) Asphalt
Gravel
Total
Soil
1
National Road
590.73
25.51
0.00
616.24
2
Provincial Road
134.98
86.63
92.90
314.51
3
Kabupaten/Kota Road
1,190.17
476.35
1,967.83
3,634.35
4
Access Road
54.50
207.54
-
262.04
1,1970.38
796.03
2,060.73
2,856.76
Total
* As of June 2006 Source: Dinas PU Kimpraswil of Gorontalo Province
National Roads The Trans Sulawesi is a national arterial road system passing all provinces in Sulawesi. In Gorontalo it has 4 (four) gates, 2 (two) gates connecting to the North Sulawesi Province and further to Manado, and 2 (two) gates connecting to the Central Sulawesi Province and further to Palu.
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Up to 2004 the total length of the national road was 551.9 km. In 2005 about 60 km provincial road was upgraded to national road, and 4.34 km new road was constructed, making the total national road length 616.24 km in 2005. National roads in Gorontalo generally are in good condition. Although the length of national road in Gorontalo is categorized as the shortest in all Sulawesi, it has the lowest Trans Sulawesi/National Road in damage with the percentage of about 12,72%: 8,64% in heavy damage condition and 4,08% in minor damage. Most of the damaged part is concentrated on a segment more than 25 km long connecting Tolinggula – Bolontio, located in the north-western area of the province bordering with Central Sulawesi Province. This north-western area is inevitably less accessible and in a somewhat isolated and distressed condition The typical national road width is 4.5 m, making it difficult for large vehicles particularly 40 foot-container trailer to pass on. Moreover, the province and kabupaten roads width is less than that. Traffic volume is increasing from year to year as the result of increasing economic activities, partly because of the new area status as a province. However, the limited budget for maintenance had made road condition worse. So far, only 1 (one) unit of Routine Maintenance Unit (RMU) is available for the whole province area. Ideally, 1 unit of RMU can serve the maintenance of about 100-200 km road. For 600 km of national road in Gorontalo Province, at least 3 (three) RMU are needed. Development of road length from 2001-2006 was only 2.33%. See details in the table below. Table 2.2 National Road Length and Condition Condition
2001
2002
2003
2004
2005
2006*
Good
324.66
321.76
273.35
402.63
442.51
Minor Damage
143.52
149.72
221.31
83.24
119.18
25.14
83.73
80.43
57.25
66.05
54.55
53.25
551.91
551.91
551.91
551.92
616.24
616.24
Damage Total
537.85
* As of June 2006 Source: Dinas PU Kimpraswil of Gorontalo Province
Provincial Roads Up to 2004, the total provincial road length was 468.26 km. In 2005, about 60 km of the provincial road was upgraded to national road, and the provincial road length was reduced to 408.28 km in 2005. There was no change of road length afterward. The road is mostly in bad condition, since about 70% is damaged. No new construction of provincial road was undertaken in the last 5 years, although the traffic volume increased. Budget was available limited only for road improvement. In the last 2 years, provincial road with good condition had increased from 107.28 km in 2004 to 119.25 km in 2006. Typical width of the province road is 4.5 m. Similar to the national road, large vehicles are having difficulties to pass on the provincial roads, particularly in hilly and mountainous areas where roads are winding and with sharp turns. Only 20-foot container trailers can pass the road.
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Table 2.3 Provincial Road Length and Condition Condition
2001
Good
2002
2003
2004
2005
2006*
157.38
157.38
136.46
107.28
111.45
119.25
98.15
98.15
108.85
37.03
88.86
90.9
Damage
212.73
212.73
222.95
323.95
207.95
198.11
Total
468.26
468.26
468.26
468.26
408.26
408.26
Minor Damage
* As of June 2006 Source: Dinas PU Kimpraswil of Gorontalo Province
Kabupaten Roads The Total road length of kabupaten/kota roads is more than 3,600 km. Majority of tehe roads, about 54%, is still in unsurfaced condition (soil road), and only 32.7% is surfaced with asphalt. The rest (13.3%) is surfaced with gravel, sands & stones. Kabupaten roads connect national and provincial road network with hinterland areas which are mostly hilly and mountainous. About 75% of kabupaten roads are in damaged condition. More than 50% of the soil roads are in Kabupaten Gorontalo. However, most of the asphal roads also belong to Kabupaten Gorontalo. The typical kabupaten road width is 3.5 m, and of course less appropriate for large vehicle transportation, particularly containers. Very limited maintenance budget is also critical. Table 2.4 Kabupaten Road Length and Surface Condition No
Road Name/Category
Type of Surface (km) Asphalt
Gravel
Land
1
Kab. Gorontalo Road
569,20
180,60
1.141,60
2
Kab. Bone Bolango Road
142,90
33,70
258,85
3
Kab. Boalemo Road
136,60
126,05
360,45
4
Kab. Pohuwato Road
182,60
136,00
206,93
5
Kota Gorontalo Road
158,87
-
-
1.190,17
476,35
1.967,83
Total
* As of June 2006 Source: Dinas PU Kimpraswil of Gorontalo Province
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Figure 2.1 Land Transportation Map of Gorontalo Province SULAWES I
SEA
CENTRAL SULAWESI PROVINCE
NORTH SULAWESI PROVINCE
TO MINI BAY O49
Ruas = Code Number of Road Segment
LEGEND :
Source :
Scale :
National Road
Provincial Boundary
Provincial Road
District Boundary
District Road
Sub-District Boundary
Damage Road
River
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N 1. Rupa Bumi Indonesia Map 1991 2. Dinas PU / Kimpraswil of Gorontalo Province 3. Project of Road & Bridge Monitoring and Planning of Gorontalo Province 0
10
20
30
40 50 Km
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Land Transportation Development Plan Development of land transportation infrastructure in the future will be directed to provide a stable road condition having the capacity of: Supporting development of prioritized areas, especially Agropolitan Centers, Industrial Areas (including sugar factory), and Fishery and Marine Product Centers. Opening up of isolated areas throughprovision of adequate accessibility and transportation facility. Stated in Midterm Development Plan of Gorontalo Province 2005-2007 (Rencana Pembangunan Jangka Menengah Daerah Provinsi Gorontalo Tahun 2005-2007), the land transportation development plan is outlined in several development policies as follows: (a) Improvement of traffic safety through comprehensive and integral approach in various aspects, such as prevention of traffic accident, improvement of law awareness among citizens, improvement of law enforcement system, improvement of handling of accident impacts and accident-prone areas, improvement of information system concerning traffic accident, traffic signs and driving license. (b) Maintaining the balance of supply and demand in transportation and promote the provision of adequate accessibility and transportation facility in isolated areas. (c) Optimal management of road transportation system to comply with national transportation system (Sistranas: Sistem Transportasi Nasional), regional / provincial transportation system (Tatranas: Sistem Penataan Transportasi Wilayah), and local transportation system (Tatralok: Sistem Penataan Transportasi Lokal). As part of the realization of this management is through the preparation of RUJTJ (Rancangan Umum Jaringan Transportasi Jalan: Development Plan of Road Transportation Network), which covers the improvement of transportation nodes, transportation activities, traffic space, management of national and provincial distribution patterns to conform to road class plan. (d) Improvement of technical capacity of transportation in local areas. (e) Supporting of sustainable transportation development. (f)
Improvement of road transportation service level through integral management of road network and terminals, traffic management, improvement of road facilities and traffic signs, and law enforcement.
(g) Promote efficiency in transportation of goods through various deregulations and exemption of retributions, rearrangement of route network and licensing, and promotion of cooperation between government offices (central and local). (h) Enhance the professionalism among related government officials, and improve the discipline among road users. Road Development Plan National Road: (1) Widening and surface improvement from 4.50 m to 7.00 m. (2) Road improvement through horizontal and/or vertical alignment improvement and capacity expansion, particularly at certain accident-prone road segments.
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(3) Additional of routine maintenance unit (RMU). One unit of RMU can serve the maintenance of 100-200 km of road. Therefore, for the maintenance of 616.24 km of national road, 2 units of RMU need to be added to the already available 1 unit of RMU. It should be noted, however, that many equipments of the old RMU also need repair, from light to heavy one. Province Road (1) Widening and surface improvement from 4.50 m to 7.00 m. (2) Road improvement through horizontal and/or vertical alignment improvement and capacity expansion, particularly at certain accident-prone road segments. (3) Change of status from province to national road for roads strongly support the national road system. Access Road (1) Construction of new roads particularly in isolated areas; and (2) Capacity expansion from unpaved roads to asphalted roads.
2.2 Sea Transportation There are 3 seaports for goods/cargo transportation, i.e. Gorontalo, Kwandang, and Anggrek. Gorontalo and Anggrek seaports are container ports, while Kwandang generally is utilized for cattle and agriculture commodities distribution/ transportation.
Gorontalo Seaport
Distribution of cargo in 3 seaports in 2005: about 70% in Gorontalo Seaport, 10% in Anggrek Seaport, and 20% in Kwandang Seaport.
Fishing ports are in Tilamuta and Kwandang (Facilities: Fish auction, ice making plant, and cold storage). Smaller fish landing ports also available in Bumbulan, Lemito, Popayato and Marisa (Kabupaten Pohuwato), Tobulo (Kabupaten Boalemo), Taludaa (Kabupaten Bone Bolango), and Tolinggula (Kabupaten Gorontalo, north coast). Ferry transportation is also served in: (1)
Gorontalo Port: to Luwuk and Banggai by Pelni’s Ship Tilongkabila (Route: Benoa-Surabaya-Makassar-Raha-Kendari-Luwuk-Gorontalo-Bitung); and 3 passenger ships (Kapal Motor Penumpang / KMP) serving the routes Gorontalo-Pagimana, Gorontalo-Wakai-Ampana and Gorontalo-marisa-WakaiPopayato-Ampanan; and
(2)
Kwandang Port: serves passengers with traditional ships to Toli-toli and Palu.
Port Status: Gorontalo Port: Gorontalo Seaport is a Class IV National Port, located in the south coast of Kota Gorontalo, at the estuary of Bone River. Further development of the port is constrained by the hilly physical feature of the location. The port can serve ships up to 5,000 GT, and is used as passengers and cargo seaport. Dominant export is for agriculture products, particularly in corn, using bulk
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
cargo ships (capacity 4,000 GT). The bulk cargo, however, is still performed manually or using conventional equipments. Gorontalo Ferry Port: A ferry and KMP port is also available in the Gorontalo Port Complex, with the service capacity of 750 GT. Anggrek Port: The port is categorized as National Port Class V, located in the north coast of Kabupaten Gorontalo. The service capacity is 10,000 GT, with the sea depth of 15 m. Still limited in loading and unloading facilities, the port is continuously developed as cargo/export port. Anggrek Port actually is accessible to East Asia regions (China, Korea, Vietnam and Japan) and Asean (Malaysia, Brunei and the Phillipines). Currently, however, most of cargo/export activities are still carried out in Gorontalo Port. Kwandang Port: With the category of National Port Class V, the port is located in north coast of Kabupaten Gorontalo, east of Anggrek Port. The port is used for: Fishing port (20 GT) and transportation for livestock (to Balikpapan and Tarakan, East Kalimantan, with maximum capacity of 200 GT); and Traditional passenger ships. Tilamuta Fishing Port: The port is located in Tilamuta, the capital city of Kabupaten Boalemo. It serves fishing ships with 20 GT capacity, and facilitated with ice-making plant and cold storage. Sea Transportation Development Plan The objective of sea transportation development in Gorontalo Province is directed to: (a) (b)
Improve the performance and efficiency of seaports particularly those managed by BUMN (state owned enterprise). Appropriately fit out sea transportation system with navigation aid equipment.
To achieve the objective, the physical development of sea transportation will cover the following programs: (1) (2)
Rehabilitation and maintenance of sea transportation facilities; and Development of new sea transportation facilities.
Enhancement of port utilization to anticipate the increase of bulk cargo of corn needs the development of export supporting equipments, particularly for bulk cargo facilities, such as bulk cargo warehouses, conveyors, etc. Provision of such facilities should be by the government, in this case PT Pelabuhan Indonesia (Pelindo IV).
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2.3 Air Transportation Up to 2003, Jalaluddin Airport in Gorontalo was only used by aircrafts with about 50 passengers (Fokker 27 or ATR). In 2003, upgrading of runway was carried out. With the new 2,250 m long and 30 m wide runway can serve Boeing 737-400 series (150 passengers) and MD-90 (153 passengers). Night landing system is also facilitated. This upgrading actually much preceded the airport development master-plan, in which the runway expansion to 2,250 m x 30 m will be carried out in 2010. The development acceleration was considered crucial due to the change of status of Gorontalo from kabupaten to province in 2001. This has resulted in more air flights using larger aircrafts coming to Gorontalo. Despite the already upgraded runway, however, the terminal facilities so far has not been upgraded, which cause frequent overcrowded situation in the terminal building, particularly when aircrafts depart and arrive at a close time. Air traffic to and from Gorontalo keeps increasing recently, since the sea transport facilities tends to worsen, and air fare is more and more competitive. Direct flights are available daily to and from Makassar daily using Boeing 737 and MD-90 aircrafts. With the same flights passengers can go to Surabaya and/or Jakarta directly. From Makassar there are many connecting flights east to Southeast Sulawesi (Kendari), Maluku (Ambon), Ternate (North Maluku) and Papua (Biak, Timika, Merauke and Jayapura). Connecting flights from Makassar also available to Java, Kalimantan and Bali), and also to Singapore. Up to November 2006, direct flight to Manado airport was available but not in a daily basis (only 2-3 times a week) using small aircrafts. However, additional flights by Sriwijaya Air (2 times a week on Monday and Thursday) using Boeing 737-200 were initiated in November 2006. The flight serves transportation from Gorontalo to Manado, and further to Davao (The Phillipines), vice-versa. Unavailability of daily direct flight between Gorontalo and Manado is considered not beneficial to Gorontalo, particularly in its tourism sector. Tourists’ transportation to and from Manado is still conducted mostly through Trans Sulawesi highway, which needs about 10 hours of travel time. Table 2.5 Air Traffic Development at Jalaluddin Airport 1997 - 2006 Aircraft #
Passengers
Cargo (Kg)
No
Year
1
1997
710
710
8.297
7.137
5.871
52.009
16.838
2
1998
357
357
2.961
2.398
2.373
11.651
9.419
3
1999
201
200
1.199
1.565
543
1.288
1.755
4
2000
178
177
1.627
1.547
637
3.968
14.331
5
2001
377
377
3.514
4.626
3.599
10.474
4.198
6
2002
514
511
11.769
14.520
3.836
179.939
192.771
7
2003
901
900
29.691
30.059
2.670
81.866
62.456
8
2004
1.231
1.229
56.638
63.026
509
85.796
153.437
9
2005
1.059
1.062
70.068
75.767
1.141
305.203
626.329
10
2006
613
612
43.935
45.706
220
287.833
589.201
6.141
6.135
229.699
246.351
21.399
1.020.027
1.670.735
Total
Arrival
Departure
Arrival
Departure
Transit
Unload
Load
* As of June 2006, Source: Jalaluddin Airport, Gorontalo Province
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Table 2.6 Airlines, Aircraft Types and Schedule Operating at Jalaluddin Airport, Gorontalo (2006) No
Aircraft Type
1
Lion Air: B.737-400, MD-90, MD82
2
Sriwijaya Air: B.737-200
3
4
Merpati Nusantara Air: Cassa 212
Trigana Air: ATR.42-300
Pssgrs
Schedule
Route
150-153
Daily (vv)
Jakarta-Makassar-Gorontalo
128
Daily (vv)
Gorontalo-Makassar-Jakarta
Monday (vv)
Gorontalo-Manado
Thursday (vv)
Gorontalo-Manado
24
42
Friday
Poso-Gorontalo-Manado
Saturday
Gorontalo-Manado
Sunday
Manado-Gorontalo-Poso
Wednesday
Manado-Gorontalo-Luwuk
Thursday
Luwuk-Gorontalo-Manado
Saturday
Manado-Gorontalo-Luwuk
Sunday
Luwuk-Gorontalo-Manado
* As of June 2006, Source: Jalaluddin Airport, Gorontalo Province
Air Transportation Development Plan The objective of air transportation development in Gorontalo Province is to provide assurance of the safety, fluency and sustainability of air transportation service. The air transportation development, therefore, should comply with the standards of the air traffic safety, airworthiness and convenience of both air flight and airport/terminal. Air transportation development programs will focus on: The rehabilitation and maintenance of air transport facilities; New construction of air transport infrastructures; and Research and development in air transportation policy. Airport Development Plan and Realization The development of Jalaluddin Airport was planned through the establishment of The Minister of Communication Decree No. 50/2004 concerning the Master Plan of Jalaluddin Airport of Gorontalo Province. As already touched upon previously in this report, the runway expansion to 2,250 m x 30 m which was planned to be carried out in 2010 had been already realized in 2003. However, the development plan of the terminal facilities so far has not been realized. Stipulated in the Master Plan, development of terminal facilities in the Phase I (up to 2010) will cover a total building floor area 5,858 m2, consists of Domestic Passenger Terminal Building (3,745 m2), VVIP Passenger Terminal (510 m2), Cargo Terminal (1,248 m2), Administration/Operation Building (937 m2), Air Traffic Tower (136 m2) and the rest for various supporting facilities. A parking lot, about 4,360 m2 has already been available with the capacity of 124 cars.
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2.4 Electricity Electricity is still very limited in Gorontalo Province, mostly served by diesel power generator plants (PLTD / Pembangkit Listrik Tenaga Disel). The whole Gorontalo Province area currently is served by 3 (three) PLTD stations, namely: PLTD Telaga as the main plant, serving Kota Gorontalo, Kabupaten Gorontalo and Bone Bolango; and PLTD Boroko and Marisa-Tilamuta (small plants), serving Kabupaten Boalemo and Pohuwato. PLTD power supply is not interconnected yet with North Sulawesi and Central Sulawesi systems (Sulutenggo). Transmission net (cable) already connected from Manado to Gorontalo but with low capacity (20 KVA). For the time being, there is a short of electrical supply for Gorontalo Province, especially in peak hours (18.00 – 22.00). Provision of electricity using diesel generating plants is considered more expensive than using hydro power plants. Increase of electrical service demand had reached more than 11% annually between 2003 and 2005. Scheduled electricity blackout was initiated since 30 July 2006. Saving of electrical energy is applied for PLTD Telaga (1,518 kW) and for PLTD Marisa and PLTD Tilamuta.(190 kW). Geotermal potency is also available in Gorontalo. However, utilization of such resource needs careful assessment, especially concerning the capacity, sustainability and cost. Geotermal power supply in Lahendong, North Sulawesi (20 MW) is already in operation after conducting about 20 years research and development as well as pilot project activities. Table 2.7 Electricity Condition of PLTD Telaga (kW) No.
Description
2005
Jan-July 2006
1
Installed
37,000
36,540
2
Serving Capacity
23,650
21,500
3
Peak Load
22,400
20,225*
4
Reserved Capacity
1,250
1,275
2,350
2,200
-1,100
-925
5
Largest Machine Unit
6
Fixed Reserve (Cadangan Pasti)
Source: PT PLN Cab. Gorontalo, * Saving from scheduled blackout 1,518 kW
Table 2.8 Realization of Utilization/Sale of Electricity in Gorontalo Province Electricity Utilization Rate Group
2003 KWh
Social Household
2004 KVArh
KWh
2005 KVArh
KWh
KVArh
3.485.629
-
4.099.729
-
4.803.290
-
61.428.052
-
68.009.288
-
74.074.590
-
Business
8.737.108
-
11.510.198
-
13.526.659
90.408
Industry
12.474.834
1.069.071
11.695.924
1.207.878
12.299.544
1.346.339
7.902.913
5.688
10.964.737
756
11.622.783
20.556
Public Miscellaneous Total
168.876
-
230.452
-
342.517
-
94.197.412
1.074.759
106.510.328
1.208.634
116.669.383
1.457.303
* As of June 2006, Source: PLN, Gorontalo Province
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Electricity Development Plan Information on the electricity development plan is obtained from Rencana Umum Ketenagalistrikan Daerah (RUKD) Provinsi Gorontalo 2004. Some important information is outlined below: Parallel with the increase in electricity demand in Gorontalo (11 – 12% annually), and also the increase of the peak load also about 12% annually, it is projected that the electricity peak load in 2020 will reach 195 MW, almost 7 x of that in 2003. It is therefore that development of additional electrical power generators should be planned. For the whole province area, there are 3 (three) electricity power system will be developed, namely: (a) Development of Gorontalo Power System: covering the construction of Coal Power Generator in Kwandang, Diesel Power Generator in Isimu, Minihydro Power Generator in Mongango, Hydro Power Generator in Dumbaya Bulan (Bone-2), and Geothermal Power Generator in Lombongo. The total planned capacity will be about 60 MW in 2010, 110 MW in 2015 and 162.6 MW in 2020. (b) Development of Marisa Power System: a 150 kV transmission link will be developed from Isimu to Marisa in 2013. Provision of the link will enable electricity service for Marisa service area from the Gorontalo power system. Before the completion of the transmission system, the Marisa generating plant will utilize a machine relocated from Buroko and genset provided by the government, with the total capacity of about 2.5 MW. (c) Development of Isolated Systems: Small, isolated and technically viable power systems gradually will be interconnected through Marissa Transmission Link 20 kV. Those which are not viable for grid development will be expanded utilizing machines relocated from generators with appropriate supply. Upgrading of isolated systems using relocated machines is planned with the total capacity of 10.8 MW in 2010, 17 MW in 2015, and 19.2 MW in 2020.
2.5 Water Supply Tap water system served by PDAM is available only in Kota Gorontalo and its surrounding (Kabupaten Gorontalo). The total supply volume by PDAM was only 3.8 million m3 in 2,000, and increased to: about 4.8 million m3 in 2004, consumed by households (83.8%), hotel and commercial (4.5%), public facilities (5.3%), industries (0.3%), government institution (8.1%) and others (including loss 8%). The main water source for PDAM is river. However, due to the hilly topographic condition of the area and less appropriate environment management of the upstream areas, water supply tends to decrease during dry season. Ground water source, which is highly potential in Gorontalo has not been developed by PDAM so far. Many rural areas depend very much to ground water, rivers, lakes and water springs. Water Resource Development Plan Development of clean water supply is planned both for household and various economic activities (industry, commercial, hotel, restaurant etc). Aside from that, water supply is also needed for irrigation, particularly in relation with the province program to develop cornbased agropolitan centers in the province area.
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Water source for both is mainly from rivers and other water bodies (lakes, swamps and springs). However, small clean water system utilizing groundwater electrical pumps are also developed in remote areas; some are financed by foreign donors such as JICA and the World Bank. Several water supply provision programs include: (1) Program AMPLBM (Air Minum dan Penyehatan Lingkungan Berbasis Masyarakat), Community-based Clean Water and Sanitation Program, financed by the World Bank. (2) PAMSIMAS (Program Air Minum dan Sanitasi Masyarakat), Clean Water and Sanitation Program), carried out in all kabupatens, except in Bone Bolango. (3) SWASH (Sulawesi Water and Sanitation Hygiene), initiated in 2004. The program is a joint cooperation between CARE International Canada with the Gorontalo Province Government. Coverage area of SWASH is in Kabupaten Bone Bolango and Boalemo. Development of irrigation is planned covering construction and rehabilitation of technical and semi technical irrigation systems especially on several large rivers of Gorontalo Province (Paguyaman, Bone and Randangan). In relation with agropolitan development, provision of irrigation water using a newly designed non-machine water pump was already introduced. Several pumps had been constructed in corn cultivation centers in Kabupaten Bone Bolango and Kabupaten Gorontalo areas, namely: •
PATM Alale on Bone River, Kabupaten Bone Bolango: Service capacity: 1.000 ha; Service area: border area between Kecamatan Suwawa and Kabila Bone, covering Desa Boludawa, Montong, Tingkohubu and Bongopini.
•
PATM Cahaya Agropolitan, Hunggaluwa, Kabupaten Gorontalo: Service capacity: 500 ha; Service area: Desa Kayu Bulan, Duulanaa, Haepuhulawa, Hunggaluwa and Bolihuwangga.
2.6 Telecommunication Telecommunication in Gorontalo has been available although in a somewhat limited development. Limited service is particularly felt in fixed home connections provided by PT Telkom. Several kecamatans have not served by the system, particularly in remote areas of Kabupaten Boalemo, Pohuwato and Gorontalo. Further development of services particularly needed in Kecamatan Sumalata (Kabupaten Gorontalo), in Kecamatan Randangan and Kecamatan Lemito (Kabupaten Pohuwato). Currently several units of BTS (Base Tower System) are under construction. Television broadcasting system is possible mostly through satellite reception using parabola. Internet service is also already provided, served by only 1 provider with limited speed.
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
2.7 Industrial Estate An integral industrial estate currently is on its way of development. The industrial area is planned for the integral development of corn main and side products processing, with the cow farming activity. Within the industrial area, named KIAT (Kawasan Industri Agro Terpadu), various economic activities are integrally carried out, covering the following activities: (1) Processing of main corn products to produce corn grains, corn flour, snacks, etc; (2) Processing of side corn products/wastes (stalks, leaves etc) to produce animal /livestock’s feed; and (3) Cow farming industry for the supply to local, regional and national markets (East Kalimantan, North Sulawesi, Maluku etc). The animal feed produced in KIAT will be utilized as part of livestock food management to produce better quality of cattle, A newly planned KIAT has been initiated recently in 2005 in Kabupaten Bone Bolango and prioritized for integrated agriculture industry. However, land acquisition and preparation of physical planning had been initiated in mid-2006, with area covered about 5 Ha. Currently, construction of physical facilities is underway. Below will presented map of basic infrastructure in Gorontalo Province.
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Figure 2.2 Basic Infrastructure Map of Gorontalo Province 121 30' E
122 00' E
123 30' E
123 00' E
122 30' E
N
S
Toli-Toli Palu 0
3
6
12
u
l
a
w
e
s
13
Tolinggula Lokal Port
Anggrek Container Port
12
Tl.Bolombo
PEG
11
LEH PALE
AN
G.Libodongu
10
P.Maa P.Duyanumo
Bulonlio
P.Motua P.Lahu
Tg.Dunu
P.Lampu P.Lamasi
G.Pomonto
G.Pentolo
G.Buhu
Tg.Molu
P.Dudepo
G.Bubalango
G.Nabe
To Baroko
Alinggola
P.Ponelo
9
Ds.Popaki
G.Balaloupa
Manado
Tg.Labuandolong
P.Motinggolo
Teluk Kwandang
10
G.Palajuli
Moluo
G.Datanu G.Lowulowu
NORTH SULAWESI PROVINCE
G.Molalahu G.Oliboe
Kabupaten Gorontalo
G.Batutiga
Kabupaten Pohuwato
G.Palualo G.Moutong
Kabupaten Boalemo
Pegunungan Bapi
Sidomulyo Pancakarsa I G.Lomali G.Pandet
To
00 30' N
G.Marisa
3 5
G.Padang G.Timbuale
G.Panu
G.Langge
6
Randangan
Tirisora
1 P.Sangi
Capital of Province City of District City of Sub-District River Mount Provincial Boundary District Boundary Arterial road Collector Road
P.Paniki
4
P.Puntu Dao
Pentadu
7
Tabula
Tj.Ombula
Tj.Panjang
Mitrapacific Consulindo International
40 320 320 780 780 200
G.Ledaleda
Teluk Gorontalo
Tj.Olinlata
G.Tanewa
Oluhuta
Tilamuta Fish Port
G.Imani
o
m
i
n
I
B
Makassar Jakarta
a
Capacity (KWH) 250 7010 300 40 40
1. Gorontalo - Suwawa 2. Gorontalo - Taludaa 3. Gorontalo - Kayubulan 4. Tantayuo dan sekitarnya 5. Labuta dan Sekitarnya 6. Gorontalo - Tilamuta
Poso
3
Jalaluddin Airport
Luwuk
Length (Km) 51,4 75 12,2 19 31,7 105
No. / Scope Network
gu To Moliba
1 Tl.Tahidaa
Gorontalo Port Gorontalo Ferry Port
y
No. / Scope Network
G.Balobolanga
5
6
Electricity Network in Gorontalo Province
7. Tilamuta 8. Telaga 9. Atinggola 10. Bolontio 11. Lolingola
G.Tapambundu
4
Electricity Power Plant in Gorontalo Province No. /Power Plant
Kabupaten Bone Bolango
SUWAWA
Bilungala
7
T
Capacity (KWH)
G.Molintogupo
G.Lantadutomula Tj.Wolibadu
Luwuk
No. /Power Plant 1. Molosipat 2. Popayato 3. Lemito 4. Marissa 5. Bontolio 6. Pentadu
Blamu
P.Bitha
8
Other Road Airport Harbor
Duruma Selatan Manggodila 4 Olihuta
P.Limba
Wakai 9
Bulila D.Limboto Tomulobulso
G.Tatuwoto
P.Montuli
P.Lahe
PERANT ANAA N
Ayula Selatan
LIMBOTO
Kayubulan
P.Kambing
PEGUNU NGAN
G.Olaola
Ds.Ulapoloa
GORONTALO
Bubaa
P.Mahuparbodaa
Tj.Boloaliyo
P.Manuangi
Dulamayo
8 Ds.Pona
Payunga
Labutan Timur
Bolumato
P.Pomohadoa
P.Popayatobesar
Mulombulahe
TILAMUTA
MARISA
P.Lamuadae P.Pasiglogo
P.Tarolaya
Suka Meladu
Lamu Pulubala
G.Oyile
Moholahu
Mo uto ng
LEGEND :
Bonggo
G.Tilempede
Lembo
2
1
a
Kwandang Fish Port
Tg.Keramat
Tg.Pasirputih
NG UNU
e
Manado 11
Tg.Babi
Tolinggula
CENTRAL SULAWESI PROVINCE
S
Kwandang Public Port
Tarakan P.Tolinggula
01 00' N
i
Philipine
18 km
Poso Length (Km)
7. Tilamuta - Marissa 55 8. Manunggal Karya dan sekitarnya 34 9. Lemito dan sekitarnya 38,3 10. Garontalo - Atinggola 104,2 11. Malingkapalo - Manano 16,9 12. Sumalata dan sekitarnya 16,9 13. Talinggola dan sekitarnya 16,9
2
Surabaya Semarang Jakarta (Kapal Kontainer, Pertamina, etc)
Bitung Tahidaa Lokal/Fish Port
Jepang Philipina Malaysia Korea, etc. (Kapal Curah)
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3 CURRENT SITUATION and FUTURE PROSPECT of MAJOR SECTORS
FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
3. CURRENT SITUATION and FUTURE PROSPECT of MAJOR SECTORS
GORONTALO PROVINCE
3.1
Analysis of Major Sectors
Sectors with the largest contribution to GRDP in 2005 were: Agriculture: contributed 30.48% of the GRDP, with 6.13% annual growth in the last 5 years. The sector employed 48.04% of the total labor in 2004. The large contribution to GRDP shows the strategic role of agriculture, especially in food crops, plantation, livestock and forestry. The Province government was quite aware of such potency, and put the Agriculture as one of the 3 main focuses of its development programs: (1) Human resource development: (Region-based Education); (2) Food crops development, especially corn (formulated in Corn-based Agropolitan Development Plan); and (3) Fishery and marine development (programmed in Gorontalo as National Fishery Showcase). Other sectors will also be developed as complementary or substitution development. Other dominant sectors contributing the GRDP were: Trade, Hotel and Restaurant (13.8%), employing 16.25% of the workforce in 2004, and annual growth of 3.01% in the last 5 years. Services (16.9%), employing 13.31% of the workforce, with annual growth of 9.59% in the last 5 years. Trade, Hotel and Restaurant and Services has been evidently contributed large portion to GRDP. The two sectors develop in line with other sectors and the province economy, which generally increases in relatively high speed. The change of Gorontalo status to a province was also felt as positive trigger the two sectors being the main economic sectors. Industry only contributed 9.5%, employment of 8.12%, and annual growth 1.11% in the last 5 years. The workforce employed in the sector was 8.12% in 2004. Industry has not well developed in Gorontalo, and the contribution to the GRDP is lower than that of other main sectors. However, the development of primary sector used to have influential effect to the creation of industrialization of secondary products of other sectors, provided that raw materials, skilled labor force and infrastructure are appropriately available. Other than the main sectors above, several sectors having the potentiality to be significantly developed, prospective for investment, or having the strategic role due to their competitive advantages, will be specifically discussed. These sectors are: Tourism; Handcrafting; and
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Energy. Limited land available for investment in extensive production of primary sector, less labors with productivity meeting the rate of Regional Minimum Wage, sustainable raw material supply, and infrastructure condition of the province will be the main considerations to measure the competitiveness of each sector and commodity.
3.2
Agriculture
3.2.1
General Performance of Agriculture
Several sub-sectors are considered dominant in the province, namely Food Crops, Plantation, Animal Husbandry and Fishery. Main commodities are corn, coconut, cocoa, cows and capture fishes. Fishery will be discussed separately from other sub-sectors of Agriculture due the characteristic nature of the resource which shows specific potency. Development of sub-sectors’ contribution in the Agriculture Sector from year to year tends to fluctuate. Sub-sector with increasing trend from the year 200-2005 was Food Crops, while Forestry seemed to decline. Other sub-sectors looked in somewhat stable condition, as presented in the table below. Table 3.1 Agriculture Contribution in GRDP SECTOR
Year 2000
2001
2002
2003
2004 *
2005 *
AGRICULTURE
31,12
31,57
32,24
31,52
30,41
30,48
Food crops
12,98
12,76
13,24
13,52
13,76
13,90
Plantation
7,61
7,73
7,70
7,37
7,07
6,88
Livestock and poultry
3,99
4,14
4,28
4,15
4,40
4,53
Forestry
2,31
2,44
2,41
2,10
0,94
0,95
Fishery
4,23
4,50
4,60
4,37
4,23
4,23
Source: Dinas Pertanian Tanaman Pangan Prov. Gorontalo, * temporary
Situation as presented by the table above shows that Agriculture generally took the role of economic generator of the province economy. As it is typical in other Indonesia areas, Agriculture in Gorontalo also takes the important role in the daily life pattern of the agrarian community, where the natural resources are conducive for various crops cultivation. Land Suitability for Agriculture From the soil condition, as already discussed in Chapter 1, more than 80% of the total land belongs to the soil type “Association of Cambisol Haplic & Red-Yellow Mediteran”, which is very suitable for various agriculture, plantation and forest crops, provided that water is appropriately available. Only about 6% of land is acid in characteristic and 8% is dry or infertile land. Aside of that, generally Gorontalo soil is considered as suitable for agriculture, both for annual and seasonal crops. Most of the lands are with topsoil thickness 30-60 cm, some even more than 90 cm particularly in the lower part of the areas, medium textured, and generally non-erosion except in steep terrain.
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Table 3.2 Dominant Types and Physical Characteristic of Soil in Gorontalo Province Soil Characteristic
Bone Bolango
Kota Gorontalo
Pohuwato
Boalemo
Gorontalo
328,195
127,675
326,349
173,550
2,705
Dry Season Category
21,170
18,126
42,807
5,734
Acid Soil
62,328
7,592
6,904
-
Sub Total
432,766
172,706
393,680
A1 aT
374,692
62,445
C1 aT
48,479
93,203
Total
%
Types Association of Kambisol Haplik & Mediteranian Red Yellow
958,474
80.51
2,118
89,955
7.56
-
76,824
6.45
187,273
6,160
1,192,585
138,031
140,571
3,182
718,921
60.28
170,874
12,682
-
325,238
27.27 12.45
Soil Class
Others Total
9,595
17,058
84,775
34,020
2,978
148,426
432,766
172,706
393,680
187,273
6,160
1,192,585
Source: BPN Prov. Gorontalo
Meanwhile, the rainfall in Gorontalo is relatively high, with small dry land coverage. Such condition, together with the good soil quality in Gorontalo, supports very positively the agriculture activities in the province. With the average annual rainfall about 2,500 mm, the area with the most rainfall is in northern parts, particularly in Kabupaten Gorontalo stretching from west to east direction), and almost all part of Kabupaten Pohuwato. Areas with relatively rainfall are southern parts of Kabupaten Boalemo, Kabupaten Gorontalo, Kota Gorontalo and Kabupaten Bone Bolango, excluded Kabupaten Pohuwato. Discharge capacity and the rain catchment’s area are shown in the Table below. Table 3.3 Annual Rainfall and Rain Catchment’s Area of Gorontalo Province (Ha) Kab./Kota
Catchment Area (ha) by Annual Rainfall (mm/year) < 1,500
1,501 – 2,000
2,001 – 2,500
2,501 – 3,000
> 3,000
Total
Pohuwato
-
-
75,805
350,245
-
426,050
Boalemo
-
100,432
61,065
11,873
-
173,370
Gorontalo
12,332
133,799
67,459
163,418
20,652
397,660
Bone Bolango
70,561
93,301
23,337
101
-
87,300
Kota Gorontalo Total %
3,370
2,790
-
-
-
6,160
86,263
330,322
227,666
525,637
20,652
1,190,540
7.25
27.75
19.12
44.15
1.73
100.00
Source: BPN Prov. Gorontalo
Land Available for Agriculture Beneficial situation in soil quality and good rainfall situation for agriculture, however, are not supported with good topographical feature of the province. Only about 30% of the land is with the slope of 0-15%, while more than 52% with the slope of >25%. The situation has significantly hindered the effort of investment in several crops, particularly those need large, whole and near flat land area, such as oil palm, sugarcane and rubber trees.
Several crops such as paddy, can be extensively developed in large scale at a few locations only in Kabupaten Boalemo (Kecamatan Paguyaman and Kecamatan
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Wonosari) around Paguyaman River catchment’s area, and in Kabupaten Pohuwato (Kecamatan Randangan, Marisa and Paguat south parts) around the downstream of Randangan River. So is the case with sugar, corn and coconut, where large, less sloping and whole land area development is available in those particular areas. Other locations accommodate only small-scale agriculture activities by local farmers. Labour Available for Agriculture The number of farmer households in Gorontalo Province is relatively less than other Sulawesi provinces. In 2005, based on statistical data from Bank Indonesia Manado Branch Office, there were 184,000 farmers in Gorontalo or about 120,000 HH. Out of them, 30,000 HH were transmigrant farmers (from Java and Bali), and 10,000 HH were working in fishery activities. Theoretically, the average each farmer HH has 2.5 ha of land to cultivate. In reality, however, the optimum capacity of a farmer HH for food crops cultivation utilizing conventional technology is only about 0.6 – 1.0 ha. The number is considered as minor if related with the target of developing corn product to 1 million ton/year (Corn-based Agropolitan Program). Export of Agriculture Products Several agriculture commodities have developed into export commodities although in somewhat limited volume, such as coconut, corn and timber. The total Gorontalo export itself was in its initial development in the last 5 years, dominated largely by agricultural products, about 92% of the total export value. Fishery products so far only contribute about 1.5% of export value, and other sectors 6.3%. Table 3.4 Main Export Commodities in Agriculture (2005) NO
COMMODITY
CONTRIBUTION VALUE (US$)
%
1
Timber
1.081.497
3.71
2
Copra
2.210.347
7.59
3
Rude Coconut Oil
18.724.240
64.30
4
Yellow Corn
4.041.220
13.88
5
Coconut Powder
AGRICULTURE FISHERY OTHERS TOTAL
775.000
2.66
26.832.304
92.14
453.503
1.56
1.835.000
6.30
29.120.807
100.00
Source: Dinas Perindag & PM Prov. Gorontalo, Bea Cukai Gorontalo
The Main Agriculture Problems From the illustration above, it can be concluded that the main agriculture problems in Gorontalo are: o In the national setting, the agricultural commodities of Gorontalo Province are not significant enough due to limited number of workforce and appropriate land available. The commodities are mostly for local consumption, partly due to the limited distribution network, which hinders the marketing to surrounding regions. o Looking at the land condition which is dominated by the hilly and mountainous topographic locations, it is perceivable that the cultivation cost would be higher if
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
compared to that in area dominated by flat or almost flat area. Moreover, although the soil fertility is good enough, it is difficult to obtain whole (not fragmented) large land for large-scale and extensive agriculture or plantation cultivation. Therefore, the only option to obtain competitive agricultural products for the long-term development, which smallholders can manage, is through high-value crops cultivation. High-value crops suitable for Gorontalo are cocoa, arabica coffee, mulberry for silk cocoon culture, vanilla, volatile oil etc. o However, high-value crops/commodities need higher cultivation technology and skills of the farmers. This will be the challenge for all of the stakeholders in Gorontalo to compete with other regions in developing in its human resource capacity, particularly in high-value commodities production.
3.2.2 Product Competitiveness Food Crops Contribution of food crops is about 14% of the total GRDP. The main food crops’ products are corn, paddy, cassava, peanut, soybean and sweet potato. Except corn, food crops products are not significant nationally, and contribute only small portion to the local economy. Aside form that, most of food crops produced in Gorontalo are for staple foods, except corn (already exported as prioritized product and developed to be competitive product). The export of corn has triggered the cultivation and production of corn in Gorontalo. Between 2001 and 2005 the cultivation area of corn had been consistently growing more than 300% resulted in the increase of production more than 400%. Other food crops’ products also increased but in a relatively lower rates and fluctuate, including paddy. Information on this is shown below. Table 3.5 Harvest Area and Production of Main Food Crops, 2001-2005 Commodity
2001 Area (Ha)
2002
Prod. (Ton)
Area (Ha)
2003
Prod. (Ton)
Area (Ha)
Prod. (Ton)
Paddy
35,639
158,870
34,652
153,222
34,635
156,158
Corn
36,610
81,720
45,718
130,251
58,716
183,998
Peanuts
1,845
2,173
1,518
1,849
3,344
3,189
Green Peas
3,202
3,627
2,014
2,328
680
745
Cassava
1,185
12,233
929
9,755
796
9,436
618
5,325
506
4,293
404
3,721
Sweet Potatoes
Commodity
2004 Area (Ha)
2005
Prod. (Ton)
Area (Ha)
Average Growth (%)
Prod. (Ton)
Area (Ha)
Prod. (Ton)
Paddy
36,731
160,306
39,110
167,153
6.26
3.46
Corn
72,529
251,223
107,752
400,046
36.04
47.89 30.64
Peanuts
4,327
3,711
4,341
5,378
14.86
Green Peas
793
637
595
726
-4.18
-0.26
Cassava
950
9,700
1,048
12,211
14.83
14.34
2,708
6,944
352
3,308
241.65
17.13
Sweet Potatoes
Source: Dinas Pertanian Tanaman Pangan Prov. Gorontalo
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
The reasons for corn to be prioritized in Gorontalo are: Corn has been traditional food of Gorontalo people for long time, and almost all of the farmers, also those with the limited technology and skill, cultivate it. The corn value, particularly in the international market, is increasing due to the decreasing of corn supply in the US because of the larger part of corn products there is processed into ethanol as substitution of fossil fuel. Food crops cultivated in Gorontalo are easy to grow such as corn and various kinds of tubers. Except corn, food crops productivity in Gorontalo Province is lower and less competitive than that of the average province in Java or nationally. Paddy and legumes are planted by the transmigrating farmers, with productivity of the farmers in Java or average national figures. However, seen from the quantity point of view, almost all of the agriculture commodities in Gorontalo are not competitive enough and far below the average product quantity of the main producers in Indonesia. The Gorontalo contribution to the national products only falls between 0.15 – 0.70%. Tabel 3.6 Production and Productivity of Main Commodities of Food Crops Gorontalo as Compared to National (2005) Productivity (Kw/Ha)
Commodity
Gorontalo
Production (Ton)
National
Gorontalo
National
% Gorontalo
Paddy
42,74
45,75
167.153
53.984.590
0,31
Soybean
13,89
13,05
4.038
797.135
0,51
Peanut
12,39
11,64
5.378
837.633
0,64
116,52
159,00
12.211
19.459.402
0,06
93,99
104,00
3.308
1.840.248
0,18
Cassava Sweet Potato
Source: Dinas Pertanian Tanaman Pangan Prov. Gorontalo, Statistik Pertanian Indonesia 2005
Among other commodities of food crops, corn is specifically different, especially due to local government’s strong political commitment to develop the product. Although the production quantity falls under that of the main producers in Indonesia, the productivity is higher than that in those main producers (East Java and Lampung), or the national figure. Below is the picture of the product volume and productivity in Gorontalo and other corn production centers in Indonesia. Table 3.7 Production and Productivity of Corn Gorontalo vs, Main Producers in Indonesia (2005) Province as Main Producer Corn
Gorontalo Total
%
Sulsel Total
Jatim
Lampung
%
Total
%
Total
Nasional* %
Tot.
Harvest Area (Ha)
107,525
3.07
201,037
5.74
1,167,630
33,32
409.394
11,68
3.504.234
Production (Ton)
400,046
3.33
677,092
5.64
4,240,308
35,30
1.430.695
11,91
12.013.707
Productivity (Kw/Ha)
37.20
33.68
36.32
34.95
34.28
Source: Dinas Pertanian Tanaman Pangan Prov. Gorontalo, Statistik Pertanian Indonesia 2005
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Aside of that, corn export of Gorontalo also contributes significantly to the national corn export. In 2005, the province export was 35,000 ton or 10% of the total production. The export value was increasing from year to year, averagely 80% per year in the last 5 years. Figure 3.1 Corn Export Trend of Gorontalo, 2001-2005 (Ton) 40.000
35.960
Ekspor (Ton)
30.000 18.950
20.000
12.310
10.000 0
6.700 6.300
2001
2002
2003
2004
2005
Tahun
Source:
Dinas Pertanian Tanaman Pangan Prov. Gorontalo, Bea Cukai Gorontalo (2006)
In line with the export volume, the export value also increased from US$ 613,000 in 2001 to US$ 4 million in 2005. The volume of inter-insular trade had reached 92,000 ton (23% of the total production). Corn export of Gorontalo showed very progressive inclination if compared to other provinces, although in quantity was still lower. This can be seen in the contribution of corn export of Gorontalo to national corn export. In 2001 the contribution was only 7.07%, but it drastically jumped to more than 40% in the following years. Table 3.8 Export Contribution of Corn to National Indonesia, 2001-2005 (Ton) Gorontalo Year 2001
Export 6.300
Indonesia
Production
% Export
81.720
7,71
Export 89.059
Production 9.347.192
% Gorontalo to Indonesia
% Ekspor 0,95
7,07
2002
6.700
130.251
5,14
14.285
9.654.105
0,15
46,90
2003
18.950
183.998
10,30
33.691
10.886.442
0,31
56,25
2004
12.310
251.223
4,90
32.679
11.225.243
0,29
37,67
2005
35.960
400.046
8,99
na
12.013.707
-
-
Average Growth
86,57
49,11
24,49
12,22
6,55
4,69
137,48
Source: Bea Cukai Gorontalo, Dinas Pertanian Tanaman Pangan Prov. Gorontalo (2006), Statistik Pertanian Indonesia 2005
From the illustration on main commodities of the sub-sector, it can be concluded that so far corn has been the only commodity of Gorontalo Province having the competitive productivity and marketing. It should be taken into account, however, that currently many local governments (North Sulatra, NTB, Lampung and South Sumatra) also strongly develop corn cultivation intended for export. Part of the program is utilizing the irrigation system for intercropping corn with paddy. Therefore, for mid- and long-term target, competitiveness of Gorontalo corn should be maintained.
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Horticulture In horticulture products, the main commodities are chili, banana and mango, which are not developed in economic scale. As side products and many are cultivated in home yards, the product volume tends to fluctuate, and consumed locally, except chili. Chili is marketed not only in the form of primary product, but also in the secondary or processed commodities, such as chili sauce, chili powder. The processed products are also developed for export market, although still in small volume. Horticulture crops of Gorontalo are mostly cultivated by smallholders conventionally, and the products are far from being highly competitive, nationally and internationally. As comparison, chili product of Gorontalo in 2004 was 2,180 ton, while in the chili cultivation center such as in Kabupaten Bandung the production had reached 24,000 ton. Nationally, horticulture products of Gorontalo are still far below the average products of main producers in Indonesia. Contribution of the province is ranging from 0.15 – 0.25% annually. Horticulture products have not been commercially cultivated, which makes the products are not competitive as compared to other regions in Indonesia. For example: chili product in 2004 was 2,180 ton, while the production of chili center in Bandung was 25,000 ton. Table 3.9 Production of Horticulture Main Commodities, Gorontalo vs National (2004) Production (Ton)
Commodity
Gorontalo
National
% Gorontalo
Chili
2.183
1.100.514
0,20
Banana
7.200
4.874.439
0,15
Mango
3.574
1.437.665
0,25
Source: Dinas Pertanian Tanaman Pangan Prov. Gorontalo, Statistik Pertanian Indonesia 2005
Plantation Sub-sector The sub-sector’s contribution to GRDP of Gorontalo Province is about 7%. The main commodities are coconut, sugarcane, cocoa, candlenut and clove, covering 95% of the total plantation area already utilized in Gorontalo. The utilized plantataion area of the province is more than 83,000 ha, which is utilized for coconut (70%), cocoa (6.5%), clove (6%), candlenut (6%) and sugarcane (7%). The remainder is for other commodities (coffee, nutmeg, palm trees etc), with the average less than 1% of the total area. Productivity of the crops is considered good enough if compared to that in other Sulawesi provinces, although, except coconut, inferior to average national figure. Table 3.10 Productivity of 5 Main Plantation Commodities in Gorontalo Compared with Other Sulawesi Provinces, 2004/2005 Commodity
Productivity (Kg/Ha) Gorontalo
Sulut
Sulteng
Sultra
Sulsel
National
Coconut
1.740
1.438
1.454
884
1.200
1107
Cocoa
1.157
487
766
1.021
1.000
1.189
267
373
365
246
469
287
5.239
-
-
-
2.743
5.868
Clove Sugarcane
Source: Dinas Kehutanan dan Perkebunan 2006, BPS Provinsi Gorontalo 2004/2005, Statistik Indonesia 2005.
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Meanwhile, area size and production volume of main plantation crops of Gorontalo are far below those in other Sulawesi provinces. Portion to national figures only falls between 0.52.0%. Tabel 3.11 Area and Production of 5 Main Plantation Commodities in Gorontalo Compared with Other Sulawesi Provinces and National, 2004/2005 Commodity
Area (Ha) Gorontalo
Coconut
56.931
Sulut
Sulteng
Sulbar
271.277
178.381
Sultra
Sulsel
%*
National
n/a
48.050
161.340
3.786.100
1,50
Cocoa
6.433
9.862
174.758
n/a
175.349
210.383
971.728
0,66
Clove
5.108
56.580
45.166
n/a
6.573
46.516
429.935
1,19
Sugarcane
6.801
-
-
n/a
-
10.068
370.064
1,84
Commodity
Product Volume (Ton) Gorontalo
Coconut
61.308
Sulut
Sulteng
Sulbar
292.580
194.504
Sultra
Sulsel
%*
National
n/a
31.842
145.171
3.098.539
1,98
Cocoa
3.552
2.655
148.999
n/a
110.517
167.493
644.245
0,55
Clove
1.366
13.069
14.065
n/a
1.359
18.032
110.507
1,24
35.631
-
-
n/a
-
27.613
2.171.714
1,64
Sugarcane
Source: Dinas Kehutanan dan Perkebunan 2006, BPS Provinsi Gorontalo 2004/2005, Statistik Indonesia 2005/2006. *=% Gorontalo terhadap nasional 2004/2005
Coconut Coconut plantation practically developed almost in the entire Gorontalo Province area. Up to 2006 the plantation area had reached more than 58.9 ha involving more than 65,000 farmer HH. Coconut plantation is distributed across the province, i.e. in Kabupaten Pohuwato (32.4%), Kab. Boalemo (11.5%), Bone Bolango (12.0%) and Kabupaten Gorontalo (47.6%). Gorontalo coconuts have been processed into various products for domestic necessities and export. Copra, rude coconut oil and coconut powder are products already exported from Gorontalo. The products have been the leading export of Gorontalo with the value of US$ 21.75 in 2005, or about 75% of the total export value. Table 3.12 Contribution of Coconut Products in Gorontalo Export (US$) Commodity
2001
2002
2003
2004
2005
% share 2005
Coconut Products
2,199,514
6,432,048
9,501,416
14,992,914
21,709,587
74.55
Other Export Commodities
1,026,697
3,034,325
5,628,633
3,563,751
7,411,220
25.45
Total Export Value
3,226,211
9,466,373
15,130,049
18,556,666
29,120,807
100.00
Source: Dinas Perindag & PM Prov. Gorontalo, Bea Cukai Gorontalo
The export of coconut products in 2005 had reached more than 65,000 ton, a sharp increase from the previous years (2003-2004), which was significantly low (34,000 ton). Despite the low export value in 2003-2004, the export value was increasing from year to year (including 2003-2004). It was evident that during the period the export of copra had decreased, while the export of rude coconut oil, which was more expensive, had increased. In 2005, export of both copra and crude coconut oil increased.
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Figure 3.2 Realization of Coconut Products Export in Gorontalo, 2001-2005 (Ton) 70.000
65.595
60.000 50.000
37.534
40.000 30.000
34.696
24.427 14.992
20.000 10.000
35.136
6.432
21.709
9.501
2.199
0 2.001
2.002
2.003
Volume (Ton)
2.004 Nilai (ribu USD)
2.005 Tahun
Source: Dinas Perindag & PM Prov. Gorontalo, Bea Cukai Gorontalo
From the discussion above, one can perceive that coconut is the leading commodity in plantation sub-sector. More over, coconut fruits of Gorontalo are renown with the larger size than Java coconuts. Cocoa
Although planted only in about 7% of the total plantation area (only 10% of coconut plantation area), cocoa has a better export market opportunity, particularly to Europe and the US. The commodity is one of the high value plantation products. Clove Investment in clove does not very well develop in Gorontalo, and considered as less competitive if compared to Java. As it is widely known that industry-absorbing clove are cigarette factories, which are concentrated in Java. Marketing of clove to Java needs higher transportation and distribution costs. Lower productivity and quality will also cause investment in clove in Gorontalo incompetitive. Candlenut Candlenut is a local commodity which has not been intensively cultured. The production is minor and highly fluctuates. Therefore it is not widely marketed. Sugarcane There is one sugar factory in Paguyaman, Kabupaten Boalemo. The factory has the capacity to absorb all of the sugarcane products in Gorontalo. The sugar produced is particularly marketed to eastern region of Indonesia. Currently the factory is experiencing shortage of sugarcane. To meet its production capacity, the factory tries to expand its plantation area. The investment is in a state of difficulty due to the lack of large and whole land area available in Gorontalo. The forestry and plantation office (Dinas Kehutanan dan Perkebunan) stated that the area potential for plantation was about 180,020 ha. Currently, the plantation area that has not been unutilized is less than 100,000 ha, and this is part of the remaining of the conversion forest land for ’other uses’ as already discudded in Chapter 1. The remainder of the plantation area in Gorontalo is considered much smaller than plantation area available in
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other provinces. This will make utilizing the plantation land available for sugarcane, which is considered as having the low unit product price, is less competitive. Moreover, some part of the plantation land available is already allocated in many small lots, each is traditionally owned by smallholder farmer. Other part is owned by the state with the status of HGU (Hak Guna Usaha) already autorized to many medium to large community plantation entities. With the above mentioned limitation in land availability, development is considered as more potential for smallholders. However, the high production cost due to hilly and steep slope condition of the areas, will also perceivably direct the cultivation activity by smallholders to high-value crops. Therefore, it is necessary for Gorontalo to develop the plantation sub-sector for investment of high-value plantation plants with higher land unit price and good market demand. Beside Cocoa, a plantation commodity with higher value and good market is arabica coffee. Coffee is one of the plantation commodities already widely developed in Gorontalo, although it is from the robusta type. Developing arabica coffee, which is higher in value (23 times of robusta coffee) but needs higher cultivation technology and skill, is possible in Gorontalo. Jatropha Known as fence plant and easily cultivated in almost all conditions of land, even in infertile soil, jatropha currently is also widely discussed because of its potential to be extracted into castor oil, and further utilized as biofuel. Many local governments, including Gorontalo Province, are having intention to extensively develop jatropha for that purpose. However, jatropha cultivation is not beneficial for smallholders due to several reasons, i.e.: (1)
To obtain the economically product scale of biofuel of jatropha needs large area of cultivation, since the jatropha seed price is less than Rp.1,000 per kg.
(2)
Smallholders’ land area is averagely 2.5 ha per HH, and such small lands should be utilized for cultivation of higher value crops.
(3)
Jatropha cannot be processed into other products but biofuel, and therefore is marketable only to biofuel factories. Unless there is subsidy and strong buffer price regulation by the government in corn, smallholder farmers would likely prefer to cultivate other crops with better price and markets.
(4)
With the jatropha seeds price is Rp.50,000 per kg, investment in this commodity would be more benefiting. However, the weak distribution infrastructure of Gorontalo would heighten the transportation cost and weaken the competitiveness of the business in the national market.
Forestry Sub-sector Most part of Gorontalo is forest area, about 67.65% of the total area or 826,378 Ha. The majority of forest covers areas with the slope condition of more than 15% (steep and very steep slopes). Of the total forest area, 43,12% (356,300 ha) is protected forest, natural reserve, preserved forest and national park, and 470,078 ha is production forest.
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Table 3.13
Forest Area and Utilization
Utilization
Nmber of Polygon
Natural Reserve
Area (Ha)
%
5
47.309
5,72
Protected Forest
75
164.400
19,89
Permanent Production Forest
21
92.190
11,16
Conversed Production Forest
11
24.480
2,96
Limited Production Forest
13
353.400
42,76
1
34.599
4,19
1
110.000
13,31
219
826,378
100,00
Preserved Forest Nantu Bogani Nani Wartabone National Park Total Forest Area Source: Dinas Kehutanan dan Perkebunan Prov. Gorontalo
All production forests are mostly held by 6 HPH (each with area ranging from 21,000 – 270,000 ha). None of those is active any more and 2 had already returned back for further management to Dinas Kehutanan of Gorontalo Province. Utilization of forest area for other uses is hindered by the HPH status. Such idle forests are potential for development of high value forest crops.
Table 3.14 HPH Holders in Gorontalo No
Company
Area (Ha)
Status
1
PT. Centralindo Pancasakti
25.200
Already returned
2
PT. Inimexintra
50.500
Already returned
3
PT. Wenang Sakti
268.000
Non Active
4
PT. Sapta Krida Kita
50.000
Non Active
5
PT. Gunung Latimujong
21.500
Non Active
6
PT. Taiwi III
55.000
Non Active
Source: Dinas Kehutanan dan Perkebunan Prov. Gorontalo
Forestry products are dominated by wood (log and processed timber) and rattan. Nonwood and cultured wood products have not developed, while natural wood is less sustainable due to the stable decreasing of extracting area. It is also the case with rattan, the production is also decreasing due to the less and less forest area available because of uncontrolled timber logging. Lesser and lesser forest wood products were felt in 2004, after 2 years of intensive exploitation of forest. Table 3.15 Forest Products in Gorontalo Province (m3), 2001-2005 Year
Log
Processed
Rattan
2001
12,210.78
2,459.30
4,240.00
2002
17,681.77
17,481.65
9,930.00
2003
3,709.80
31,790.00
12,241.26
2004
2,512.55
16,331.5
4,124.93
2005
10,939.97
7,165.67
7,306.51
Source: Gorontalo dalam Angka 2004/2005
Beside decreasing of product volume, contribution to national log and sawed timber products of Gorontalo is very minor (0.1-0.4%).
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Table 3.16 Forest Wood Production of Gorontalo Province and National (m3), 2001-2004 Gorontalo
Year
Log
National
Saw Timber
Log
% Total
Saw Timber
2001
12.211
2.459
10.051.481
674.868
0,14
2002
17.682
17.482
8.659.968
623.495
0,38
2003
3.710
31.790
11.423.501
762.604
0,29
2004
15.086
1.633
13.548.938
432.967
0,12
Source: Gorontalo Dalam Angka 2004/2005, Statistik Indonesia 2005/2006,
With limited forest area, Gorontalo needs to optimize its forest products and more focus on non-wood products or cultured wood, which are higher in value and more sustainable. Development of such products, however, should comply with the land potential and also needs to consider the better market demand. Mulberry, jatropha and super teak are among other possibilities of producing high-value forest products. Mulberry for producing of silk, which has good international market, jatropha for producing of biodiesel; and super teak wood has very good price both in national and international markets.
Animal Husbandry (Livestock) Sub Sector This sub-sector contributed appropriate share to the province’s GRDP, about 4.5 % of the total province GRDP (2005) or 15.5% of GRDP of Agriculture. The share was almost similar with Fishery. In the last 6 years the sub-sector increased 9.3% per year, higher than the annual increase rate of Agriculture Sector (6.1%). Livestock business is largely carried out by households. It is also limited mostly to the subsystem of on-farm culture, while the upstream and downstream subsystems are in the hand of traders and businesspersons. This has resulted in the less value added obtained by the farmers. Large livestock farming of cows and goats dominates animal farming activities in Gorontalo. Cows already become common commodities, mostly sent to East Kalimantan (Tarakan) and other provinces. Goats are only for local consumption, although already sent to Manado but in very small portion, about 1% of the population. Table 3.17 Population of Large Livestock (2001-2005) No
Description
2001
2002
2003
2004
2005
Annual growth
1
Cows
159,334
163,747
174,460
201,678
205,993
6.6%
2
Goats
82,931
92,811
137,879
92,944
86,533
1.07%
3
Pigs
8,432
7,622
16,355
10,020
7,711
-2.21%
Source: Dinas Peternakan dan Kesehatan Hewan Provinsi Gorontalo
Gorontalo cows mostly consist of PO (Peranakan Ongol / Ongol origin) and Bali cows, with HH ownership ranging between 2-10 heads. Such business used to be only for side economic activity of households. No indication so far that livestock business in Gorontalo will develop into economic business scale. Compared to other Sulawesi provinces, growth of beef cattle population in Gorontalo was better.
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Table 3.18 Cows Population of Gorontalo Province and Other Sulawesi Provinces (Head), 2001-2005 Province
2001
2002
2003
2004
2005
Annual avg growth
Gorontalo
159.334
163.747
174.460
201.678
205.993
6,76
North Sulawesi
132.514
134.396
124.262
98.741
118.931
-1,55
Central Sulawesi
231.489
231.997
194.099
197.692
187.514
-4,85
Southeast Sulawesi
300.451
300.451
208.227
208.740
213.840
-7,00
South Sulawesi
722.452
751.277
737.538
627.981
594.316
-4,51
Source: Dinas Peternakan dan Kesehatan Hewan Provinsi Gorontalo
Actually cows demand from Gorontalo to other regions is appropriately high. Population of cows in 2005 was 205,993 heads, increased annually 6.76% in the last 5 years. Nationally, cow population growth in the same period was decreasing annually 1.24%. However, such population growth was not comparable to the annual demand increase, which was 12% (inter-insular trade) and 27% for domestic slaughtering. The opportunity to develop intensive and economic scale of cow farming in Gorontalo is also possible, considering that the need for eastern Indonesia regions is large enough. The supply should be conducted through Makassar. In the year of 2007 animal farming sub-sector will be a priority of the province government, and meat is expected to be one of the leading products of the province, complementary to corn and fish. Poultry farming of both local and hybrid chickens also develops to produce eggs (layers) and meats (broilers). Majority of poultry products, however, are still for local need and the outside region market for this business does not develop very well. Beside, other regions are also developing this business for region markets theirself. Table 3.19 Poultry Population in Gorontalo Province (2001-2005) Commodity Local chickens
2001
2002
2003
2004
2005
771,644
803,319
792,482
873,074
983,069
NA
66,295
11,200
123,646
112,127
Layers Broilers
NA
9,626
197,874
438,468
379,497
Ducks
NA
43,479
49,331
56,095
40,307
Source: Dinas Peternakan dan Kesehatan Hewan Provinsi Gorontalo
3.2.3 Opportunity and Limitation of Agriculture Main Products From discussion on the general performance and competitiveness of the main agriculture sector products above, several potential commodities are selected for prospective and better investment opportunity. Assessment of the opportunity and limitation of the potential commodities will be presented in the followings.
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a. Corn Opportunity of Corn Primary Product As the main product of food crops, corn has been the commodity widely cultivated in Gorontalo since long. Total cultivation area in 2005 was 107.752 ha, with average annual growth 31.0% in 2001-2005. Individual cultivation area was 0.5–2.5 ha per HH, with the productivity 3.72 ton/Ha) in 2005, representing an increase of 4.9% from 2004. The cultivation area is widely spread across the whole province area. From the production size, the corn production was mostly in Kabupaten Pohuwato (47.2%), Kabupaten Boalemo (26.9%) and Kabupaten Gorontalo (24.2%). Distribution based on the harvest area was in Kabupaten Pohuwato (38.7%), Kabupaten Boalemo (25.5%) and Kabupaten Gorontalo (33.3%).
Table 3.20 Development of Total Cultivation Area, Harvest Area, Productivity and Export of Corn (2001-2005). No
Description
1
Harvest area (Ha)
2
Productivity (Ku/Ha)
3
Production (Ton)
4
Export (Ton)
2001
2002
2003
2004
Annual avg. Growth
2005
36,610
45,718
58,716
72,529
107,525
30.9%
22.32
28.49
361.34
34.64
37.20
13.6%
81,720
130,251
183,998
251,223
400,046
48.7%
6,300
6,700
18,950
12,310
35,960
54.6%
Source: Dinas Pertanian dan Ketahanan Pangan Provinsi Gorontalo
Corn produced in Gorontalo has been the commodity widely renowned in several countries, such as Japan, the Philippines, Malaysia, South Korea, and Singapore. Gorontalo corn product is also considered as having the appropriately high export quality. World demand for corn increases with attractive market price. Total export in 2005 was 35,960 ton representing 8.9% of the total production in 2005, with annual growth of 54.6% in 2001-2005. It is therefore that corn production continuously increases to answer the export and domestic need demands. Nationally, fulfillment of corn consumption needs additional corn import. This indicates that the market for corn is still widely open. Corn import volume within the period of 2001-2005 exceeded 1 million ton annually, with the value of more than US$ 150 million. Table 3.21
Development of Corn Import in Indonesia (1999-2004)
Description
2000
2001
2002
2003
2004
2005
Volume (Million Ton)
1,24
1,03
1,15
1,37
1,12
na
National Production (Million Ton)
9,68
9,35
9,65
10,89
11,23
12,01
% of Import to National Prod. Import Value (US$ million)
12,78
11,04
11,91
12,59
9,93
-
150,02
121,99
132,56
177,23
189,14
na
Source: Departemen Pertanian RI, Diolah MCI 2006.
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Although there was a decrease of corn import more than 18% in 2004, the import value increased about 6.7%. This was due to the corn price tended to increase significantly. Figure 3.3 Development of imported corn price in Indonesia (1999 – 2004) 200,0 169,6
Price US$/Ton
160,0 120,0
118,2 121,1
115,3
129,3
121,3
80,0 40,0 0,0 1999
2000
2001
2002 Year
2003
2004
Source: Departemen Pertanian RI, Diolah MCI 2006.
Shown from the graphic a tendency of increasing price of imported corn, particularly in 2003. The price jumped from US$ 115.3 per ton in 2002 to US$ 169.6 per ton in 2004, meaning there was a 47.1% of price increase within 2 years. Therefore, the opportunity to develop corn in Gorontalo both for domestic and export needs. Increase of corn production, parallel with improvement of quality through cultivation utilizing hybrid corn seeds, will definitely good prospect for investment. Currently, about 70% of corn cultivation utilizes hybrid seeds. There are several types of corn cultivated in Gorontalo, namely: ° ° °
Motor (local consumption), about 7.2% of the total production in 2005; Composite/Lamoro (local and export), about 19.5% of the total production in 2005; and Hybrid (local and export), about 73.3% of the total production in 2005.
The province government is eager to promote Gorontalo as corn center of the country. Several policies were established to encourage higher corn production to realize the province to be the corn center of Indonesia: °
Regulation of buffer pricing for corn through the Governor Decree (SK Gubernur) No. 119/2006, that the minimum corn price would not lower than Rp.800/kg.
°
Extensive international promotion campaign to invite international buyers.
°
Expansion of cultivation area through conversion of HGU lands to corn production lands.
°
Long-term program to produce biodiesel from corn.
°
Development of Maize Center for the research and development of corn in Gorontalo. The objective is to increase corn production, including processing possibilities of corn.
°
Integral development of corn, agroindustry in corn and other related processing industry and sub-sectors (animal feed industry, cows farming, etc). A kind of pilot projecting of the program is already underway, namely KIAT (Kawasan Industri Agro Terpadu) in Kabupaten Bone Bolango.
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Limitations of Corn Primary Product Corn development is facing a problem of limited large land availability. Available land used to be fragmented in small sizes own by smallholders, and on hilly locations. Investment in corn production for larger industrial products needs a large, areal coverage with less sloping land. This kind of land is where mechanized cultivation of corn possible. Therefore, with such land limitation in Gorontalo, agriculture development is still possible to succeed through the utilization of each land available for smallholder farming. Lands with steep slope can also be utilized through terrace system. For large investment business, however, such land constraint is not suitable. Generally speaking, it is difficult to develop large and intensive corn production in Gorontalo. A program of 1 million ton corn production in 2010 has been declared by the province government. The program should involve every kabupaten and kota to participate, and already planned with the phasing as shown in the table below. Table 3.22 Phases of Corn Production Program in Gorontalo 2006 – 2010 Cultivation Area (Ha) Kabupaten/ Kota
2005
Kota Gorontalo
Additional Product (Ton) 2006
255
354
Gorontalo
97,240
Boalemo
108,094
Pohuwato
187,850 6,606 400,045
76,521
Bone Bolango Province
2007
2008
2009
2010
827
1,450
2,006
2,550
34,442
84,107
135,428
202,570
305,750
8,190
41,824
80,228
118,411
147,000
31,985
91,001
175,778
344,345
465,750
15,495
41,364
88,882
149,237
210,000
221,895
401,770
632,255
942,050
Source: Dinas Pertanian dan Ketahanan Pangan Provinsi Gorontalo
Realization of the program will likely face a problem of land availability. To achieve the targeted 1 million ton of corn, extension of cultivation land up to 300,000 ha, about 25% of the province total area, is needed. This means that additional land about 188,000 ha should be provided for the program. Table 3.23 Phases of Cultivation Area Expansion in Gorontalo 2006 – 2010 Cultivation Area (Ha) Kabupaten/ Kota Kota Gorontalo
Additional Area (Ha)
2005
2006
2007
2008
2009
2010
44
80
180
310
410
510
Gorontalo
30,381
7,780
18,300
28,950
41,400
61,150
Boalemo
23,262
1,850
9,100
17,150
24,200
29,400
Pohuwato
35,360
7,225
19,800
37,575
70,375
93,150
2,279
350
900
1,900
3,050
4,200
91,326
17,285
48,280
85,885
139,435
188,410
Bone Bolango Province
Source: Dinas Pertanian dan Ketahanan Pangan Provinsi Gorontalo
Looking at the land condition, land use and land already utilized currently, land expansion for 1 million ton corn production in 2010 will involve utilization of forest and land with steep
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sloping condition, or conversion of other uses, such as plantation and other agricultural uses, into corn cultivation area. Aside of that, the available farm skillful workers will also be serious hindrance. Assuming that the total labor engaged in agriculture sector in 2005 (about 165,000 people) cultivate corn, they will only produce about 650,000 ton, To achieve the product target 1 million ton in 2010, about 300,000 corn farming workers are needed, except that cultivation is performed through mechanization. Mechanization in corn cultivation, however, needs large, whole and less sloping area, which is relatively limited in Gorontalo. Despite the above constraint, it should be acknowledged that agriculture development with corn as prioritized product in the period of 2001-2005 had shown a remarkable result. In the near future, however, further realization of corn product development needs additional and improved infrastructure, particularly concerning export facilities. The current seaports need various improvements, especially in their loading and unloading capacity. Corn export volume will increase in a somewhat stable and high growth rate inclination, and may exceed the production increase. The high increase of corn export is possible if Gorontalo functions as corn collection point from the surrounding areas, and export the commodity through Gorontalo seaports. With this, 15% of annual export growth may be achieved. It should be noted, however, that such projection has not considered world market situation and competition from other corn production centers (such as North Sumatra, Lampung, Jambi, East Java and NTB).
Estimation of Export Volume (Ton)
Figure 3.4 Estimation of Corn Export Volume from Gorontalo 2007 – 2010* 80,000 70,000
65,000
48,000
50,000 40,000
71,000
57,500
60,000 35,960
41,000
30,000 20,000 10,000 0 2005
2006
2007
2008
2009
2010
Year Tahun Source: MCI Calculation, 2006; * has not considered world market situation and national competition
Actually there are large and whole lands available in Gorontalo. However, such lands used to consist of small lots owned or managed by smallholders for agriculture or plantation, mostly for coconut, super teak and other plantation products cultivation. Development of KSO (Kerja Sama Operational) or Plasma-Inti Partnership Scheme may not be easily developed without facilitation from government, because smallholder farmers tend to prefer short-term cooperation. Cooperation with BUMD may provide long-term corn price assurance, provided that the price established is competitive enough if compared to other provinces. The corn production so far is still limited in primary sector. Processing to secondary phase of production is still minor in scale. One of the reasons is the distribution access of
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Gorontalo has not appropriately developed, and considered as not competitive for domestic and national markets. Recommendation Because of the existing distribution access facilities of Gorontalo are less developed, preferably the corn production should be more focused to primary products. Such primary corn product supports the need for raw corn material in the production centers in other regions, particularly to Makassar or directly going for export to East Asia countries. However, less available of large, whole and less sloping land hinders investment in largescale primary production of corn. Therefore, development of corn cultivation through partnership with corn smallholders would be beneficial. Facilitation from local government also important to secure a longer term participation business is established. Investment in secondary sectors of corn such as maize, corn oil, corn sugar and animal feeds could be prospective if the processing products are oriented for export. For national market, with the consumption centers in Java and Sumatra, the main constraint would be the high transportation cost due to inadequate distribution facilities of Gorontalo. Production of biofuel from corn, which needs 10 kg of corn for 1 L of ethanol, is not considered as competitive. Ethanol industry needs large scale corn cultivation, which is not unlikely in Gorontalo.
b. Coconut Opportunity in Coconut Primary Production Total plantation area of coconut was 57,031 ha in 2005, with production of more 61,000 ton, The commodity has the largest plantation area in Gorontalo. Coconut plantation involves about 44,000 farmer HH, constituting 18% of the total HH of Gorontalo. Coconut is strategic commodity for Gorontalo people and had been cultivated for generations. The average coconut cultivation area is 1.2 ha/HH. Table 3.24 Cultivation Area, Production and Productivity of Coconut in Gorontalo, 2005 Kabupaten Bone Bolango
Total Area (Ha)
Farmer (HH)
Production (Ton)
Productivity (Kg/ Ha)
6.860,94
5.337,00
1.523,94
1.257
28.125,89
24.508,00
31.985,99
2.104
Boalemo
8.910,18
7.047,00
7.752,21
1.425
Pohuwato
13.033,88
7.501,00
21.765,31
2.174
Total
56.930,89
44.393,00
61.308,36
1.740
Gorontalo
Source: Dinas Kehutanan dan Perkebunan (2006)
Based on the potential area for coconut development in 2003 and available cultivation area in 2005, it is estimated that the remaining area potential for coconut development is 48,000 ha. Such area is considered as appropriate enough for investment in coconut if the land available is large and whole, and located in non-hilly or less steep sloping. Coconut
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
cultivation needs relatively long time, since coconut will produce after years since its planting. Some of coconut fruits are processed by the people to produce copra and sent to coconut oil factories in Bitung, and recently to new factory in Gorontalo. Coconut plantations in Gorontalo have been tied in cooperation scheme with the coconut oil factories. Coconut also produces coconut shells to produce carbon active to supply various industries in Manado. Other products include rude coconut oil and coconut powder. Coconut product export had reached 75% of the total province export value in 2005.
Limitations of Coconut Primary Product Development of hybrid type coconut has not been successful in Gorontalo, because not all land types are suitable. Besides, the farmers’ skill needs to be improved to do this. As it was the case in North Sulawesi, the hybrid coconut cultivation had experience the product degradation both in size and quantity due to unsuitable land condition. Average annual production growth in Gorontalo was about 0.7% (2001-2005). This indicates the slow rate of replanting of coconut, since coconut trees are mostly developed by smallholders. The low intensity of replanting will definitely affect sustainability in the supply of raw material for its secondary products. Also the current cultivation of coconut by smallholder is not intensively oriented as business commodity, more as consumption or family economic saving. Moreover, coconut of Gorontalo is facing its competitors, especially North Sulawesi with larger cultivation area, Total cultivation area in Gorontalo is only about 1/5 of that in North Sulawesi. Development of coconut fruit in Gorontalo, due to less developed distribution access infrastructures of the province. The largest consumer and processing industries are concentrated mostly in Java, while coconut production of the whole Sulawesi focuses only to Bitung oil factory. Land available also in fragmented and small sizes already owned or managed by smallholders. They are widely spread over the province area. Many of the small size lands are located in areas with medium to high slope, and not accessible by transportation vehicles. This would heighten the production cost, particularly in transportation. Unlike ‘high-value crops’, coconut fruit is heavier that the ratio of transportation cost to its low product price (Rp.800 – Rp.1,000 per unit) is higher.
Recommendation Considering the limited land available, development of investment in coconut is not competitive due to the need of large cultivation area to obtain large products to be economic. It is therefore that investment in coconut cultivation development is considered as marginal. However, opportunity still opens for coconut cultivation by smallholders, which should be followed by the development of secondary industries. Rejuvenation of old and unproductive coconut trees with hybrid coconuts should also be administered in carefully selected suitable areas. Based on the above findings, large opportunity opens in the utilization of primary coconut product into the production of secondary product. Rejuvenation of old coconut trees will produce coconut wood, which can be processed for furniture material. Processing of
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
coconut fruit into copra, cooking oil, nata de coco, coconut powder, coconut skin fiber and carbon active will be discussed separately in Sub-chapter 3.5 (Processing Industry).
c. Cocoa Opportunity in Cocoa Primary Production The total cocoa area in 2005 was more than 6,400 ha involving more than 7,000 of farmer HH. Average cultivation land was 0.9 ha/HH. Long experience of cocoa production at several locations, such as in Pohuwato, where the cocoa production is the largest. Table 3.25 Cocoa Plantation Area by Plant Condition in 2005 Kabupaten Bone Bolango Gorontalo Boalemo Pohuwato Total
Area Size (Ha) TBM
TM
TT/TR
Number of Farmers (HH)
TOTAL
662,41
728,10
-
1.390,51
1.832
1.299,27
611,10
66,50
1.976,87
2.048
507,06
371,90
77,50
956,46
757
422,72
1.358,62
327,82
2.109,16
2.502
2.891,46
3.069,72
471,82
6.433
7.139
Source: Dinas Kehutanan dan Perkebunan 2006
Cocoa production was 3,972 ton in 2005, less competitive if compared with other provinces, such as Central Sulawesi and South Sulawesi. However, cocoa productivity is higher than the two provinces and average national figure. Among kabupatens in Gorontalo, Pohuwato and Bone Bolango are where cocoa productivity is higher than other kabupatens. Table 3.26 Production and Productivity of Cocoa in Gorontalo and Other Sulawesi Production Centers, 2005 Kabupaten/Province
Production (Ton)
%*
Productivity (Kg/ Ha)
Bone Bolango
728
20,49
1.237
Gorontalo
316
8,91
518
Boalemo
124
3,48
367
Pohuwato
2.385
67,15
1.755
Gorontalo
3.552
0,55
1.157
Central Sulawesi
148.999
23,13
766
SouthSulawesi
179.522
27,87
1 027
National
644.245
1.109
Source: Dinas Kehutanan dan Perkebunan 2006
Cocoa seeds utilized in Gorontalo are of the hybrid type F1 purchased from the Research and Development Center for Cocoa in Jember in cooperation with PT Khasponkmadongeng. Strong support from the local government realized through training practices of sarungisasi (production of 40 fruits/tree). A hybrid seed production area (5 ha) is already available in Kecamatan Tapa in Bone Bolango.
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Cocoa production centers will be provided in each kabupaten, where large scale traders communicate with the centers directly. Information networking will also be available between kecamatan offices with the centers. Sulawesi is the largest contributor (50%) to national cocoa production. This is because the land is suitable for cocoa, while experience in cocoa culture already develops since long, such as in Gorontalo, particularly in Pohuwato. About 42,000 ha of land is estimated available for the further development of cocoa. This is a part of total plantation area (less than 100,000 ha). Considering utilization of other plantation products, land available may less than the estimation above. From the land area point of view, investment in the expansion of cocoa plantation is possible. However, it is better that such investment is administered in larger and whole area for more economic result.
Limitations of Cocoa Primary Product Strong competition in cocoa development will come from Central Sulawesi, where the total plantation area is more than 1 million ha, out of it about 300,000 ha is allocated for cocoa. Cocoa cultivation area of Gorontalo currently is only about 0.65% of the total national cocoa plantation (980,000 ha). National cocoa export contributes very large to the total export of national agriculture products. In 2005, the contribution was more than 16%. Even in 2002 the figure was 20% (US$ 521 million), while the previous year’s contribution was 11.36%. Table 3.27 Share of National Cocoa Export to National Agriculture Product Export (US$ million) Year Cocoa beans
2001
2002
2003
2004
2005
277
521
410
370
468
Total Agriculture
2439
2.568
2.526
2.497
2.880
% Contribution
11,36
20,29
16,23
14,82
16,25
Source: Central Board of Statistics (2006)
Global market for Indonesian primary cocoa product is more sustainable than the secondary products. Currently Indonesia is the third largest world cocoa supplier after Ghana and Ivory Coast. Unfortunately the cocoa product quality of Indonesia is not stable, even in recent years showed decreasing price in the global market. This is largely because of most of cocoa production is conducted by smallholders. The low quality of Indonesian cocoa products had resulted in price cut of about 15-20% in the US markets. Meanwhile, cocoa from Ghana is excellent in quality and therefore the price is premium. Market orientation dominated by the US has not affected improvement of cocoa quality in Indonesia. Cocoa product of Indonesia is imported to the US and used to be blended with Ghana or Ivory Coast cocoa. Export of Indonesian cocoa is mostly (90%) in beans, with main destination to the US (80%). Similarly in Gorontalo, buyers tend to ignore cocoa quality. This has resulted in the ignorance of farmers to the need of cocoa quality improvement. Main sale orientation of
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Gorontalo cocoa is Palu (Central Sulawesi), with fluctuative price around Rp9,000 to Rp.10,000 per kg. Cocoa cultivation also needs large and whole area, and skillful farmers. The fact shows that typical cocoa farmer is less productive and weak in maintenance. Several cocoa production centers already conduct human resource development program, such as in Marissa in Pohuwato. Unfortunately, the center government policy to levy VAT (value added tax) for cocoa secondary products is judged as counterproductive. This has affected the slow development of secondary cocoa industry. Most of European countries and the US prefer to import cocoa beans for their secondary industries. Other constraint is pests and diseases, particularly a kind of cocoa driller insect. Phytophtora disease also causes significant product loss. Cocoa pest and disease management should be developed among farmers to cope with the problem.
Recommendation Cocoa is includes as ‘high value crops’. Investment in the development of primary cocoa products to produce cocoa high quality cocoa beans is considered prospective. However, improvement of the farmers’ skill is needed to support the success of yhe investment. Average production area in Gorontalo may fall around 50 ha per project, located in the already allocated for cocoa plantation development. Large and whole plantation area is unlikely available. Investment in cocoa secondary products is also unlikely, except in the fermentation of cocoa beans to fill the export demand in European countries and Japan. Although in the future development of secondary product of cocoa (butter and powder) is potential if international market tastes are met.
d. Arabica Coffee Opportunity in Coffee Primary Production Coffee is also one of the Gorontalo plantation products already widely cultured, although mostly of the robusta type. About 1,300 ha of coffee plantation area has developed in 2005, with the largest portion being in Kabupaten Gorontalo and Kabupaten Bone Bolango. A number of 1,400 HH participate in the coffee plantation business, each with an average 0.92 ha of crop cultivation area. Table 3.28 Cultivation Area of Coffee Plantation in Gorontalo,, 2005 Kabupaten Bone Bolango
Area (Ha) TBM
TM
TT/TR
91,10
351,33
Gorontalo
93,00
Boalemo
13,00
Pohuwato Total
Farmer HH
Total
68,70
511,13
452
506,63
49,95
649,58
774
37,40
24,50
74,90
95
28,15
85,70
-
113,85
141
225,25
981,06
143,15
1.349,46
1.462
Source: Dinas Kehutanan dan Perkebunan (2006)
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Production of coffee in 2005 was more than 1,400 ton, about 0.12% of the national product (630,000 ton). Productivity in Gorontalo was 735 kg/ha, higher than national productivity (620 kg/ha). Bone Bolango and Boalemo are where the productivity is higher than other kabupatens. Table 3.29 Production and Productivity of Coffee Plantation in Gorontalo, 2005 Kabupaten
Production (Ton)
%
Productivity (Kg/ Ha)
Bone Bolango
318,65
44,19
907
Gorontalo
315,63
43,77
623
Boalemo
34,82
4,83
931
Pohuwato
52,06
7,22
574
721,16
0,11*
735
Gorontalo National
634.893
620
Source: Dinas Kehutanan dan Perkebunan Prov. Gorontalo (2006), Statistik Pertanian 2005, * terhadap angka nasional
Good development of robusta coffee in Gorontalo opens the chance for the development of Arabica coffee, which is higher in economic value. Arabica coffee is include as a ‘high value crops’ with requires more care in cultivation with the limitation of availability land for larger scale plantation, Arabica coffee can gains significant benefit to grow in smaller and fragmented area by smallholder. Much better than other low value crops like : coconut, corn, etc. Currently, arabica coffee has not been known in Gorontalo plantation community, while other Sulawesi provinces, particularly South Sulawesi, the commodity has been the leading product. South Sulawesi is the fourth largest Arabica coffee producer nationally, after East Java, North Sumatra and Aceh. Although Gorontalo competitiveness is less compare to other silk leading producer, market for this commodity is promising and wide open either for national consumption are export. Table 3.30 Area (Ha) and Production (Ton) of Arabica Coffee in Main Producer Provinces in Indonesia, 2003-2005 Province
2003 Area
2004 Prod
Area
2005 *) Prod
Area
Prod
Nanggroe Aceh D.
24 899
15 780
24 928
16 405
24 998
16 450
North Sumatera
20 516
12 184
20 516
13 203
20 516
13 203
East Java
13 482
5 698
13 184
5 698
13 482
5 698
South Sulawesi
16 876
2 819
13 482
2 925
13 184
2 925
Bengkulu
2 846
995
2 526
2 525
5 209
2 526
National
99 393
43 356
110 416
46 985
110 486
47 030
Source: AEKI (2005), *) Temporary Figure
Various Arabica coffee products are widely renowned in the world market, such as Java coffee, Toraja coffee, Gayo coffee, or Bali coffee. Gorontalo should switch its coffee plantation from Robusta to Arabica. There is no different land and soil requirement between the two coffees, except that Arabica coffee needs more careful plantation technology. Besides having stronger world market demand, Arabica coffee is higher in value.
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
About 2 ton of dry Arabica coffee seeds can be produced from 1 ha of plantation, although the average productivity by smallholders in 2003-2005 was only about 0.8 ton/ha. Regular Arabica coffee price would range about Rp.9,000 to Rp.12,000 per kg, but per kg of gourmet arabica coffee (Toraja, Kalosi or Kintamani) would reach Rp.35,000.
Limitations in Coffee Primary Production Arabica coffee needs more intensive effort than robusta coffee, it also more fulnerable to pests and diseases. This commodity has not been known widely in Gorontalo. Robusta coffee, although already widely cultured in Gorontalo, is not the leading commodity there. However, to increase the output value of the plantation land in Gorontalo, introducing arabica coffee among farmers in Gorontalo could be strategic way to go in the agriculture competitiveness (in value) from limited available of land of Gorontalo. Estimated of land available for coffee plantation is about 6,200 ha, land area considered as very small economically. However, if such land is utilized for arabica coffee development (higher in economic value), the available area would be appropriately large and more beneficial for coffee farmers. Nationally, export of arabica coffee in 2001-2005 increased continuously, with destination to developed countries (USA, Japan and Germany). Other coffee, however, is showing fluctuation of export volume. Robusta coffee export decreased significantly in 2002/2003, but increased again in the years followed. Table 3.31 Development of National Coffee Export in 2001 – 2005 Type
2001/2002
2002/2003
2003/2004
2004/2005
Arabica
38 660
39 300
43 858
52 929
Robusta
205 048
166 556
257 218
343 764 105
Roasted
12
0
11
Soluble
3 255
0
0
0
Others
11 872
10 204
12 129
13 416
258 849
216 061
313 218
410 215
Total Source: AEKI (2005)
Export value for all types of coffee also increasing. Nationally, coffee export contributed good portion to the export value of agriculture products. In 2005 the contribution was 17% (US$ 498 million). Table 3.32 Share of Coffee Export Value to Agriculture Products Export Value, Nationally (US$ Million) Year Coffee
2001
2002
2003*
2004
2005
183
219
201
282
498
Total Agriculture
2439
2.568
2.526
2.497
2.880
% Contribution
7,50
8,53
7,96
11,29
17,29
Source: Central Board of statistics (2006)
Arabica coffee market is mostly for people with medium and upper economic capacity. Traditional export destination countries are the USA, Japan, and Western European countries. However, recently export destination already expanded to Eastern European countries (Russia and other ex-Soviet Union countries).
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Recommendation Investment in plantation products in Gorontalo should be oriented to high-value commodities. Arabica coffee is one of those, due to higher price and more conducive global market as compared to other commodities, including Robusata coffee, which can be developed in small scale scheme. World market for Arabica coffee is more stable than robusta, with a high price particularly for a gourmet quality coffee. The market also attractive in upper level national consumption particularly for its processing products. Development of arabica coffee plantation is therefore proposed as one of the prospective investment opportunities in Gorontalo.
e. Mulberry/Silk Culture Opportunities Silk business is high-value industry, but not well developed in Indonesia. Production of silk is relatively low and very fluctuative. Potential for development, however, is appropriately well in several regions, including in Gorontalo. Mulberry for silk cocoon culture easily grows, even in hilly and mountainous lands, and does not need large and whole land area. It also be grown in a system of intercropping with other trees, such as coconut and superteak trees. Gorntalo is very much suitable for mulberry plantation. Silk is not significantly developed in Gorontalo, unlike in South Sulawesi and Central Sulawesi (with similar geomorphological condition) as national leading (60%) producer of silk. It is prospective opportunity for Gorontalo considering that new development of murberry farm for silk culture are currently growing in Bitung, North Sulawesi. Table 3.33 Provinces as Silk Main Producer in Indonesia, 2002-2004 No
Province
1
West Java
2
Central Java
3
DI Yogyakarta
4
East Java
5
South Sulawesi Other Provinces Total
2002 Ha
2003 Ton
Ha
2004**) Ton
Ha
Ton
2.992,00
18,51
2.992,00
10,24
2.992,00
4,07
941,25
15,9
941,25
11,75
941,25
6,06
483,5
1,1
495,2
1,02
495,2
0,99
540
5,12
540
3,13
540
0,03
6.037,65
46,01
4.216,25
59,25
4.184,50
37,47
1.206,50
4,20
1.206,50
3,38
342,00
6,68
12.200,90
90,84
10.391,20
88,77
9.494,95
55,3
Source: Direktorat Jenderal Rehabilitasi Lahan dan Perhutanan Sosial RI **Up to July 2005
Global market demand is high and keeps increasing. Export volume of silk yarns wss also increasing in Indonesia, before sharp jump in 2004. Between 200 and 2003 export volume was less than 100 ton, while in 2004-2005 the silk export volume already reached 3-digit figure. Most of the cocoon, however, was still imported. This indicates the need for more cocoon production in the country.
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Silk contribution in the textile global market is actually small (less than 0.2%), but the silk trade value may as high as 20x of the cotton value. The silk end products involve multi billion businesses, distributed along the catwalks in Paris, Milan, New York and London. Indonesia silk export value also increased stably, especially in 2004 when sharp increase continued until 2005. It is estimated that export of silk products (yarn and textile) will also increase in the following years, parallel with the global consumption. Figure 3.5. Export Value Trend of Indonesian Silk Export Value (1000 USD) 10.000 359
567
2001
2002
9.774
9.951
2004
2005
786
100
1 2003 Year
Source: Deperindag (2006) dan Kompilasi MCI (2006)
Other producer countries, such as Japan and South Korea, already left the sector, and the silk product volume of China and Thailand tends to decline. The stronger affordibility of China people had shifted the part of silk export to domestic market, and hightech industrial development force is felt so powerful that silk industrial in Japan, Korea and Thailand in a somewhat ignored situation. Such situation should be considered as opening of opportunity for silk business development in Indonesia, including Gorontalo as well. Figure 3.6 Silk Yarn Production Trend in Indonesia in Indonesia 1992-2004 Production (Metrix Ton) 200 150 100 50 0 1992
2000
2001
2002
2003
2004
Year
Source:: CIC (1999) FAO (2003) Direktorat Jenderal Rehabilitasi Lahan dan Perhutanan Sosial RI dan Kompilasi MCI (2005). * Angka dari produksi cocoon nasional
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
In such silk situation in Indonesia, which is paradoxical with the incresing silk global market, including the price, the central government through its 3 ministers (Industry, Forestry and Cooperative) in 2005 had jointly agreed to facilitate the national silk industry. Table 3.34 Silk Contribution in Export Value of Textile Products in 2001-2005 (USD) Year
Silk
Non Silk
Total
% Silk Contribution
2001
359.032
7.674.991.605
7.675.350.637
0,005
2002
567.000
6.887.893.586
6.888.460.586
0,008
2003
785.918
7.050.192.439
7.050.978.357
0,011
2004
9.774.014
7.637.559.462
7.647.333.476
0,128
2005
9.951.106
8.581.786.891
8.591.737.997
0,116
310,50
3,20
3,23
Trend %
Source: Deperindag (2006) dan Kompilasi MCI (2006)
Majority of silk yarns used for silk business (garments, batik etc) in Indonesia are still from import. Cocoon for production of silk yarn and textile are also imported. Averagely, every 1 ha of mulberry cultivation would produce leaves that can be fed to silk worms, which further produce about 3-4 boxes of silk cocoons worth Rp.44,000 per box. With a harvest frequency of 4-5 times every year, per ha mulberry cultivation land can produce 450-600 kg of silk cocoon or 66-90 kg of silk yarn. Ideally, per culture period (2530 days) every box would produce 25-30 kg of silk cocoons with medium to good quality. This will produce annual production of 750-1,000 kg. Cocoon price per kg in the domestic market in 2006 was about Rp. 20,000, and the lowest price of yarn is Rp. 200,000 per kg, and silk textile is Rp.70,000 per m2. Processing of silk is environmentally friendly, less use of chemical, and no insecticide. Main substance of silk material is protein with composition very similar to human skin, something that makes silk different from other fiber materials.
Limitations Mulberry business is not quick yielding, and cocoon culture needs high discpline, things that unattractive to regular farmers. Such business is less attractive if compared to cocoa (in South Sulawesi) and horticulture (in West Java). But silk products are much higher in financial value, and therefore prospective for investment in Gorontalo. Gorontalo has no spinning industry background to support the development of silk. However Gorontalo has been renowned with handcrafting product, namely kerawang. So far silk has not been widely used in kerawang industry, although currently silk usage for kerawang products already initiated. Typical constraint faced by silk is almost similar with development of other commodities such as coffee, cocoa etc. Majority of plantations are in small and medium scale, in the form of family business with conventional management. Such kind of business tends to ignore the necessity for quality improvement. Besides, government support especially in business technical assistance is felt minimal. This has resulted in low production of good quality and competitive products. Investors need to empower farmers’ skill if they will invest in silk business in Gorontalo. From the farmers’ side, they are lacking experience in silk culture. Silk development, therefore, should be carried out using careful and accurate scenario, particularly if local
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farmers are involved. They should be grouped and trained in intensive silk management technology, where they would focus only in silk business, not in mixed-farming activities.
Recommendation Utilizing forest rehabilitation area for mulberry cultivation would gradually rejuvenate the forest function in Gorontalo. Mulberry cultivation is environmentally friendly, since this should be conducted without using any pesticide. Development of mulberry in such forest area for silk cocoon culture and various silk products is highly proposed as prospective investment. Domestic and export market are still widely open, both for cocoon and yarn. Various constraints, particularly in human resource’s skill, need intensive skill improvement trainings in silk culture skill and technology and day to day guidance. Therefore, reactivation of extensive training program, in this case particularly in silk culture and other high-value crops, should be programmed and realized. This is a good challence to improve the low competitive of local farmer skill, in cultivating ‘higher value crops’, which in general requires better attitude and skill of the farmer. Government should facilitate this effort to make Gorontalo leading in agro business products from major small scale farming.
f. Jatropha Opportunities In line with price increase and less deposit of fossil fuel (natural oil), less expensive and sustainable alternative fuel is needed. Several biofuels are already developed for this purpose. One of them is biofuel made of jatropha. Jatropha trees can easily grow almost on all kind of soils, even infertile and steep lands. So is the development of biofuel processing industry, which is foot-loose in nature. Having potency to be processed into biofuel, jatropha has not well developed so far. Nationally, in 2005 jatropha cultivation only covers area size of 9,200 ha, much smaller than that in 2001 (21,400 ha), a sharp decrese 11% annually. Similarly, decrease in production also significant, 7% annually. See table below for detail. It is because of its production has low value competitiveness in the farm level market compared to other crops. Tabel 3.35 Trend of Area, Production and Productivity of Jatropha in Indonesia, 2001 - 2005 2001
2002
2003
2004
2005
Growth
Planted Area (Ha)
21.400
9.600
13.000
8.400
9.200
-11,40
Production (Ton)
2.900
2.200
2.200
1.800
2.000
-7,80
0,14
0,23
0,17
0,21
0,22
Gross Productivity (Ton/Ha) Source: Statistik Indonesia 2005/2006
Limitations Low per land area unit price of jatropha primary product needs large-scale land to produce significant biodiesel products. It is estimated that every 1 ha of land would produce 5-8 ton of jatropha seeds, and further 0.5 to 0.8 ton of jatropha oil. With the price of diesel fuel Rp.
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4,000-5,000 per lite, the factory would only buy jatropha raw seeds at a maximum price of Rp.1,200 per kg. With such price, it is unlikely that smallholder farmers interested to cultivate jatropha, except in the regions where cultivate other valuable crops is difficult. So far the land available in Gorontalo is in forest area, and it is questionable if such land will be utilized for jatropha cultivation. Therefore, large-scale investment in jatropha will likely face potential constraints particularly in land availability. Jatropha cultivation for biofuel can be prospective if developed in large scale, considering the decreasing supply of fossil fuel. However, with the dominant cultivation scheme of smallholders, farmers would unlikely be interested in jatropha, since other crops such as corn, cocoa and coffee would have better sale price and wider market. Biofuel program is preferably directed to marginal and large locations, where other crops cultivation option is minor (East Nusa Tenggara, abondomed million Ha of swamp development in Central Kalimantan etc.). Other way of cultivation could be performed through promoting jatropha cultivation in home yards, or idle lands surrounding people settlement areas. Through this, jatropha could be planted in small lands widely spread across the province area. However, transportation cost for collection of product would be high, and sustainability of supply is at stake. Considering the vast area needed for jatropha cultivation, collection of jatropha fruits to be processed in biofuel processing plants needs transportation to reach the raw material production locations. This can need large budget which makes investment in jatropha less prospective. Unlike corn or oil palm, which are more attractive to farmers since they can be produced into various products and having wider market options, jatropha could only be processed into jatropha oil with single market option, i.e. jatropha oil producers. This may lead to the low bargaining power of the farmers in getting a good price, which is considered as not contributing to the local economy.
Recommendation Investment in jatropha cultivation for biofuel raw material has not been prospective, due to low competitiveness of both suitable land and distribution, and weak contribution to the local economy.
g. Super Teak Opportunity Teak is not endemic commodity of Gorontalo. However, many super teak trees are already planted in small scale, and proofed to be suitable and grow there. This indicates that large development through HTI will also be potential. Teak is known as very expensive, and very popular for housing and furniture material, because of its exotic texture, color and easeness of working. Production of teak in the production centers in Java, however, keeps declining, while teak reforestation is limited due to many teak forests already converted to other uses. In the development of furniture with wood basis in Java, particularly with export orientation like in Jepara and Yogyakarta, many other kinds of wood already substitute teak for base material. The furniture business keeps developing and the need for good quality wood is also increasing.
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For example, in the last years wooden furniture export from Yogyakarta increased sharply in a annual rate of 14% (2001-2004), far exceeded other wooden handicraft products that increased with annual rate of 11.39%). This shows dilemmatic situation of high demand of teak furniture products on one hand and unsustainable supply of teak wood on the other hand, and therefore indicates prospective opportunity for investment in teak wood cultivation for national and export markets. Specific data concerning teakwood is not available in Gorontalo, but several super teak successfully planted in smallholder scale across the province of Gorontalo area shows the good and prospective for teak investment there. It should be considered because teak can be planted on small land area, with high value and high market demand for export and national needs. Moreover, teak can be cultivated in hilly and sloping area such as in Gorontalo. Large investment in teak through HTI will provide more economic benefit in the utilaization of forest in Gorontalo. The potential HTI area (308,138 ha) for teak development will also benefit the program of reforestation and land conservation of the province, especially on steep sloping lands.
Limitations Normal teak trees need long period to grow, and can be harvested for good wooden material after more than 15 years. However, super teaks can be harvested in 5-7 years. Such long harvest period may weaken attractiveness of investment in teak cultivation. However, teak trees are not with thick leaves having the capacity to block sunshine. This enables teak trees are planted in an intercropping with quick yielding plants, such as corn, mulberry or jatropha. Although it is not as good as normal teak, super teak is also resistant to water and termites, as well as having the beauty of texture and color of normal teak. Definitely, the commodity would be having competitiveness for investment in Gorontalo.
Recommendation Investment development in super teak through HTI, small holder cultivation, combined in intercropping with corn, mulberry or jatropha is highly proposed for Gorontalo.
h. Cows Opportunities Cow farming for the supply of meat has been widely spread across the province area. The largest population is in Kabupaten Gorontalo, followed by Pohuwato, Bone Bolango and Boalemo. Currently there are 17 groups of farmers with 328 members (19 farmers a group). The groups also distributed across kabupaten areas (Boalemo 42.1%, Bone Bolango 26.2 %, Gorontalo 23.6% and Pohuwato 9.1%). Population of cow was about 205,993 heads (2005), represented annual growth 6.6% between 2001 and 2005. As already described previously, the growth was not as fast as
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the growth in cow slaughtering for the same period (27% per year). Large part of cows also sent to East Kalimantan, with annual growing rate of 12.3%, resulting in unbalance situation between supply and demand there. This indicates that investment in cow farming for meat stock is prospective. Table 3.36 Population of Cow for Meat Stock in Gorontalo Province, 2001-2005 Descriprion
Annual growth
2001
2002
2003
2004
2005
159,334
163,747
174,460
201,678
205,993
6.6%
3,960
4,680
5,400
9,803
10,305
27.0%
Meat production (kg/year)
633,600
748,800
864,000
1,568,480
1,648,800
27.0%
Interinsular trade (heads)
9,948
13,304
14,293
11,592
15,843
12.3%
Population (heads) Number of slaughtered (heads)
Source: Dinas Peternakan dan Kesehatan Hewan Provinsi Gorontalo
Nationally, meat consumption increases 9.41% annually (2001-2005), also exceeds cow population growth which tends to decrease (-1.24%). Large portion of cow’s meat was still imported (12,248 ton in 2003) In 2007 cow farming for meat stock will be established as prioritized program of Gorontalo. The facts above shows the good prospect of investment in cow farming and meat production in Gorontalo. With the stable growth of corn as prioritized product of the province, the business in cow farming can be integrally developed with production of cattle feed made from corn.
Limitations Business in cow farming normally in small scale by small farmers, and limited only for onfarm activities. Downstream and upstream parts of the business are dominated by large traders. It is perceivable that limitations are felt mostly in the form of: Cow farming culture used to be side activities of farmer households, and not managed intensively. Culture activity has been using neither appropriate food management nor leading seeds. Annual growth in population of cows, including subsidy from province government and presidential aids (11,600 heads or 6.6% per year) cannot take pace with gowth in consumption (7,500 heads per year) and trade to outside areas (13,700 heads per year). This resulted in the deficit of about 9,600 heads per year. See Table 3.37 for detail. Table 3.37 Unbalancing of Cows Population Increasing and Utilizing in Gorontalo, 2002-2005 Description Population Increase Utilized Difference
2002
2003
2004
2005
Average
4,413
10,713
27,218
4,315
11,665
17,984
19,693
21,395
26,148
21,305
(13,571)
(8,980)
5,823
(21,833)
(9,640)
Source: Dinas Peternakan dan Kesehatan Hewan Provinsi Gorontalo, Kalkulasi MCI 2006.
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Problem of cow supply deficit in Gorontalo actually shows the prospective opportunity of investment in beef cattle (cow) farming in the province, to fulfill demand in domestic and export markets. Recommendation The need for cows for local consumption, interinsular trade and national need for meat open the opportunity for investment development in this field. This will be more beneficial if the business utilizes leading cow seed through artificial insemination technology. Cow fattening would also integrated with corn-based animal food production program. It is therefore that cow farming for meat stock is proposed in this study.
3.3 Fishery Sub-sector 3.3.1 General Performance of Fishery and Marine Resources Fishery subsector in Gorontalo is having the different characteristic with other agriculture subsectors. Fishery is dominated by sea fishery, due to the long coastline of the province, and the existence of two large sea areas (Tomini Bay and Sulawesi Sea). The south coastline is 330 km and the north one is 230 km. Other Sulawesi provinces, however, are also having the same potentiality in sea and marine resources. Central Sulawesi with more sea water resources (Tomini Bay, Sulawesi Sea and Makassar Strait), North Sulawesi with Tomini Bay, Sulawesi Sea and Seram Sea, will definitely face Gorontalo with strong competition in fishery and marine business. Fishery was already established as one of the three prioritized development program in Gorontalo Province. There are 11 fishery-related programs to achieve the objective of creation the province as “The Fishery Showcase of Indonesia”, covering development in capture fishery, fish culture, improvement of fish ports, human resource development, fish export centers and cargo aircrafts, fisherman village development, coastal cities, marine tourism, development of small islands and marine energy and communication technology. It is expected that through implementation of the programs, increase of the province’s GRDP will be triggered. Current fishery GRDP is only 4.23% of the GRDP of Agriculture Sector, much lower than of Food Crops’ GRDP contribution (13.90%). Fishery contribution to GRDP of Agriculture was fluctuating in the range of 4.2-4.7%. After 2002, however, the trend was decreasing indicating other subsectors were increasing.
Table 3.38 Development of Fishery Contribution to GRDP of Agriculture Sector. Sector/ Subsector AGRICULTURE Fishery
Year 2000
2001
2002
2003
2004 *
2005 *
31.12
31.57
32.24
31.52
30.41
30.48
4.23
4.50
4.60
4.37
4.23
4.23
Source: Dinas Pertanian Prov. Gorontalo
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Capture fishing dominates fishery subsector, about 80% of total. The growing trend of capture fishing of Gorontalo Province tends to decrease due to illegal fishing and over fishing, and also the high fuel price which causes the fishing operational cost increase. Total fish production in 2004 was 42,465 ton, increased to 45,166 ton in 2005. From sea fish capture, in 2005 the production was 37,036 ton (82%), showing the mentioned strong domination. From the production side, increase of capture fish was considered significantly high (averagely 14.83%).
Table 3.39 Fish Production in Gorontalo 2001-2005 (Ton) Production Total Capture Total Culture Total
2001
2002
2003
2004
2005
22,412.6
33,170.5
33,167.8
34,996.9
37,036.0
Annual Growth 14,83
4,117.4
5,148.0
6,279.0
7,468.1
8,130.1
18,70
26,530.0
38,318.5
39,446.8
42,465.0
45,166.1
15.35
Source: Dinas Perikanan dan Kelautan Prov. Gorontalo, 2006
Despite the increase trend of capture fishery, however, production of fishing ships was decreasing, particularly those operating along coastal areas. Total production increase caused by the increase in the number of ships, especially large ships for ocean fishing and more wide fishing grounds.
Table 3.40 Number of Capture Fish Ships in Gorontalo Armada
2001
2002
2003
2004
2005
growth
Traditional Ships
2751
2704
2683
2666
2592
-1,47
Outboard Motor Ships
2728
3006
3122
3204
3359
5,38
76
116
124
169
181
25,73
Inboard Motor Ships
Source: Dinas Perikanan dan Kelautan Prov. Gorontalo, 2006
Capture fishing resources in Gorontalo is widely spread over Tomini Bay, Seram Sea and Sulawesi Sea, potential sustainable resource for 1,046,060 ton/year for pelagics and 143,700 ton/year for demersals. Other commodities such as shrimps, squids etc.only about 36,400 ton/year. Utilization through capturing (2004) was about 40% of the sustainable resource potential, except for shrimps and squids, utilization had exceeded (> 100%) the sustainable resource potential. Culture fishery increased significantly, and exceeded the increase of capture fishing (18% yearly from 2001-2005. Largest contribution by marine culture (sea weeds and sea floating net fishery), brackish water and small scale of inland fishery. Commodities with good development are sea weeds, pearl, groupers, milk fish, shrimps for brackish water culture, and inland fishes (tawes, mas and nila).
Table 3.41 Production of fish culture in Gorontalo Culture Type A. Brackish Water B. Pond
Year 2001
2002
2003
2004
2005
% Tumbuh
433,0
312,3
669,8
1478,3
1553,2
53,09
23,3
24,0
27,6
151,0
110,1
109,50
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Year
Culture Type
2001
C. Paddy field
2002
2003
2004
% Tumbuh
2005
1,1
0,8
0,8
0,0
D. Floatng Net
350,0
429,2
537,7
532,5
583,2
14,12
E. Floating Rig (KJA)
100,0
14,9
17,7
74,6
233,3
116,97
3150,0
4365,6
5020,4
5227,3
5641,6
16,41
F. Seaweed G. Marine KJA Total
2,0
-31,82
60,0
1,2
5,0
4,4
6,7
64,73
4117,4
5148
6279
7468,1
8130,1
18,70
Source: Dinas Perikanan dan Kelautan Prov. Gorontalo, 2006
Contribution of Fishery Subsector to the export of Agriculture products was only 1.56%, showing the less optimal management of the subsector, particularly for export orientation. Commodities are also still limited to tuna, flying fishes, pearl and life groupers. Other commodities are still limited to interinsular trade, with total value in 2005 about Rp. 74 billion. Figure 3.7 Export Contribution of Fishery to Agriculture Products (2005) Export (Million USD) 25.00 21.71 20.00 15.00
10.00 4.04
5.00
1.84
1.08
0.45 Fishery
Forest Products
Agriculture
Plantation (Secunder)
Industry
Source: Deperindag dan Bea Cukai GorontaloI (2006)
3.3.2 Competitiveness of Fishery and Marine Resources Capture Fishery Theoretically, capture fishery activity in tuna, king mackerels, and skipjacks in Tomini Bay and Seram Sea still falls under its sustainable resource potential. From “Investment Opportunities in Fisheries and Marine Sectors in Indonesia” (Ministry of Marine Affairs and Fishery, 2004) it is illustrated that utilization of fish in the sea areas was still less than 40%. The total sustainable fish potential in Tomini Bay is estimated at about 600,000 ton/year. Similarly in Sulawesi
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Sea, even more than 600,000 ton/year. Utilization is only 37%. Table 3.42 Potential and Utilization of Fishery Resources Tomini Bay and Seram Sea Species Group
Potential (ton/year)
Utilized (ton/year)
Sulawesi Sea Utilized %
Potential (ton/year)
Utilized (ton/year)
Utilized %
Large Pelagic
106,510
37,460
35.17
175,260
153,430
87.54
Small Pelagic
379,440
119,430
31.48
384,750
62,450
16.23
88,840
32,140
36.18
54,860
15,310
27.91
900
1,110
123.33
250
2,180
872
12,500
4,630
37.04
14,500
2,210
15.24
Demersal Shrimp Coral Fish Lobster
300
20
6.67
400
40
10.00
Squid
7,130
2,860
40.11
450
1,490
331.11
Total
595,620
197,650
33.18
630,470
237,110
37.61
Source: Ministry of Marine Affairs and Fishery, 2004
Within 2002-2003 fish utilization in Gorontalo was only 33,000-35,000 ton or 7.8% of the total utilization (435,000 ton). The large part was by other regions around the areas. This shows the low competitiveness in the utilization of sea resources in the sea territory. The small portion in the utilization of sea resources will likely keep decreasing in the future. This is due to the limited coverage area of the Gorontalo fishermen. Fishermen with traditional ships tend to change their livelihood to sea weeds, due to increasing of operational cost (higher fuel price). This has strengthened the need for enhancing the coverage capacity of fishermen is crucial in Gorontalo. Such program has been developed by Dinas Perikanan dan Kelautan Provinsi Gorontalo through initiation of Taxi Mina Bahari, in which provision of fishing activities’ needs (fishing ships, service and repair cost, and fuel) is provided by the third party. Fishermen only take the fishing activities and will get some portion of the fishing results. The capture of fishes shows an increase volume in all kinds of fish, particularly groupers, snipers, tuna, skipjacks and Indian mackerels (kembung). Groupers, tuna and skipjacks already widely renowned in the global fish market and very prospective for investment. It is estimated that potential production of sea fishery only in tuna, skipjack and other pelagic in Sulawesi Sea and Tomini Bay is about 10,320 ton/year. Table 3.43 Capture Fish Products by Fish Type in Gorontalo (2001 – 2005) Fish Type
Production 2001
2002
2003
2004
2005
Annual Growth
Groupers
248.0
393.0
326.6
691.5
621.0
35.78
Barramundi
196.1
230.1
254.7
597.0
500.0
36.54
Layang
5,507.7
8,232.0
10,608.7
4,712.8
7,055.0
18.11
Trevallies
1,348.0
4,219.0
4,213.4
3,816.3
3,471.0
48.59
Anchovies
4,371.6
4,746.4
3,194.3
2,715.0
3,506.0
-2.50
376.0
705.9
553.8
965.8
1,265.0
42.89 65.72
Indian Mackerel King Mackerel
346.2
483.3
83.3
229.6
529.0
Tunas
1,752.5
3,448.7
3,342.2
1,881.0
4,508.0
47.41
Skipjack Tuna
1,847.2
2,186.0
2,057.9
2,147.5
4,021.0
26.02
Eastern Little Tuna
2,704.0
4,816.0
3,816.9
8,308.5
3,635.0
29.70
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Fish Type Sardine
Production 2001
2002
137.2
Others Total
151.2
2003 132.6
2004 606.8
2005 1,067.0
Annual Growth 107.84
3,440.9
3,407.7
4,450.8
7,718.3
5,791.0
19.52
22,412.6
33,170.5
33,167.8
34,996.9
37,036.0
14.83
Source: Dinas Perikanan dan Kelautan Prov. Gorontalo, 2006
Despite the theoretical consideration that there is still appropriate availability of fishes in Tomini Bay and Sulawesi Sea, the fact shows the reverse situation. Recently, fishermen complained that fishing in the two sea territories already less and less productive, ands some said that there already shown a state of ‘overfished’ condition. Although representative data is not available so far, such situation was partly caused by uncontrolled illegal fishing, or illegal trading (transshipment), particularly in certain large pelagic fishes. Such transshipment practices definitely will be large losses for large capture fishing industries. The decline of fish business in Gorontalo is shown from the reduced number of fish processing factories from 11 to 6 in 2006. The 5 factories are in the state of non-active. The still active companies are facing the difficulties in appropriate fish supply. It is also possible that fish products captured in Gorontalo were transshipped in the free territory or sent to other processing platns out of Gorontalo. It’s also as consideration why investors are worry when will invest their capital in Taxi Mina Bahari program. It’s also indicating that Opening of new processing unit in Gorontalo is felt non propective. Table 3.44 Capture Sea Fish Product in 2004 (Sulawesi Provinces and Indonesia) Province
# Fishermen
North Sulawesi
Total Motor Ships
Total Capture (Ton) 2004
38.850
660
8.853
169
34.997
Central Sulawesi
45.873
727
87.565
Southeast Sulawesi
39.456
824
187.658
South Sulawesi
27.704
6.287
314.678
1.182.604
126.933
4.320.241
Gorontalo
National
192.433
Source : Statistik Perikanan 2004, kompilasi MCI 2006
By the stipulation of Government Regulation in 2006 that all foreign fishing ships operating in Indonesian sea territory need to open their processing plants in Indonesia, is hoped will decrease transshipment (illegal trading) and increase productivity of fishing port and processing plants in region. With increasing demand in fish consumption, nationally and globally, opportunity in the development of fish capture business perhaps still open in Gorontalo, especially the business for the creation of cooperation between investors (in capture) and fish industries or campanies which already exist in Gorontalo.
Competitiveness of Culture Fishery Fish culture products represent only 18% of total Gorontalo fish products in 2005, with the annual growth rate about 8.86% from the previous year. From the total culturefish product, 69% was from sea fish culture, 19% from brackish water fishery and 12% from inland fishery.
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Table 3.45 Area Size and Production of Culture Fishery in Gorontalo, 2005 Area Size
Culture
Ha
Production %
Ton
%
Brackish Water
1,840.0
33.02
1,553.20
19.10
Inland Water
3,494.8
62.71
928.60
11.42
238.2
4.27
5,648.30
69.47
5,573.0
100.00
8,130.10
100.00
Sea Water Total
Source: Dinas Perikanan dan Kelautan Prov. Gorontalo, 2006
Sea culture is dominated by sea weeds (> 95%), the remaining is in the culture of groupers and pearl. Other commodities are in abalone, crabs, etc, and not well developed.
Limboto Lake and hundreds of floating net /karamba
Sea weeds cultivation is mostly by small farmers, and groupers and pearl are by foreign investors (PMA), each 2 companies. Marine resource culture has not been optimally developed, shown from the minor size of the businesses (238 ha). The productivity, however, is high than other culture activities. Some culture in sea fishery considered as high-value business (groupers and pearls). Accumulation of the products has exceeded sea weeds product, although the production is less than 5%. Number of culture farmers in Gorontalo is relatively smaller than that in other Sulawesi provinces. In particular to South Sulawesi, the number of marine culture farmers of Gorontalo falls only about 2.8%. Tabel 3.46 Number of Culture Fishery Household in Gorontalo Province and Other Sulawesi Provinces, 2004 Province
Marine Culture
Gorontalo
485
Brackishwater Culture 574
Others
Total 1.058
2.117
North Sulawesi
796
68
8.690
9.554
Central Sulawesi
923
7.239
3.372
11.534
Southeast Sulawesi
2.673
10.455
1.768
14.896
South Sulawesi
9.369
50.515
15.739
75.623
Source: Dinas Provinsi Gorontalo
While, with the coastline 550 km and many small islands around Gorontalo, potential for sea culture activities is large enough. Deffirently is for brackish water fishery development, which is dominated by milk fish culture (> 90%), and the rest is in shrimp. Development of brackish water culture is somewhat hindered by the physical land feature of Gorontalo along the coasts, which mostly hilly and mountainous, and many with almost vertical walls. Brackish water culture products already in operation in Gorontalo are also of minor scale. The average productivity is only 0.85 ton/ha. Inland fishery is also still in minor state, although with the large production area. This also shows the low productivity of the culture business in inland fishes. More over, less developed distribution infrastructure will create obstacle for marketing of the products in the regional and export consumption. Inland fishes tend easier to deteriorate.
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3.3.3 Opportunities and Limitations in Fishery Commodities a. Seaweeds Opportunities Suitable water condition, low rate of pollution and appropriate salinity have been the positive push factor to the development of seaweeds in Gorontalo. Seaweeds product also leading among other export products in the province, although still limited in primary state. Seaweeds have also been a safety valve function for fishermen having difficulties to fish because of the sharp fuel price increase. However the business has not been soaring like other culture of marine products, such as groupers and snipers. Seaweed culture, on the other hand, needs only simple technology, small capital and small size of area, appropriate for farmer household culture activity. With increasing number of fishermen in this business, sea weed products of Gorontalo had entered among the 10 largest province producers in Indonesia.
Table 3.47 Seaweed Product Development in 10 main Province Producers (Ton), 1999 – 2004 Province Lampung
Production (Ton) 1999
2000
2001
2002
2003
2004
--
588
33
39
17
1,202
Bali
91,897
107,612
106,083
111,875
110,564
155,985
NTB
21,073
22,349
23,954
28,912
33,379
38,827
NTT North Sulawesi Gorontalo Central Sulawesi
--
12,080
20,389
29,418
10,198
66,384
5,651
5,966
5,995
6,087
7,997
7,323
--
--
3150,0
4365,6
5,020
5,228
--
13,250
13,250
13,250
14,250
13,780
14,812
1,4812
19,158
19,366
34,991
20,141
South East Selawesi
--
932
8,442
8,442
9,886
84,528
Maluku
--
1,000
1,000
--
--
2,279
133,720
187,471
212,478
223,080
233,156
395,516
South Sulawesi
Total Produksi Nasional
Source: Statistik Perdagangan Indonesia, BPS
The situation shows that sustainable export and national consumption, together with farmers’ option to change their livelihood to seaweeds, had been the cause of positive development of seaweed production in Gorontalo. In 2 years, national production has increased annually 36% from 223,000 ton in 2003 to 395,500 ton in 2004. Domestic market absorption increased more than 50% annually, from 195,000 ton in 2003 to 347,000 ton in 2004.
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Figure 3.8 Development Trend in Domestic Consumption of Seaweeds National Consumption (Ton) 400.000 350.000
347.238
300.000 250.000 200.000 150.000
184.850
194.903
164.613
192.104
108.893
100.000 50.000 1999
2000
2001
2002
2003
2004
Year Source: Statistik Perdagangan Luar Negeri Indonesia, BPS
Global demand is also widely spread over several countries: Japan, South Korea, Hong Kong, China, Mexico, Spain and Portugal, in icreasing inclination. Export of seaweeds increased annually 35% in Indonesia, from 40,162 ton (2003) to 51,011 ton (2004), with main destinations were Hong Kong (23.6%, China (15.65%) and Spain (12.65%). Denmark and the Philippines were among importers from Indonesia.
Figure 3.9 Development Trend of Seaweeds Export Volume in Indonesia Export Volume (Ton) 60.000 50.118
50.000 40.000
40.162 27.874
30.000
25.084
28.560
23.073
20.000 10.000 1999
2000
2001
2002
2003
2004
Year Source: Statistik Perdagangan Luar Negeri Indonesia, BPS
Global demand for seaweeds seems sustainable, since seaweeds can be processed into various cosmetic products, medication and many kinds of emulsion. Consumption is estimated will steadily increase. The price of dried seaweeds in collector market is about Rp.3,500 to Rp.4,500 per kg (2005). Every 1 ton of dried seaweed is processed from 8 ton of wet seaweed. With harvest frequency of 4-5 times annually, potential wet seaweed product would be about 2.5 ton per ha per year. Assuming per seaweed farmer household (HH) averagely can manage 0.5 ha of seaweed cultivation, each HH would produce 1.25 ton of wet seaweed, equal to 150 kg of dried seaweed, with the price of about Rp. 600,000.
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Limitations Seaweed seeds are available in the local market, but with somewhat less in quality resulting in the products also with less competitiveness. The province government already creates cooperation with Dinas Perikanan dan Kelautan and continually takes the effort of seaweed seeds improvement through import from the Philippines. Secondary processing industries are concentrated mainly in Java and South Sulawesi, with their distribution access facilities enabling wider marketing of the processed products. Development of seaweeds secondary processing industries in Gorontalo would be less competitive, particularly if compare to the two processing centers above. Gorontalo, at least in the near future, should concentrate only in the progressive development of primary business in seaweeds. This effort needs the support of intensive training program to improve the cultivation technology of the farmers.
Recommendation Development of seaweed cultivation to supply the national and global demand for cosmetic and medication raw materials, limited mostly in primary activities, will be prospective investment in Gorontalo. Large investors would create partnership scheme with local farmers.
b. Pearls Opportunities Similar with seaweeds, suitable water condition, low rate of pollution and appropriate salinity have been the positive push factor to the development of pearls in Gorontalo. Both north and south sea coastal areas in Gorontalo are suitable for the growing of mother pearl shells, into which pearl core is inserted into to start pearl formation process. Mother shells are very fulnerable to pollution and strong water current. Pearl culture locations need to be far from such nuisances. Global market for pearl is sustainable, both for high end users and middle ones. Pearl is very specific, luxurious and cannot easily be imitated, due to specific characteristic of the production locations. A number of pearl PMA companies operate in Gorontalo: one in the coastal area of Sulawesi Sea, and the other is in the coastal of Tomini Bay. Pearl production and export trade are continuously administered by the companies in more than 5 years, indicating the sustainable business condition of pearl in Gorontalo. Pearl product of Gorontalo is shinier, but less in size, if compared to pearl produced in NTT, NTB and Bali. Although smaller in size, Gorontalo pearls belong to high-end commodities, while NTB and NTT pearls tend to be lower in quality.
Limitations Pearl is produced from the culture activities; consist of the growing of mother pearl shell seedlings (about 2 mm in size) for about 7-8 months. After this, mother shells are already mature and ready for artificial insertion of pearl cores into them. The insertion technology is
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so complicated and still being mastered by the owners. Production of cores is also produced in Japan. In short, only rough work or activities are carried out by local workers. Technology transfer of core insertion actually had been conducted through training of local people in the mastering of the technology, but with negative result. No valid information whether the unsuccessful effort was caused by the very limited ability of local people to absorb the technology, or the methodology for such training was inadequately designed and implemented. Due to the vast availability of coastal locations suitable for pearl culture in Gorontalo, further investment, enhancement as well as opening of new businesses, still open in Gorontalo. However, human resource development effort, especially in pearl technology mastering, needs to be conducted. If necessary the government should send people to be trained in Japan or China, where training centers for pearl processing technology are available. What also felt as limitation in Gorontalo is the lack of handicraft-based industries, particularly in jewelry. This will lead to most of the pearl product of Gorontalo will not be absorbed locally, especially lower end pearl products.
Recommendation Pearl culture for mother shell growing and core insertion to produce good quality Gorontalo pearls is prospective for investment.
c. Groupers Opportunities Sea water in Gorontalo also suitable habitate of groupers. Fishery culture in grouper growing would be well developed in the north coastal territory (Kwandang, Anggrek and Sumalata) and south territory (Lemito and Tilamuta). Capture products in Gorontalo in large part are groupers. Even in the last two years the capture products increased sharply.
Table 3.48 Development of Grouper Capture and Culture Products in Gorontalo (Ton) Product Capture Culture
2001
2002
2003
2004
2005
248,0
393,0
326,6
691,5
621,0
-
1,2
5,0
4,4
6,7
394,2
331,6
695,9
627,7
Total
Source: Dinas Perikanan dan Kelautan Prov. Gorontalo, 2006
Grouper is categorized as high-value fish product. High demand for groupers is both for national and export trade. However, capture of groupers used to be not stable along the year, and grouper culture has not developed very well, although market demand keeps increasing. Trade collectors prefer to come directly to production centers. Gorontalo is closer to grouper markets in Hong Kong, Cina and Japan, where life groupers are more preferred. The close access provides Gorontalo with better opportunity to increase its export potential in life groupers.
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Table 3.49 Development of Interinsular and Export for Groupers from Gorontalo 2002
2003
2004
2005
Export/Interinsular (ton)
4,1
99,4
85,9
90,5
Export/Interinsular (Rp)
197.952.000
3.150.780.000
2.577.000.000
2.775.000.000
Source: Dinas Perikanan dan Kelautan Prov. Gorontalo, Kalkulasi MCI 2006
Production of groupers has not been well mastered in Thailand and the Philippines, and therefore Indonesia is more competitive in the export market. There are about 91 kinds of groupers in Indonesia. Several kinds are highly demanded, such as those belong to Kerapu Tikus (Cromileptes altivelis), Kerapu Sunu (Plectropomus maculates), Kerapu Lodi (Plectopromus leopordus), Kerapu Macan (Epinephelus fuscoguttatus), and Kerapu Lumpur (Epinephelus suillus). Almost all of the groupers available in Gorontalo. Captured groupers nationally increased from 15,000 ton in 1990 to 49,000 ton in 2000. In 2010 the figure is estimated at 75,000 ton. Price per kg of goupers varies from one kind to another: kerapu tikus ranges from Rp.300,000 to Rp.360,000, kerapu macan from Rp.60,000 to Rp.80,000. Transportation of live groupers needs special ship where a mechanical tank is provided, with a capacity about 4-6 ton.
Limitations Grouper fries should be purchased from Research Station in Bali, Situbondo or Lampung, and should have reached the culture ground less than 12 hours. Calculating the flight travel time, distance to the three locations may comply with the time requirement. However, scheduling of flight transiting in Makassar rather than direct flight from Research Station Locations to the culture grounds in Gorontalo enabling the refreshment of fries is considered saver (wirh maximum 18 hours). Gorontalo sea territory also produces natural grouper seedlings caught from the sea in the size of fingerling. This may also be grown in the culture ground to reach the consumption size (1 – 1.2 kg). Unfortunately, such seedlings are not steadily available, and only in limited number. Fishery culture in groupers need higher skill, technology and discipline in every process of culture. Concerning this, Gorontalo fish farmers need to improve themselves to master the complicated technology. Investment in this field, however, will require investors to conduct training to farmers for improvement of their skills. Culture in groupers will need capital investment, most of it for the provision of fries and feeds, and the growing period which will take about 8-12 months. Price of one young grouper, about 7 cm long, also varies: kerapu macan ranges from Rp. 3,500 – 4,500; kerapu tikus from Rp.7,000 - 9,000. Transportation of young groupers should take into account their surviving transportation capacity which is 18 hours without any water media change at the maximum. Every small-scale grouper farmer capacity is about 1,000 to 1,200 with the period of 8 months for kerapu macan and 12 months for kerapu tikus. Survival rate of kerapu macan would be about 80-90%, and kerapu tikus about 70-80%). The need for feeds for nursing per farmer household would be in the range of 5-7 ton for kerapu macan and 8-10 ton for kerapu tikus,
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Recommendation Intensive Grouper Culture (kerapu lumpur, kerapu macan, sunu and kerapu tikus) will be prospective for investment, domestic or foreign in Gorontalo. To contribute positively to local economy, such investment should also involve capital and technical assistance to a group of smallholder farmers.
3.4
Tourism Sector
3.4.1 General Performance of Tourism Tourism businesses (Hotel and Restaurant, Entertainment and Recreation) contribute relatively small to the province GRDP (about 3% annually). Tourism is not developed well and therefore does not contribute appropriately to the local economy. The main reason is the less available tourism attractions complying with tourists’ demand. Moreover, less developed access infrastructure to reach the available tourism objects had added to the low tourists visit rate in Gorontalo.
Number of Tourists Despite the various constraints in tourism sectoe, the number of visiting tourists to Gorontalo shows increasing trend, particularly in the last 5 years (2002-2006). The annual increase was 40%, mostly domestic tourists. Meanwhile, international tourists’ visit fluctuated during the period. Table 3. 50 Domestic and International Tourist Visit, 2002-2006 Year
Domestic Tourists
Growth %
Foreign Tourists
Growth %
Growth %
2002
13,456
2003
25,658
90.68
539
0.19
26,197
87.20
2004
39,658
54.56
365
(32.28)
40,023
52.78
2005 2006**
538
Domestic & Foreign Tourists
41,450 52.375
Annual avg growth
13,994
4.52
475
30.14
41,925
4.75
15,25
600
(8,54)
52.975
14,91
43.77%
9.77%
42.52%
Source: Dinas Perhubungan, Postel dan Pariwisata Provinsi Gorontalo; Gorontalo in Figures 2006
Tourist growth trend experienced consistent growth within the last 5 years (2002-2005), however foreign tourists tended to much fluctuate and somewhat decreasing. Seen from the total visitor share, domestic tourist predominated with 99% of share, and only 1% for international tourist’s share. Dari angka tersebut di atas menunjukkan bahwa Gorontalo has not been considered as regional, national or international tourist’s destination. Compared to other provinces with prosperous tourism businesses, like Bali and Yogyakarta), Gorontalo tourism businesses falls only about 2%.
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Graphic 3.10 Number of Tourists Trend to Gorontalo 2002 – 2006 60.100 52.375
Number of Tourists
50.100 45.444
40.100 39.658
30.100 25.658
20.100 13.456
10.100 538
539
365
656
600
2002
2003
2004
2005
2006*
100 Year
Domestic
International
Source: Dinas Perhubungan, Postel dan Pariwisata Provinsi Gorontalo; Gorontalo in Figures 2006
Of the international tourists coming to Gorontalo in 2004 and 2005, the majority was from European countries, contributing about 62.8% of the total number. Another 21.95% were from Asian countries, and the remainder (15.25%) were from other countries. Significant growth of tourist visit (70%) was recorded in 2005 (as compared to that in 2004), which was mostly caused by the incredibly high increase of tourist visit from Europe (about 150%). Tahat was when European tourists’ visit to Makassar also increased very sharply, from 225 in 2004 to 937 in 2005, or about 316% increase. Figure 3.11 Trend of Tourists’ Visit by Country Origin to Gorontalo 2004 – 2005 450
412
Number of Tourist
400
2004 2005
350 300 250 200 150 100
144
162
107
96
100
50 0 Asia
Europe
Others
Country Origin Source: Dinas Perhubungan, Postel dan Pariwisata Provinsi Gorontalo; Gorontalo in Figures 2006
The sharp increase, however, did not continue in 2006. Dinas Perhubungan, Postel dan Pariwisata Provinsi Gorontalo stated that as of June 2006, only 217 international tourists
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visited Gorontalo. It was estimated that as of the end of 2006, the number would reach 600, about 8% decrease from 2005.
Length of Stay The average length of stay was 2 days, meaning that visiting objects attractive for them needs only 2 days. This indicates less attractiveness of tourism objects in Gorontalo. From statistical data in 2005/2006, the hotel occupancy rate of non-star hotels was only 16.4% in 2005, higher than that in 2004 (13.6%). No data available for starhotel’s occupancy rate so far, but it is estimated that the rate was more than 50%, since there was only 1 such hotel in Gorontalo. It is likely that the low hotel occupancy rate was resulted from the increasing number of hotels in recent years. This shows that investment in hotel business is not prospective so far. There were 60 hotels in Gorontalo (59 non-star hotels and only 1 3-star hotel), and the total number of rooms was 910. Figure 3.12 Length of Stay and Number of Hotels in Gorontalo 2002-2005 70 60
60 49
50 40
41 35
30 20 10
26,2
28,1 13,6 1,8
1,8
2002
2003
16,4
1,4
1,4
2004
2005
0
Length of Stay (day)
Source:
Year
Occupancy Rate (%)
Number of Hotel
Statistik Indonesia 2005/2006, Gorontalo Dalam Angka 2006
3.4.2 Product Competitiveness Various tourism objects are potentially developed for domestic as well as international tourists. Marine tourism for diving ini Olele, Marine Park in Bitila and Bogani Nani Wartabone National Park are prospective to attract more tourists coming to Gorontalo. The objects, however, need to be developed and synergistically managed with the already renowned natural and marine tourism objects of North Sulawesi (Bunaken, Tondano Lake Resort) and South Sulawesi (Tana Toraja). Developing such potential objects also needs to take into account the tourists’ demand and taste, especially concerning attractions and enjoyments which are not only competable with those already available in North and Sout Sulawesi, but also having uniqueness which is worth to visit.
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Actually, for the time being the number of international tourists in South and North Sulawesi provinces is still minor nationally. However, in the category of special tourism objects, i.e. marine tourism/diving attractions in Bunaken North Sulawesi and natural resource/cultural attractions of Tana Toraja in South Sulawesi, the objects are very attractive among foreign tourists. The number of international tourists to Gorontalo is also small if compared to South and North Sulawesi (2.43 – 4.14%), and of course much lower nationally. Table 3.51 Number of International Tourists in Gorontalo, North Sulawesi, South Sulawesi and National Figure, 2005 Description
Gorontalo
North Sulawesi
*
South Sulawesi
National*
Total International Tourists
656
15,839
27,000
3,868,024
‰ Province to National
0.17
4.09
6.98
-
-
4.14
2.43
-
% Gorontalo to Other Provinces
Source: Dinas Perhubungan, Postel dan Pariwisata Provinsi Gorontalo, Departemen Kebudayaan dan Pariwisata RI, * As recorded in main entry airport
Tourism development in Gorontalo will follow government’s programs already planned in ‘Rencana Induk Pengembangan Pariwisata Daerah/RIPPDA’ (Master Plan of Regional Tourism Development) which is now underway of completion. Development of various objects and attractions is outlined below: (i)
Tourism attractions in Gorontalo, include natural resource enjoyment, both inland and marine resources as well as cultural objects, are offered.
(ii)
White sandy beaches and interesting spots for divers are available in Tomini Bay, particularly at Olele and Bitila Marine Park. In the coastal area in eastern Gorontalo, towering limestone cliffs plunge directly into the sea. These cliffs were once ancient reefs and patterns of coral growth are clearly evident in the rock. A narrow, shallow coral shelf rims the coastline. Often this shelf is only a few meters wide and bottoms out within a few meters of the surface where the wall begins. The coral walls of Gorontalo provide diving sceneries at par with other locations in North Sulawesi. Numerous shallow caves and towering overhangs give divers an eerie but safe alternative. Diving spots in the coastal area of Olele is very potential marine tourism development, especially if integrally managed as “second destination” after Bunaken. Diving enjoyment quality of Olele has been recognized and proven by foreign divers, and already published in several diving magazines, such as ‘FINS’, ‘Asian Diver Magazine’ (Singapore), and ‘What’s Happening’ (USA).
(iii)
One of the culture- and tradition-based tourism objects is available in the mountainous area of Kabupaten Gorontalo, to be exact is in Kelurahan Dembe II, where Benteng Otanaha (Otanaha Fort) which is having the historical heroic value for the people of Gorontalo is located directly facing the beautiful panorama of the Lake of Limboto.
(iv)
One of the beautiful national parks, Bogani Nani Wartabone National Park is located in this province. Within a total area of 300,000 ha, various interesting wild animals are found in this national park. There are 24 kinds of mammals, 125 avis, 11 reptiles, 2 amphibians, 38 butterflies, and 19 fishes. Most of the fauna found in this national park are endemic of Sulawesi Island, such as black primate / yaki (Macaca nigra nigra), Dumoga Bone primate (M. nigrescens), tangkasi (smallest primate Tarcius spectrum), Sulawesi civet (Macrogalidia musschenbroekii), large anoa (Bubalus depressicornis), and many other kind of birds.
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3.4.3 Opportunity and Limitations Opportunity in Natural Resource Enjoyment Opportunity for the development of various natural resource objects can be in synergy and complementary with North Sulawesi Province, where similar objects already develop there, especially in marine resource attractions. There are attractive marine resource, natural mountainous and forest park objects claimed by government officials in charge of local tourism development as having very good prospect to be developed. However, careful assessment should be undertaken to judge their competitiveness in the wider regional setting. Such claim also stated by other regions. Marine tourism in Bunaken provides diversity in organisms and some endemic endanger species, such as mermaids, dugong-dugong fishes, dolphins, various decoration fishes such as Hippocampus, gigantic clam, scaly turtles, and green turtle. Additional to that, specific marine ecosystem enriches marine attraction of Bunaken, such as seaweeds, beautiful coral reefs and vast mangrove forests along the coast of mainland as well as islands of North Sulawesi. Meanwhile, Olele coast area in Kabupaten Bone Bolango, are also rich in diversified organisms and also different scarce endemic marine species, which will give more complete and complementary marine tourism enjoyments. Rantje Allen, a diving enthusiast and writer at Snow Publishing Singapore, in collaboration with renowned diving photographers such as William Tan (China), Takako Uno (Japan) and Stephen Wong (Singapore), had written the potential of marine resource of Gorontalo that he mentioned as a “’Gorontalo’s Hidden Paradise’. In which he illustrated the beauty of Gorontalo’s underwater with scarce endemic species such as ’Orchestrates a school of coral shrimpfishes (Aeoliscus strigatus), bottlenose dolphins (Tursiops truncatus), freckled hawkfishes (Paracirrhites forsferi), golden sweepers in a sponge (Parapriacanthus ransonneti Petrosia sp), Salvador Dali sponge (Petrosia lignosa), blue sea fan (Acanthogorgia sp), etc. Several other scarce species are also found in Olele, such as ‘Foxtail colonial tunicates’, ‘Jellyfish with shrimp’, ‘Tube anemone’, ‘White-V octopus’ etc. which are not available in other places. It is therefore that the marine resource of Gorontalo is is stated as ‘Unknow marine life; full of mysteries’ due the many species that are not identoified yet. The facts above, related to the increase trend of interactive, adventure and leisure tourism among international tourists, especially those from Australia, USA, European countries and Japan, Olele is prospective for the development of such tourism. However, as already discussed above, the development should consider that the produced object will contain such interactive, adventurous and leisure meeting their demands. Out of the international tourists visiting North Sulawesi (Bunaken), it is estimated that about 20% of them are having the inclination to continue their diving session to other locations. In this case, Gorontalo could be the best alternative for them. The same case also with tourists visiting South Sulawesi, about 10% of them are estimated will continue their visits to Gorontalo, if interesting objects are available, supported by appropriate infrastructure, and managed in a good and integral promotion.
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Table 3.52 Estimated Potential Number of International Tourists in North Sulawesi and South Sulawesi with Inclination to Gorontalo Year
North Sulawesi
South Sulawesi
Potential f/ North Sulawesi
Potential f/ South Sulawesi
Total Potential
2005*
15.839
27.000
-
-
-
2010**
19.800
31.725
1.970
1.580
3.550
2015**
24.750
38.070
6.200
3.800
10.000
** Estimation by MCI, based on current tourism growth * Source: Dinas Perhubungan, Postel dan Pariwisata Provinsi Gorontalo, Departemen Kebudayaan dan Pariwisata
Synergy and complementary potential with Bunaken is also supported by recent development in air transportation between Gorontalo and Manado. Regular direct flight from Gorontalo to Manado, and even further to Davao (the Phillipines), vice-versa, has been available since November 2006. The air traffic connection is served by Sriwijaya Air using Boeing 737, although currently only twice a week (Monday and Thursday), and takes only less than 1 hour as compared to 9-10 hours using land transportation (cars). Direct connecting flight from Gorontalo to Makassar has been long available, served by Lion Air and Sriwijaya Air, also using Boeing-737 and MD-12. From Makassar, connecting flights to and from places aross the country are available. Flight to Gorontalo from Hasanuddin international airport in Makassar (about 1.5 hours) is available daily, while land transportation can not be used as alternative because too far, too long, and passing many damaged roads and bridges.
Limitations in Natural Resource Enjoyment The current situation of natural resource enjoyment in Gorontalo so far has not been so pleasingly, indicated by the small number of tourists visiting the province. Moreover, of the visitors coming to Gorontalo, only very few visited natural resource objects (including Olele, Bitila Marine Park and Bogani Nani Wartabone National Park). This situation would be the serious challenge for those willing to develop the attractive natural resource tourist objects having the standard of both domestic and, particularly, foreign tourists’ taste. Constraints in tourism infrastructure, particularly inadequate objects, accomodation, and transportation, will definitely limited the fluent development of natural tourism in Gorontalo. Moreover, the available promotion service which is so limited in providing approriate information concerning tourism object facts, will also weaken the effort to develop tourism in Gorontalo.
Recommendation Potential marine tourism includes Marine Parks of Bitila Island (off-shore south of Kabupaten Boalemo) and Olele (south coast of Kabupaten Bone Bolango). Diving spots and game fishing can be developed in these areas. Other natural resource potential is Bogani Nani Wartabone National Park. In this vast preserved and protected forest area (300,000 ha), various appreciation of interesting animals and plants, many of them are scarce, endemic or endangered, can be performed. However, development of tourism objects and attractions utilizing those natural resource potentials needs careful selection. Identification of specific characteristics and uniqueness of any object, be it marine and inland natural object, should be accurately carried out to understand the specific identity, image and competitiveness of each object. Based on these, tourism format meeting the tourists’ demand and taste can be prepared. Close,
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extensive, synergetic and integral collaboration with tourism promotion service entities, especially in North Sulawesi and South Sulawesi should be created.
Prospective marine tourism objects development, including marine park (Bitila Island and Olele Marine Park) and game fishing, and natural preserved tourism: Bogani Nani Wartabone National Park.
3.5
Industrial Sector
3.5.1 General Performance of Industrial Sector Industrial sector of Gorontalo contribution in the total GRDP was 9.5% with annual growth rate of 1.11% in the last 5 years (2001-2004). Total people employed in the sector were 8.12% of the total workers available in 2004. The sector has not developed properly and therefore the contribution is not as largeas other main sectors (Agriculture, Trade, Hotel and Restaurant and Services). Less development of the region’s infrastructures, particularly road network and transportation facilities with less distribution capacity may be on the blame. Development of primary activities is expected to be able to trigger industrialization in Gorontalo. Several large primary commodities have already successfully attracted investors in the manufacturing sector, such as processing of fish products, coconut processing factories, or various wood and timber manufacturing. Continued quantity, quality and diversity development of primary commodities’ production will eventually widen the opportunity for the development of secondary economic activities. Up to 2005, 5 years after the status change into province, at least 12 investment plans were proposed, and 8 were already realized. The total investment value was US$ 63.65 million, including 5 investments in industrial sector, 75% of the total realized investment in Gorontalo. Table 3.53 Investment in Processing Industry Sector in Gorontalo (as of December 2005) No
Business Field
Planned
Realized
Project #
Investment Value
Project #
Investment Value
Fish freezing and processing
2
1,260,000
2
760,000
2
Wood processing
1
100,000
1
610,357
3
Sugar factory & sugarcane plantation
1
60,000,000
1
58,261,752
4
Vegetable oil
1
3,300,000
1
3,300,000
5
Coconut skin fiber processing
1
365,000
1
n/a
1
Source: Dinas Industri, Perdagangan, dan Penanaman Modal.
In 2005 there were 4,380 business units, and about 4,290 of them were small to medium in scale. A number of 1,750 units were industries located in industrial centers. About 86 industries were categorized as medium to big scale in 2004 employing about 5,000 workers. The majority were food and beverage processing industries (fish products, sugar, copra, crude coconut oil etc), and also wood and wood products such as furniture, coconut fiber processing, etc.
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The number of medium and large scale industries was decreasing from 107 units in 2002 to 91 in 2003, and 86 in 2004. Table 3.54 Number of Large and Medium Industries in Gorontalo, 2001-2004 Industry
Factory (Unit)
Worker (People)
Food & Beverage
37
2,299
Clothing
15
906
Wood and Wood Products
16
1,332
5
162
Non-metal Mineral Others
13
365
Total 2004
86
5,055
2003
91
5,573
2002
107
5,569
2001
89
5,191
Source: Gorontalo Dalam Angka 2006, BPS
3.5.2 Competitiveness Development of manufacturing industries should consider carefully sustainability of raw materials for continued production, availability of appropriate infrastructures and access facilities to reach easily the market destinations. Several industries already meet such requirements, while others are still less competitive if compared to other similar industries in other regions. Several industries having appropriate competitiveness are coconut fruit and coconut wood processing industries. Coconut, as already discussed previously, is a leading product of Gorontalo. Processing of coconut products involves significant number of households, and the largest cultivation area among other plantation products. Export of various coconut products already developed with many destination countries in Asia, America, Australia and Europe. Other commodities, such as corn, secondary processing of corn so far is considered less competitive due to the lack of distribution and access facilities, as well as market for such products has not existed. Processing industry of fishes, both access facilities and market are already developed, but the product size is not significant enough for the new manufacturing development. Other commodities are also more advantageous for primary products development, rather than for processing industries. In handcrafting, Gorontalo has very limited handicraft products. With the total number of handicraft industries about 505 units in 2006, all are of small and medium scale. About 7,000 workers are employed. As compared to 2004, handicraft industries grow at the rate of 7% annually. Anyhow, kinds of handicraft products are limited mainly to 2, namely: (1) crafting of matting mintu, mendong, rattan and others; and (2) embroidery of kerawang. Only kerawang, which is very specifically Gorontalo, is considered as having very strong competitiveness among other handicraft products of Gorontalo as well as of other provinces in Sulawesi. Kerawang product was already patented as indigenous product of Gorontalo Province. Recently, kerawang from Gorontalo already marketed in a somewhat limited volume to Manado, Makassar, Surabaya and Jakarta through Manado. About 60% from total of handicraft industries is Kerawang embroidery industry, with more than 1,500 workers. The center of kerawang production is Kabupaten Gorontalo.
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Other SMEs industries have not specific products generally available in others and not competitive comparing to other provinces or regions. Other SMEs industries still with orientation to local consumption market, although the number generally is increasing.
3.5.3 Opportunities and Limitations of Processing Industries a. Coconut Fruit Processing Opportunity Opportunity opens for processing of coconut plantation products. Processing is not limited to coconut fruits, but also the side products, such as skin fibers, coconut shells, and wood. Almost all parts of coconut trees are having their own usefulness. . 1.
Coconut fruit meat can be processed into: Copra: this is raw material for coconut oil industries. Currently there are 2 kinds of copra: the white copra is for export, and the regular copra for Manado and Surabaya markets. Coconut oil: there are two kinds of coconut oil: crude coconut oil, produced in Gorontalo and sent to Bitung for refinery and produces the second kind of coconut oil: cooking coconut oil. Nata de Coco: for both local consumption and sent to Manado. Coconut powder: for local as well as sent to outside areas. VCO (virgin coconut oil): claimed as having the capacity for medication of many health problems, such for remedial of heart, kidney, liver deficiencies, hypertency, diabetes, obesity etc. Small scale production of VCO are soaring not only in Gorontalo, but also in other regions.
2.
Coconut Skin Fiber To be used for filling of car seats, chairs, sofa, doormats, etc. An integrated coconut product processing enterprise in Gorontalo, a joint venture with Srilanka to process coconut skin fiber, sent to America, Europe etc.
3.
Coconut shell coal to be processed into carbon active, for material of filtering device, medication etc. Cultivation area of coconut in Gorontalo Province was nearly 57,000 ha in 2005, with total production of more than 61,000 ton and annual growth rate 0.7% (2001-2005). Average household’s cultivation land was about 1.25 ha. Widely planted across the province area, the largest coconut plantation being in Kabupaten Gorontalo (close to 50%), and other kabupatens: Pohuwato (23%), Boalemo (16%) and Bone Bolango (12%).
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Table 3.55 Plantation Area, Production and Productivity of Coconut in Gorontalo, 2005 Kabupaten
Farmers (KK)
Plantation Area (Ha)Total
Bone Bolango
Production (Ton)
Productivity (Kg/ Ha)
6.860,94
5.337,00
1.523,94
1.257
Gorontalo
28.125,89
24.508,00
31.985,99
2.104
Boalemo
8.910,18
7.047,00
7.752,21
1.425
Pohuwato
13.033,88
7.501,00
21.765,31
2.174
Total
56.930,89
44.393,00
61.308,36
1.740
Source: Dinas Kehutanan dan Perkebunan (2006)
From such plantation area and annual production of coconut, a stable and sustainable stock of coconut product is ensured. This leads to prospective potential for the development of secondary processing of various coconut downstream products discussed above. Average daily production in 2005 was not less than 168 ton. Other nearby Sulawesi provinces, North and Central Sulawesi, also well renowned as large coconut producers. If an integrated coconut products processing industry would be developed in Gorontalo, the two provinces could be involved and support their products to be processed in Gorontalo. Most coconut fruits are processed simply into copra by smallholder farmers in Gorontalo, and into crude coconut oil and coconut powder by small and medium scale industries. Export of coconut products was about 75% of the total of export value in 2005. Table 3.56 Contribution of Coconut Export in Gorontalo VALUE (US$) COMMODITY Copra Crude Coconut Oil
2001
2002
2003
2004
2005
% share 2005
660,050
4,754,873
1,302,300
1,012,350
2,210,347
7.59
1,539,464
1,677,175
8,199,116
13,757,064
18,724,240
64.30
Coconut Powder
0
0
0
223,500
775,000
2.66
Total Coconut Products
2,199,514
6,432,048
9,501,416
14,992,914
21,709,587
74.55
Export Other Commodities
1,026,697
3,034,325
5,628,633
3,563,751
7,411,220
25.45
Total Export
3,226,211
9,466,373
15,130,049
18,556,666
29,120,807
100,00
Source: Dinas Perindag & PM, Bea Cukai Gorontalo (2006)
Limitations in Processing of Coconut Products Hybrid coconut trees, with higher productivity and larger fruits have not been largely developed in Gorontalo. Not all plantation locations are suitable for hybrid type of coconuts. However, research and investigation in identifying plantation locations with soil suitable for hybrid coconuts needs to be carried out. Cultivation of hybrid coconuts on such locations is definitely beneficial. Secondary products of coconut will face strong competition from North Sulawesi and the Philippines. Most of coconuts are produced into copra for the raw material of coconut oil factories in Bitung, and lately also in Gorontalo. The coconut shells are processed into carbon actives. Secondary industry for integrally process of downsream products of coconut has developed neither in Indonesia nor in North Sulawesi, nor in the Philippines. One such industry exists in Lampung. If Gorontalo plans to develop such integral
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processing plant, there is a possibility that North Sulawesi and the Philippines will do the same program. Market for commodities produced in secondary processing of coconut still dependant to the third parties, and demand is not stable yet. However, development shows that although fluctuating, the market demand of such products tends to increase. If direct links to domestic and export markets can be created, the prospect for investment in the production of downstream coconut products is promising.
Recommendation Integrated industry for the production of primary and secondary coconut products is prospective investment in Gorontalo. Various products of such integrated industry, however, need the creation of direct market linkages, both for domestic consumption and export trade.
b. Coconut Wood Opportunities In several coconut-producing areas, usage of coconut wood for the construction material of houses, furniture and other hosing appliances is usual. Coconut wood is strong and with a slightly rough texture, but through appropriate processing the coconut wood surface can be refined and finished to produce various beautiful home appliances, including furniture. Coconut wood would make good alternative for forest wood. So far, usage of coconut wood needs intensive promotion and socialization, to end users, carpenters, architects, and constructors. Ordinarily, after coconut trees become old and unproductive, people tend to ignore and leave them not maintained or cut and use them for simple structures such as chicken pens or small street bridges. In Gorontalo and North Sulawesi provinces, usage of coconut wood for furniture (chairs, tables, cupboards, dividers, wall covering, and handicraft products) already initiated more than 15 years ago. Many hotels and restaurants have used coconut wood and make beautiful rooms out of it. Potential supply for coconut wood is large in Gorontalo. Out of the total 56,930 ha coconut plantation (21 million trees), about 11.37% (6,475 ha or 2.4 million trees) already old and unproductive. However, plantation rejuvenation is only minor (0.7-1% per year), which may pose question of coconut wood supply sustainability. The largest is in Kabupaten Gorontalo. Table 3.57 Potential of Coconut Wood Supply Area in Gorontalo by Plantation Condition (2005) Kabupaten Bone Bolango
Plantation Area (Ha) TBM
TM
TT/TR
Total
% TT/TR
1.271,63
4.580,43
1.008,88
6.860,94
Gorontalo
9.325,59
15.202,47
3.597,83
28.125,89
6,32
Boalemo
2.670,96
5.440,15
799,07
8.910,18
1,40
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Plantation Area (Ha)
Kabupaten
TBM
TM
TT/TR
% TT/TR
Total
Pohuwato
1.952,97
10.011,64
1.069,27
13.033,88
1,88
Total 2005
15.221,15
35.234,69
6.475,05
56.930,89
11,37
Source:
Dinas Kehutanan dan Perkebunan 2006, BPS Provinsi Gorontalo, 2004/2005, Kalkulasi MCI 2006
Production of 1 m3 of good quality coconut sawed wood needs 5 coconut trunks. From the already available stock (2.4 million trees), about 0.5 million m3 of good quality coconut sawed wood is available for processing. This is a remarkably large wood material stock, for both construction material and furniture. Sustainability of coconut wood stock is also ensured; about 500,000 new trees would be added to coconut plantation very year, and about the same amount of trees become old and unproductive. This would make additional annual stock of about 100,000 m3. Table 3.58 Estimation of the Number of Ready-to-Cut Trees and Coconut Wood Stock in Gorontalo 2005 Estimate of Trees #
Kabupaten
Total
Bone Bolango
TB
M3 Kayu TT/TR
TT/TR
2.058.282
118.400
302.664
151.332
Gorontalo
11.250.356
188.400
1.439.132
719.566
Boalemo
2.673.054
134.756
239.721
119.861
Pohuwato
5.213.552
62.400
427.708
213.854
Total 2005
21.195.244
503.956
2.409.225
1.204.613
Source: Dinas Kehutanan dan Perkebunan 2006, BPS Provinsi Gorontalo, 2004/2005, Calculation by MCI 2006
Comparing the potential area to estimated number of coconut trees in 2004, coconut plantation area increased 2.72% and the number of coconut trees increased 2.8% in 2005. Meanwhile, ready-to-cut trees increased 3.2% (almost 75,000 trees).
Table 3.59 Plantation Area and the Number of Trees by Plantation Condition 2004-2005 Kabupaten
Plantation Area (Ha) TBM
TM
TT/TR
Estimated Tree # Total
Total
TT/TR
Total 2005
15.221,15
35.234,69
6.475,05
56.930,89
21.195.244
2.409.225
Total 2004
13.961,26
35.234,69
6.225,59
55.421,54
20.618.013
2.334.387
9,02
0,00
4,01
2,72
2,80
3,21
% Growth Source:
Dinas Kehutanan dan Perkebunan 2006, BPS Provinsi Gorontalo, 2004/2005, Calculation by MCI 2006
Something interesting about the coconut trunks in Gorontalo is that there is no footstep cuts on the trunk body. This would make better wood quality if compared to coconut trunks in Java, where people climb coconut trees utilizing such climbing steps deliberately cut along the trunk’s body.
Limitations There is already in operation a company using coconut sawed coconut wood for furniture, garden fences and wooden doorsteps. The products are for export to Korea. However,
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various furniture products made of coconut wood have not been widely acceptable among Korean people, and therefore the product size is still limited. Less popularity of coconut wood compared to that of usual forest wood or even teak wood, would be one of the limitations of coconut wood. Unlike usual forest wood, which would be suitable for the making of more diversified furniture, home appliances, and handicraft/souvenirs, use of coconut wood is still somewhat limited for only a few purposes, due to limited size as well as different coconut wood structure, strength, and texture. It is perceivable that coconut wood is still not widely acceptable in the world market. Aside of that, Gorontalo is still less accessible from furniture and wooden building material markets, both for national/domestic and for export consumption. Again, less developed distribution and cargo transportation facilities in Gorontalo would be another limitation for investment in coconut wood. However, expansion capacity of market access and good product quality would open the opportunity of investment in coconut wood processing. The beautiful color and specific texture of coconut wood, although with coarse fiber, will make a fine furniture or interior panel products if processed correctly. Another limitation might be resulted from unsustainable supply and instable price of raw material. As already stated previously many of the trees have been old and unproductive anymore. However, due to smallholder nature of coconut plantation, not many of the already old trees are rejuvenated. Good and sustainable coconut wood supply needs socialization and realization of intensive regeneration of old coconut trees.
Recommendation Investment in coconut wood processing to substitute the need for raw material of furniture and housing construction could be potential. For sustainable supply of raw material, and to contribute positively to local economy, such investment should involve close cooperation with smallholder farmers.
3. Kerawang Embroidery Opportunities Kerawang embroidery is exotic handcrafted textile products for clothing of men and women (man suits, shirts, blouses, long dress, traditional kebaya), and also for various bedroom appliances, such as blankets, pillow covers, bedcovers, tablecloths, handkerchieves, etc. Many clothing accessories are also made of kerawang, also for men and women (neckties, scarves, shawls, and hats). Kerawang is handcrafting product that needs careful and accuracy work, which is very prospective for further development. Most of kerawang workers are women, among them are housewives, working as partimers, the making of kerawang has been beneficial to households’ economy. Actually, about 11 handcrafting industries are available in Gorontalo, which dominated by matting products. About 2,200 workers are involved in the industry, with total population of about 505 business units. Each business unit employs 4-5 workers at the average.
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Currently, out of the total SME industries, about 30% are engaged in these handcrafting business/industries. Labours of handcrafting business/industries are more than 36% of total SME industries. It indicates that, in industry SME sector in Gorontalo, handcrafting business/industries is one of prominent. Table 3.60 Number of SME Business Units (Handicraft and Other Industries) in Gorontalo, 2006 No
Busines Type
Units
%
1
Food & Beverage
2
Furniture
276
15.74
756
12.63
3
Building Materials
304
17.34
1,130
18.88
363
Workers
20.71
%
933
15.59
4
Workshop
39
2.22
83
1.39
5
Kerawang
305
17.40
1,579
26.39
6
Other Handicrafts
200
11.41
627
10.48
7
Miscelaneous
96
5.48
494
8.26
8
Garment
170
9.70
382
6.38
Total
1,753
5,984
Source: Dinas Industri, Perdagangan, dan Penanaman Modal Provinsi Gorontalo
While, contribution of handicraft industries is only 15% of the total of SME industries, far below the contribution of food & beverage and furniture industries. So far, handicraft industry is still a minor sub-sector in Gorontalo regional economy. Table 3.61 Production Value of Handicraft Centers and Other SME Industries in Gorontalo, 2005 No
Busines Type
1
Food & Beverage
2
Furniture
3
Building Materials
Production Capacity (Pieces)
Production Volume (Rp.000)
% Production Value
9,935,961
10,660,120
31,618
19,141,784
20.53 36.87
39,895,827
7,077,935
13.63
4
Workshop
20,326
357,203
0.69
5
Kerawang
181,169
5,314,210
10.24
6
Other Handicrafts
7
Miscelaneous
8
Garment Total
194,194
2,453,911
4.73
1,076,157
1,914,528
3.69
70,229
4,996,176
9.62
51,405,481
51,915,867
Source: Dinas Industri, Perdagangan, dan Penanaman Modal Provinsi Gorontalo
Although handicraft industry in Gorontalo is still a minor sub-sector, kerawang is a specific commodity and indigenous product of Gorontalo, which having strong competitiveness among other handicraft products in Gorontalo even out of Gorontalo. The production units of kerawang are spread over Kabupaten Gorontalo area, with strong domination over other handicraft industries of Gorontalo. About 60% of the total handicraft business units, 60% are in kerawang making, less than 36% in other matting industries, and 5% in other embroidery products.
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Table 3.62 Number of Business Unit and Workers in Handicraft Industries in Gorontalo, 2006 No
CENTER
NUMBER OF UNIT
NUMBER OF WORKERS
1
Matting Takraw Ball
2
Matting Mintu
75
5
14 75
3
Matting Nyiru
15
30
4
Matting Rattan Mintu
13
60
5
Matting mat
56
326
6
Matting Bamboo Panel
10
20
7
Embroidery
8
Head Veil
6
24
10
20
9
Matting Rattan Souvenir
5
43
10
Bridal Clothing and Accessories
5
15
11
Kerawang
305
1,579
Source: Dinas Industri, Perdagangan, dan Penanaman Modal Provinsi Gorontalo
Unlike other embroidery products, no sewing machines of any make can be used for kerawang making. It is solely made manually, and therefore cannot be imitated or developed for mass production. This is considered as sort of strong competitiveness of kerawang as compared to other embroidery products, such as Bali lace, which can be imitated using automatic machinery, usually by China, for mass production with much cheaper price than the original product. Products have not reached wider market interests, and therefore need improvement in designs and motives to meet wider markets. Such widening market efforts have been tried through broadening the use of kerawang for kimono. It is expected that new and varied designs, motives and diversified products would heighten kerawang competitiveness in regional, national and international markets. A lot of government support to improve the design to follow the market trend through intensive design innovation and understanding to material technology is required particularly to expand to the upper high natural market and international consumption (MCI report of Bali and Yogya 2006).
Limitations Kerawang making by housewives as side jobs arises contradicting opinions. On one hand, it is considered as positive for improvement of household economy. On the other hand, however, as side job kerawang making by housewives is carried out after the domestic activities completed, and therefore needs longer production time. Although kerawang product was already patented as indigenous product of Gorontalo Province, the product is still limited in designs and motives, and has not widely known in national and global markets. Involvement of designers with good understanding of national and global market demand in fashionable designs and motives is necessary. Thereafter, extensive promotion through various representative media needs to be performed for wider product recognition. The product opportunity is in its specificness. Many specific products can penetrate beyond their regional or country boundary, or even have their luxurious markets involving million dollar business along the London, Milan, New York and Paris catwalk. The opportunity may be even larger if it can be beautifully applied on silk fabrics. Silk materials
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are widely renowned among upper-class market abroad. Uniqueness of kerawang, produced in designs and motives meeting fashionable upper-class market, applied on high quality fabrics such as silk, would open world market widely. If kerawang is successfully developed for export commodity, it is expected that export of textile products in Indonesia would be positively affected, and can prevent continued decline trend because of sharp competition by machine made textile products made by China. Table 3.63 Export of Handcrafted Textile Products of Indonesia (x 1.000 USD), 1999-2004 No
Product
Handcrafted Textile
Year 1999
2000
2001
2002
2003
2004*
9,611
13,944
5,095
3,992
3,691
1,279
Woven Ikat
1,124
437
214
385
251
560
2
Woven Silk
7,084
12,879
4,252
2,922
2,663
477
3
Tulle and seine products
1,403
628
629
685
777
242
1
Source: Central Board of Statistics, * only first semester
Recommendation Kerawang is proposed as prospective investment in handcrafting production. Investors need to create partnership with smallholders. Further development in designs and motives, as well as for various apparel products, should be innovatively, intensively and continually promoted. More over utilizing silk as expensive raw materials will be gained this Kerawang apparel product to enter high and consumer in national or export market.
3.6
Energy Sector
3.6.1 General Performance of Mining and Energy Sector The sector is far from being the leading sector in Gorontalo, even categorized as minor. However, it has the strategic position as it can impose strong influential effect to other sectors. Mining and Energy Sector contributes only about 0.5-0.6% of the province GRDP, but grows rather highly in the rate of around 9% annually in the last 5 years. In part, the low contribution to the province GRDP is caused by not all mining potential can be exploited in Gorontalo. Very precious metals deposits are available in Gorontalo, but they are located within the Bogani Nani Wartabone National Park, which consists of preserved and protected forest area.
3.6.2 Sector Competitiveness Mining and Quarrying Mining and quarrying products of Gorontalo are mostly non-metal and particularly used for construction materials. Actually, other precious metal deposits are available in several
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locations, but unfortunately located within the preserved area, i.e. Bogani Nani Wartabone National Park in Kabupaten Bone Bolango, at the eastern part of the province. This situation has hindered the legal exploitation of the precious metal, although illegal mining practices can not be prevented by the government. The deposit locations, about 10 of them, are widely spread over the national park jurisdiction, about 500 ha in total. Currently, illegal mining activities by surrounding people had encroached about 100 ha. About 6,000 people, grouped in Aliansi Masyarakat Dumoga (Alliance of Dumoga Community) had appealed to the government to free 350 ha of mining location off the national park, where they can perform mining legally. The appeal had been submitted in 2000, but no government response was issued until now.
The non-metal products, among others, are andesyt, limestone, granite, etc, are available in rather significant deposits, but widely spread over the province area. Such products are mostly for local market. See table below for detail information on potential mining and quarrying commodities in Gorontalo. Table 3.64 Potential of Mining and Quarrying Materials in Gorontalo No
Location
Material
Deposit (Ton)
Remark
1
Motomboto/ Tombol ilato
Au/Cu
Estimate: 291.000.000 @ 0,41 g/Au 65% Cu
Porifi in Diorite Quarts, Location: Bogani Nani Wartabone National Park
2
Tapadaa
Au/Cu
Estimate: 43.000.000 @ 0,075 g/t Au 0,54% Cu
Porifi in Diorite Quarts, Location: Protected Forest
3
G. Pani/Marisa
Au/Ag
Estimate: 6.000.000 @ 2,3 g/t Au
Vein in Rhyyodacite, Location: Natural Preserved Area PETI
4
Tahele
Au/Cu
Prospect : 128 m @ 00,046 g/t Au 0,19%
Porfiri in Andesite
5
Sumalata
Au/ Ag/ Cu/ Pb
Prospect: 0,033% g/t/Au
Vein in Tufa, Andesite, Prod. Gold 1,4 ton; Silver 1,4 ton
6
Petulu
Au/Cu
Prospect: 0,11% Cu, 0,27 g/t Au
Porfiri in Monzonit - Diorit
7
Wonggehulu
Au/Cu
Prospect: 0,08% Cu, 0,23 g/t/Au
Porfiri in Diorit
8
Bolontio
Cu/ Au
Propek : 200 m, @0,08% Cu 0,57 g/t Au
Porfiri in Diorit Kwarsa
9
Pelama
Cu/ Au
Prospek : 800 m, 1,27% Cu 0,75 g/t Au
Porfiri in Diorit
10
Topo po/Bumela
Au/ Ag
Prospek : 96 m, @ 0,47 g/t Au 0,55 g/t Ag
Vein in Andesit PETI (1996 - 1998)
11
Monggalomo
Au/ Cu/ Ag/ Ba
Prospek : 45 m, 1,28 g/t Au 17% Ba
Vein in Dasit
Source: Dinas Pertambangan dan Energi Provinsi Gorontalo
With such potential, Gorontalo is considered as less competitive for the development of its mining sector. Although precious metal deposits are available in Gorontalo, they are not exploitable since the location is in preserved and protected forest area. Such development fully contains with environmental issues. In many cases, extracting practice would result in negative impacts far beyond its economic value.
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Table 3.65 Mining Exploration and Exploitation in Gorontalo No
Company
Legal Status
Area (Ha)
Location
Problem
1
PT. Gorontalo Mineral's
KK (Kontrak Karya) Detail Exploration
Desa Mopuya, Tombulilato/ Kab. Bonebolango
43,000
- Overlapping with National Park Forest Area - Majority of the area is exploited by illegal mining practices (PETI: Penambang Emas Tanpa Ijin)
2
PT. Gorontalo Sejahtera Mining (Eks. PT. New Crest)
KK (Kontrak Karya) Detail Exploration
Desa Burrela Kec. Paguyaman. Desa Hulawa Kec. Marisa, Kec. Tolang ohula
20,210
3
PT. Ras Manik Tonala. M
KP (Kuasa Pertambanga) in Exploitattion
Desa Tangkobu, Kab. Boalemo
- Overlapping with Panua Preserved Forest Area - Majority of the area is exploited by illegal mining practices (PETI: Penambang Emas Tanpa Ijin) Overlapping with Sugarcane Plantation Area of PT. Tolanghula;
KP (Kuasa Pertambanga) in Exploitattion
Desa Hulawa, Kab. Pohuwato
4
KUD Dharma Tani Marisa
514
Exploitation is not executable 100
Overlapping with Panua Preserved Forest Area
Source: Dinas Pertambangan
Electricity Already stated previously that Mining and Energy Sector contributed very small to GRDP of Gorontalo Province. However, electricity as a part of the sector is very influential in the development of other sectors. The sector is indicated as not properly taken care of. Shortage of electricity has been seriously experienced, especially after the new status as province where better economic development is hindered by drawbacks in electricity shortage. During 2003-2005, the use of electricity was continually increasing with annual rate of 11.36%. So far, electricity is generated by several diesel power generators (PLTD), which are already old and far below the demand need for domestic uses, industrial and other development sector activities. Table 3.66 Realization of Electricity Use in Gorontalo, 2003-2006 Electricity Usage Category
2003 KWh
Social Domestic
2004 KVArh
KWh
2005 KVArh
KWh
As of June 2006 KVArh
KWh
KVArh
3.485.629
-
4.099.729
-
4.803.290
-
2.942.174
-
61.428.052
-
68.009.288
-
74.074.590
-
39.274.808
-
Business
8.737.108
-
11.510.198
-
13.526.659
90.408
8.221.862
112.765
Industry
12.474.834
1.069.071
11.695.924
1.207.878
12.299.544
1.346.339
5.468.610
508.510
7.902.913
5.688
10.964.737
756
11.622.783
20.556
6.363.910
-
168.876
-
230.452
-
342.517
-
112.858
-
94.197.412
1.074.759
106.510.328
1.208.634
116.669.383
1.457.303
62.384.222
621.275
Public Multi Purpose Total
Source: PLN Gorontalo
Meanwhile, the generated electricity was stagnant, even inclined to lower due to equipment depreciation. Information on the installed capacity, serving capacity, peak load and reserved capacity etc is presented below.
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Tabel 3.67
Electricity Condition of PT PLN Gorontalo (kW) Year
Condition
2003
2004
Growth
2005
Installed
49,159
50,361
50,817
1.68
Serving Capacity
36,910
37,530
36,295
-0.81
Peak Load
27,391
28,206
29,552
3.87
Reserved Capacity
9,519
9,324
6,743
-14.86
Largest Machine Unit
2,800
2,650
2,400
-7.40
Fixed Reserve (Cadangan Pasti)
6,719
6,674
4,343
-17.80
Source: PLN Gorontalo
The situation continues, and lack of sufficient electricity has resulted in frequent scheduled black-electricity out, even in Kota Gorontalo. Several kecamatans area located far from PLTD sources (Gorontalo, Marisa dan Tilamuta) are not served with electricity. Investment in electricity generating by private sector, considering that PT PLN has not having the capacity to undertake it, is crucially needed. Anyhow, such private investment is still facing serious constraints, especially concerning the selling price to PLN which is higher than the stipulated maximum price. After monetary crisis, many electricity provision projects by private sectors were terminated or reviewed due to the financial recovery failure. Additional to that, the increase of oil fuel price in 2005 had led to severer deficit in electricity operation. As already known, most of national electricity generating plants are oil-based, including those in Gorontalo. As is the case in Gorontalo, the installed capacity also grows very slowly nationally. It was 21,698 MW in 2004, an increase of 0.6% annually since 1999. Figure 3.13
Installed Capacity of Electricity Generators of PT PLN (MW)
Installed Capacity (MW)
25,000 24,000 23,000 22,000 21,000 20,000 19,000 18,000 17,000 1999
2000
2001
2002
2003
2004
Year Source: CIC – MCI, 2005
The total capacity was generated by various generator plants and energy sources. Of the total electricity generators, the majority (44% or 8,214 MW) are PLTG, PLTU and PLTD which are oil- and natural gas-based generators. Another 37% are coal-based, 17% hydropower, and others are only 2%.
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Figure 3.14 Installed Electricity Generators by Source of Energy of PT PLN in 2004 (MW) PLTG; 1.900MW; 10%
PLTGU; 3.241MW; 17%
PLTD; 3.073MW; 17%
PLTA; 3.184MW; 17%
PLTU; 6.800MW; 37% PLTP; 380MW; 2%
Source: Analysis by MCI
To be feasible, investment in electricity generating by private sector needs to use cheap energy source, such as hydropower, geothermal, or coal. The problem is, not every region, including Gorontalo, is having sustainable supply of such energy sources.
3.6.3 Opportunities and Limitations Opportunities in the Development of IPP (Independent Power Plant) Electricity capacity to serve the need for the whole province area is not adequately available, especially within years after Gorontalo has changed into a province. Limited capacity of electricity has led to much lower supply than demand need. Additional capacity through construction of new generators is therefore crucial. Nationally, electricity generating is continually increased both by the government through PT PLN, and by private sectors to cater their own consumption demands. Unlike the government, which is limited in finance capacity, electricity supply by private companies shows better development, as shown in the following table. Table 3.68 Electricity Production Development 1999 – 2003 (MWh) Operator PLN Private Sectors Total
1999 80,023,750
2000 80,265,610
2001 87,587,439
2002 88,068,643
2003 92,480,921
4,256,676
9,135,136
13,299,973
20,291,206
20,538,757
84,280,426
89,400,746
100,887,412
108,359,849
113,019,678
Source: PLN, CIC, MCI, 2005.
Annual growth rate of production by PT PLN was only 3.75%. With the support of private electricity, the growth rate was heightened to more than 7% annually, which was higher than the increase in national electricity consumption within the same period (6.16%).
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Table 3.69 Electricity Consumption Development 1999 – 2003 (MWh) Year
Industry
Household
Commercial
Public
Total
1999
31,337,638
26,886,419
9,330,751
3,779,805
71,334,613
2000
34,013,217
30,563,415
10,575,970
4,012,202
79,164,804
2001
35,593,287
33,339,779
11,395,312
4,192,003
84,520,381
2002
36,828,294
33,393,551
11,845,039
3,989,404
86,056,288
2003
36,497,254
35,753,046
13,223,835
4,966,800
90,440,935
3.94
7.50
9.17
7.57
6.16
Growth
Source: PLN, CIC, MCI, 2005.
Investment opportunity in electricity generating by private will soar in the future, considering the limited financial capacity of the government in that field, including in 2006. However, such investment is capital intensive and needs long-term recovery, and therefore needs government incentives to assure long-term business security and appropriate profit without giving too much burden to consumers. Table 3.70 Electricity Consumption by Consumers and Region 2003 (GWh) Consumer
Region Java North Sulawesi, Central Sulawesi & Gorontalo South Sulawesi & Southeast Sulawesi Other Regions Indonesia
Industry
Household
Commercial
32,186
25,232
9,648
Public 3,452
Total 70,518
90
536
132
84
842
517
1,046
256
175
1,994
3,704
8,939
3,187
1,255
17,085
36,497
35,753
13,223
4,966
90,439
Source : CIC, MCI, 2005
Up to 2013 the domestic electricity need will grow at the estimated rate of 6% annually. The electricity demand in 2003 will be about 175,169 GWh. The national annual growth rate is far below the current electricity demand growth rate in Gorontalo, which is about 11% annually. Table 3.71 Projection of Electricity Need and Peak Load in Indonesia, 2007-2013 Description Electricity Need (GWh) Growth (%) Production (Gwh)
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
99,012
104,985
111,858
119,222
127,194
135,691
144,763
154,448
164,794
175,169
-
6.03
6.55
6.58
6.69
6.68
6.69
6.69
6.70
6.30 204,713
115,116
122,692
130,714
139,332
148,649
158,579
169,182
180,500
192,590
Peak Demand (MW)
21,902
23,343
24,869
26,509
28,282
30,171
32,188
34,342
36,642
38,949
Installed Capacity
27,503
28,356
29,356
30,529
31,578
31,601
31,608
31,566
31,380
31,058
Source: PLN, CIC, MCI, 2005
Investment in electricity generating is continually offered to private. The projects, however, were already unsuccessfully negotiated in the past, which consist of several PLTUs for consumption supply in Java (Tanjung Jati, Cilegon, Serang and Pasuruan). Although it is slightly different to the one in the era of Newly Order, private sector investment in electricity generating is not supported with assurance letter from the government to prevent mark-up practices.
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Electricity demand in Gorontalo is increasing, despite the fact that electricity consumption magnitude in the region of North Sulawesi, Central Sulawesi and Gorontalo (SULUTENGGO AREA) is relatively small. Anyhow, electric power supply in Gorontalo is felt as much below the increasing electricity demand caused by economic development of the region. Such situation calls for additional generators. Natural resource for electricity generators is not sustainable due to environment degradation. Meanwhile, geothermal resource is available in several areas, but still in hypothetical status. This needs further exploration. Geothermal power generator in Lahendong, North Sulawesi, with about 50 MW of capacity, is now already in operation after more than 20 years of intensive research and development, as well as pilot project activities. With limited energy source available in Gorontalo, electricity energy from outside input could be one solution alternative. Oil-based or diesel generators are expensive, and also such resource is now becoming scarcer and scarcer. Access to abundant coal material is relatively close (East Kalimantan), and therefore utilizing coal fuel for IPP would be of advantage. Electricity Law is still in the process of legislation in central government. However, a government regulation concerning provision of electricity power generator by private sectors is already in effect. This has opened the opportunity for private sector to invest in the installation of IPP (Independent Power Plant).
Limitations With the increasing demand of the people, the need for oil fuel to generate national electricity will increase to about 11 million kiloliter (KL) annually, while the quota for PLN is only 8.4 million KL per year. This indicates that fulfillment of electricity demand using fuelbased generators will face serious constraints in the years to come. In Gorontalo, however, more than 90% of the existing generators are PLTD. Table 3.72 Electricity Generation Capacity by Type of Generator and Region 2003 Region Java North Sulawesi, Central Sulawesi & Gorontalo
PLTA
PLTP
PLTU-M
2,409.27
360.00
PLTU-B
1,000.00
PLTU-G
4,200.00
PLTD
800.00
90.00
60.68
20.00
-
-
-
240.81
South Sulawesi & Southeast Sulawesi
129.22
-
25.00
-
-
184.52
Other Regions
568.61
-
130.00
590.00
155.00
2,155.27
3,167.78
380.00
1,155.00
4,790.00
955.00
2,670.60
PLTG-M
PLTG-G
Indonesia Region Java North Sulawesi, Central Sulawesi & Gorontalo
548.26
PLTGU-M
97.60
PLTGU-G
2,717.98
Total
3,267.36
15,490.47
-
-
-
-
321.49
South Sulawesi & Southeast Sulawesi
122.72
-
-
-
461.46
Other Regions
411.29
44.85
20.00
857.88
4,932.90
1,082.27
142.45
2,737.98
4,125.24
21,206.32
Indonesia Source; CIC, MCI, 2005
On the other hand, hydropower generating system (PLTA) in Indonesia shows decreasing tendency due to unsustainable water supply caused by environmental degradation. This is particularly true in dry season where draught can cause electricity generating capacity of PLTA decreased to about only 50-60% of the normal situation.
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Table 3.73 Electricity Production by Generator Type and Region 2003 Region
PLTU-M
PLTU-B
4,891,315
2,803,520
7,721,361
1,248,690
28,556,367
112,525
North Sulawesi, Central Sulawesi & Gorontalo
176,325
155,107
-
-
-
708,704
South Sulawesi & Southeast Sulawesi
766,700
-
56,701
-
-
343,160
Other Regions
2,637,825
-
1,329,571
85,133
3,180,189
6,482,136
Indonesia
8,472,165
2,958,627
9,107,633
1,333,823
31,736,556
7,646,525
PLTG-M
PLTG-G
Java
Region Java
PLTA
Other Regions Indonesia
PLTGU-M
PLTU-G
PLTD
PLTGU-G
Total
1,651,771
33,917
6,678,210
17,139,180
70,836,856
-
-
-
-
1,040,136
60,837
-
-
-
1,227,398
619,642
450,300
2,142,760
2,449,160
19,376,716
2,332,250
484,217
8,820,970
19,588,340
92,481,106
North Sulawesi, Central Sulawesi & Gorontalo South Sulawesi & Southeast Sulawesi
PLTP
Source; CIC, MCI, 2005
Nationally, economically potential energy sources for electricity generating are coal and LNG. Another source, nuclear energy, could be developed for future electricity, provided that various technological as well as environmental strict requirements are met. For electricity capacity expansion in Gorontalo, which is considered relatively small, the likely feasible generator would preferably use coal as energy source. Considering financial limitation of PT PLN, such electricity development is proposed through IPP (Independent Power Plant) by private sector. To be economically feasible, however, an IPP should have the minimum capacity of 50 MW. Such capacity size is far beyond the need for electricity energy for the whole Gorontalo, makes the investment not competitive and may face loss of business in the long term. Aside of that, coal-based IPP utilization needs the construction of Coal Port, and therefore will be economically feasible if the energy produced is large enough. Large capacity will be beneficial if interconnection system to Sulawesi electricity network is created. The already planned integrated Sulutengo electrical interconnection system should be realized to accommodate that.
Recommendation Investment in the coal-based electricity power generator (IPP) with the minimum capacity of 50 MW by private sector is recommended, provided that interconnection electricity with other Sulawesi regions, such as Sulutengo (Sulawesi Utara-Sulawesi Tengah-Gorontalo) system realized soon. Otherwise, such investment is considered as marginal. However, referring to information gathered from Rencana Umum Ketenagalistrikan Daerah (RUKD) Provinsi Gorontalo 2004, that the demand increase in Gorontalo is about 11-25% and peak load increase is 12% annually, the projected electricity need in 2020 will be 195 MW (almost 7x of the need in 2003). Therefore, investment in IPP would be feasible in the near future. The proposed IPP investment by private sector is in line with the development plan of 3 (three) electricity power systems in Gorontalo, as described below:
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
(a)
Development of Gorontalo Power System: covering the construction of Coal Power Generator in Kwandang, Diesel Power Generator in Isimu, Minihydro Power Generator in Mongango, Hydro Power Generator in Dumbaya Bulan (Bone-2), and Geothermal Power Generator in Lombongo. The total planned capacity will be about 60 MW in 2010, 110 MW in 2015 and 162.6 MW in 2020.
(b) Development of Marisa Power System: a 150 kV transmission link will be developed from Isimu to Marisa in 2013. Provision of the link will enable electricity service for Marisa service area from the Gorontalo power system. Before the completion of the transmission system, the Marisa generating plant will utilize a machine relocated from Buroko and genset provided by the government, with the total capacity of about 2.5 MW.
(c) Development of Isolated Systems: Small, isolated and technically viable power systems gradually will be interconnected through Marissa Transmission Link 20 kV. Those which are not viable for grid development will be expanded utilizing machines relocated from generators with appropriate supply. Upgrading of isolated systems using relocated machines is planned with the total capacity of 10.8 MW in 2010, 17 MW in 2015, and 19.2 MW in 2020.
3.7
Summary of the Selection Analysis of Main Prospective Commodities of Gorontalo
Next, will presented map of Spreading of Gorontalo’s Main Commodities and map of Gorontalo’s Tourism Objects (in Figure 3.15 and Figure 3.16). And after those, will presented summary of analysis to select main commodities prospective for investment in Gorontalo Province from long discussion in this chapter (in Table 3.74).
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Figure 3.15 Map of Spreading of Gorontalo’s Main Commodities 121 30' E
122 00' E
122 30' E
123 30' E
123 00' E
N
S 0
3
6
12
u
l
a
w
e
s
i
S
e
a
18 km
Anggrek Container Port Tolinggula Lokal Port Kwandang Public Port
50 Ha P.Tolinggula
200 Ha
Tg.Babi Tl.Bolombo
Tolinggula
CENTRAL SULAWESI PROVINCE
P
G NUN EGU
AN
P.Maa P.Duyanumo
Bulonlio
LEH PALE
G.Libodongu
G.Buhu
50 Ha
P.Motua Tg.Dunu
P.Lamasi
Tg.Labuandolong Tg.Molu
P.Motinggolo P.Dudepo
G.Bubalango
G.Nabe
P.Lahu
P.Lampu
G.Pomonto
G.Pentolo
Kwandang Fish Port
475 Ha
Tg.Keramat
Tg.Pasirputih
01 00' N
75 Ha
To Baroko
Alinggola
P.Ponelo Teluk Kwandang
Ds.Popaki
G.Balaloupa
G.Palajuli
Moluo
G.Datanu G.Lowulowu
NORTH SULAWESI PROVINCE
Kabupaten Gorontalo
G.Molalahu G.Oliboe G.Batutiga
Kabupaten Pohuwato
G.Palualo G.Moutong
Pegunungan Bapi
Kabupaten Boalemo Sidomulyo
Pancakarsa I
G.Pandet
To
00 30' N
G.Marisa
Bonggo
G.Tilempede
G.Lomali G.Panu
G.Padang
Lembo
Tirisora
P.Paniki
G.Timbuale
G.Langge
Randangan
TILAMUTA
LEGEND :
P.Sangi
Capital of Province City of District City of Sub-District River Mount Provincial Boundary District Boundary Arterial Road Collector Road
Labutan Timur
Bolumato
Tj.Ombula
Tj.Panjang
390 Ha
P.Kambing
Ds.Pona
G.Olaola
LIMBOTO
Bulila D.Limboto Payunga Tomulobulso
G.Tatuwoto
Duruma Selatan Manggodila Olihuta
Tj.Wolibadu
Mitrapacific Consulindo International
G.Tanewa
m
i
n
i
G.Imani
G.Balobolanga
810 Ha
B
a
y
Gorontalo Ferry Port
Seaweed Culture
Sugar Factory
Corn Production Center
Brackishwater Culture (Milkfish)
Fish Processing & Cold Storage
Robusta Coffee Production Center
Marine Aquaculture (Grouper Culture/Habitat)
Wood Furniture & Components of Building
Cocoa Production Center
Coconut Oil Factory
Coconut Production Center
Small scale Industries Center (Kerawang)
Sugar Cane Production Center
Pearl Culture
G.Ledaleda
Bilungala
Planned as International Port
NOTE :
G.Tapambundu
SUWAWA
Oluhuta
Gorontalo Port
o
Kabupaten Bone Bolango
Teluk Gorontalo
Tj.Olinlata
Jalaluddin Airport
T
AAN
G.Molintogupo
G.Lantadutomula
P.Limba
Tilamuta Fish Port
Harbor
PERANT AN
Blamu
Kayubulan
P.Bitha
Other Road Airport
GAN
Ayula Selatan
P.Montuli
P.Lahe
PEGUN UN
Ds.Ulapoloa
GORONTALO
Bubaa
P.Mahuparbodaa
Tj.Boloaliyo P.Pomohadoa
P.Popayatobesar P.Manuangi
Tabula
MARISA
P.Lamuadae P.Pasiglogo
P.Tarolaya
Pentadu
Suka Meladu
P.Puntu Dao
Dulamayo
G.Oyile
Moholahu Mo uto ng
Lamu Pulubala
Mulombulahe
To Moliba
gu
Tl.Tahidaa
Tahidaa Lokal/Fish Port
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Figure 3.16 Map of Gorontalo’s Tourism Objects 121 30' E
N
122 00' E
122 30' E
123 00' E
S 0
3
6
12
u
l
a
w
e
s
i
123 30' E
S
e
a
18 km
Anggrek Container Port
Tolinggula Lokal Port
Kwandang Public Port
P.Tolinggula
Kwandang Fish Port
Tg.Babi Tg.Keramat
Tg.Pasirputih
Tl.Bolombo
Tolinggula
01 00' N
CENTRAL SULAWESI PROVINCE
A NG UNU PEG
N
P.Maa P.Duyanumo
Bulonlio
LEH PALE
G.Libodongu
P.Lahu P.Lampu P.Lamasi
G.Pomonto
G.Pentolo
G.Buhu
P.Motua Tg.Dunu
P.Dudepo
G.Bubalango
G.Nabe
Tg.Labuandolong Tg.Molu
P.Motinggolo
12
Ds.Popaki
G.Balaloupa
To Baroko
Alinggola
P.Ponelo
13
Teluk Kwandang
G.Palajuli
Moluo
G.Datanu G.Lowulowu
Kabupaten Gorontalo
G.Batutiga
Kabupaten Pohuwato
G.Palualo G.Moutong
Sidomulyo Pancakarsa I
G.Marisa
Lembo
00 30' N
Tirisora
outo ng
1
G.Timbuale
LEGEND :
P.Sangi
6 7
Suka Meladu
P.Puntu Dao
Pentadu
MARISA
P.Lamuadae P.Pasiglogo
4
P.Manuangi
Tj.Panjang
3
Pulubala
Mulombulahe
Dulamayo
Bolumato
5
8
Tj.Boloaliyo
10
Labutan Timur Tj.Ombula
11
9
Ds.Pona
6
13
12P.Mahuparbodaa
G.Olaola
Ds.Ulapoloa
11
LIMBOTO 15
Bulila D.Limboto Payunga Tomulobulso 2
16
17
Tilamuta Fish Port
m
i
n
i
B
a
y
Tourism Objects in Kab. Boalemo 8. Pulau Bitita 9. Pantai Pasir Putih Pilamuta 10. Air Terjun Desa Agutulalo 11. Perkampungan Suku Bajo 12. Pulau Mohupambakiki 13. Pulau Asiang 14. Pulau Dulupi
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Tourism Objects in Kab. Gorontalo 15. Pulau Limba 16. Teluk Leango 17. Teluk Bubaa
5. Gel. Olah Raga 23 Januari 6. Pemandian Air Panas Pantadio 7. Bukit PPn 32 8. Rumah Adat Gorontalo 9. Circuit Pacuan Kuda & L.Golf 10. Cagar Alam Tangele 11. Hutan Suaka Margasatwa Nantu
Tourism Objects in Gorontalo City 12. Taman Bahari P.Seronde 13. Benteng Orange 15. Danau Limboto 16. Teluk Paguyaman
1. Gua Ular 2. Bekas Pendaratan Pesawat Udara Dakota 3. Taman Makam Du Panggala 4. Benteng Otanahe 5. Kolam Renang Patanga 6. Monume n Nani Wartabone 7. Telapak Kaki Lahide
G.Imani
G.Balobolanga
7
6
gu To Moliba Tl.Tahidaa
Highest Potentiality to be Developed
Planned as International Port
Tourism Objects in Kab. Pohuwato
G.Tanewa
Bilungala
Gorontalo Ferry Port
Harbor
1. Perkampungan Suku Bajo 2. Perkampungan Suku Sangihe 3. Pulau Lahe 4. Taman Laut P.Bitila 5. Pantai Pasir Putih Paguet 6. Perkampungan Suku Minahasa 7. Perkampungan Suku Sangihe
G.Ledaleda
5 Gorontalo Port
o
G.Tapambundu
2
G.Lantadutomula
4
Jalaluddin Airport
T
1
Oluhuta
P.Bitha
AAN
G.Molintogupo
Teluk Gorontalo
Tj.Olinlata
PERANT AN
Kabupaten Bone Bolango
SUWAWA
8
P.Limba
Tj.Wolibadu
3
Blamu
P.Montuli
P.Lahe
Other Road Airport
G.Tatuwoto
5 6 7 3Manggodila 4 Olihuta
Kayubulan
15
PEGU NUNG AN
Ayula Selatan
Duruma Selatan
GORONTALO
Bubaa
P.Kambing
14
5
9
1
TILAMUTA Tabula
P.Pomohadoa
P.Popayatobesar
Capital of Province City of District City of Sub-District River Mount Provincial Boundary District Boundary Arterial Road Collector Road NOTE :
Randangan
Lamu
G.Oyile
G.Langge
Moholahu P.Paniki
P.Tarolaya
G.Panu
G.Padang
2 To M
Bonggo
G.Tilempede
G.Lomali G.Pandet
7 8
Kabupaten Boalemo
Pegunungan Bapi
NORTH SULAWESI PROVINCE
10
G.Molalahu G.Oliboe
Tahidaa Lokal/Fish Port
Tourism Objects in Kab.Bone Bolango 1. Pemandian Air Panas Lambongo ogani Nani Wartabone 2. Taman Nasional Boganatiwanaton 3. Danau Paniis 4. Taman Laut Olele 8. Pantai Karang Citra 5. Pantai Ombanga 6. Pantai Kaidundu 7. Air Terjun Siaga Permai
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Table 3.74 Analysis of Prospective Commodities/Industries to be Developed in Gorontalo Sector / Sub Sector
Commodity / Location
Corn (primary product) Food crops
Location : Kab. Pohuwato, Kab. Boalemo, Kab. Gorontalo
Local Coconut (Primary Product) Plantation
Location : Kab. Gorontalo, Kab. Pohuwato
Cocoa (primary product) Plantation Location : Kab. Pohuwato
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National Competitiveness
• Gorontalo is 6th biggest corn producer in Indonesia with fastest production growth • Corn became an export mainstay commodity of Gorontalo • Other regions may pose strong competition due to availability of large, whole and less slope lands (North Sumatra, South Sumatra and NTB)
• Utilization of downstream product of Gorontalo only dominated by copra and crude coconut oil • Focus of small scale coconut marketing mainly to Bitung (coconut oil) • Plantation area is still smaller than in North and South Sulawesi • Processing of coconut is facing a problem in inadequate access to national and export markets
• Suitable soil and climate for production of cocoa • In national level, Gorontalo cacao is not prominent enough, but production is sustainable enough in Sulawesi • Cocoa become major export commodity of Sulawesi
Opportunity and Limitation
+ Corn cultivation already known as a traditional activity by household + Support of government very strong to build Gorontalo as national corn production center + Export market price increase, make competition among corn producer such as: Sumut, Lampung and NTB will be improve. - Gorontalo is Mountainous area with limited flat area. It will be an obstruction for corn cultivation with big scale planting mechanization - Infrastructure of Gorontalo port is not sufficient for big capacity export - Productivity of farmers still lower than Java and Sumatera farmers - Land acquitting is not easy
+ Coconut is widely known as traditional plantation culture by small scale farmers + Processing products include foods, fruit skin fiber, and coconut wood +/-Expansion of plantation area is possible, but still limited and competing with usage for other commodities with higher value. - Coconut culture is more for consumption. Sustainable supply for secondary processed products is unclear - Development of hybrid coconut has not been successful due to soil suitability and manpower constraints - Labor productivity is less competitive
+ Cocoo production of Gorontalo increase significantly, it can support export from South Sulawesi as export center + Demand for cacao bean export continues to increase. It shows sustainable market absorption; even though the price is low due to decline of national/Sulawesi cacao quality. + Cacao is high value commodity, it can be developed on relatively small area and does not require complicated mechanization. - Productivity of farmers is still low, under that in Java or Sumatera - Extension/Education activity to farmers decrease since decentralization (National Phenomena), which weaken competitiveness of national agriculture product. - Threat of pest and diseases that can reduce the quality of cacao
Market Market Segment
• For export to Korea and Taiwan in superior shelled corn commodity • For national consumption
• Domestic market (North Sulawesi) and local (for foods, coconut wood, skin fiber, and coconut powder)
Prospective ness
Remark
• Less Prospectiveness (Marginal) for large-scale investment especially because of land limitation and location competitiveness. . • Corn is still prospective commodity for export market which developed by small holder (small scale). • Gorontalo have advantage access for direct export to East Asia.
• Need government effort by illumination as continuous program to improve farmer production, so that can have more competitiveness • Need government support in partnership model by smallholder (land owners) in land utilization and acquisition
Supply and Demand
• Increasing of corn price in world market is happened because most of corn in main producer countries was converted to ethanol production • National demand of corn as raw material for food industries and animal feed has been increasing
• The need for coconut fruit for coconut oil is stable • Already developed in several other products (VCO, Nata de Coco etc) • Domestic market for coconut wood, due to lesser supply in regular forest wood • The Philippines already develops similar industry with more varied products for regional market
•
•
Less Prospectiveness (Marginal) for large-scale investment, due to land available in small sizes and widely spread. Coconut is still prospective commodity to supply local coconut consumption need by small farmers.
• Investment in coconut plantation needs large cultivation area, while coconut price is low. • Widely spread plantation locations affect directly transportation cost, while price per weight unit of coconut is low. • May become prospective investment if developed for integral processing of main and side products (fruit meat, shells, skin fibers, stems), and in economicscale of business (not side activity)
• • Cacao bean export to America, Europe and China • National consumption by processing industry.
• The growth of world consumption is 4%, which is encouraged by the increase of consumption per capita in Asia and East Europe. • There is ’health awareness’ to consume high anti-oxidant chocolate (flavonoids).
• Prospective Commodity, as high value commodity, suitable for limited land availability in Gorontalo • Support raw material supply from Sulawesi • Comparative advantage of Gorontalo cacao product quality, with complete pest/diseases handling.
Need capacity building fro farmer in term of institutional or productivity • Extension/education for fighting against pest and disease, to obtain higher export value • Need widening of export markets to other countries (Japan, Europe) to gain ‘value added’ of fermentation products.
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Sector / Sub Sector
Commodity / Location
Arabica Coffee (Primary product ) Plantation
Location : Kab. Bone Bolango
National Competitiveness
Opportunity and Limitation
• Gorontalo dominated by undulating and hilly landform, the cultivation will not as efficient as flat land • High value crop like Arabica Coffee more competitive than other crop than can grow anywhere. • Not yet developed intensively on the upland area (above 800 m), but the potentiality almost the same as Toraja. Current production is robusta, which is cheaper commodity than arabica
+ Even though not yet included in ‘gourmet’ coffee, market value of Arabica coffee is high both in national market and export market. (price of Arabica coffee bean /ton is approximately 15–20 times from corn) + Arabica is high value crop that can be developed in relatively small area (not absolutely require large land) and does not require intensive mechanization. - High value product always needs skill and technology, so that improvement of farmer capacity is required - Needs intensive extension/education to improve Human Resources Quality and productivity
Market Market Segment
• Export to Europe countries, USA and China in bean product • National market for secondary products processing
Prospective ness
Supply and Demand
• National Robusta Products have been over-passed by Vietnam, who tends to be over supply and makes the price of Robusta decrease. • Arabica is still high because the segment is more about ‘gourmet’. • Demand on world coffee develop continuously especially in Japan, China and East Europe. Demand on organic develop aggressively in developed-states (USA and Europe).
• Prospective Commodity, as high value commodity for export and local consumption • Prospective commodities by expanding area through partnership with local farmer.
•
Plantation
Jatropha (Secondary product:: Biodiesel) Location : All kabupatens
Forestry
Mulberry and Silk Cocoon Culture (Primary and Secondary Products) Location : Kab. Bone Bolango; and Kab. Pohuwato
Mitrapacific Consulindo International
• Industrial crops with ratio raw material to processed product is large, need very large cultivation area • Jatropha belongs to low-value crops (low production per area unit) • Almost all provinces nationally with development of biodiesel. • Distribution network to national consumers still weak
• Land form (mostly hilly and mountainous) will make land management not as efficient as on flat or near-flat lands • High value crops should be the option for land with suitable fertility, but small in size • Silk cocoon culture would be high-value commodity and having possibility grown in hilly and mountainous lands • No history of such development in Gorontalo
+ Biodiesel products can substitute fossil fuel + Jatropha grows in any climatical conditions, without any need for technology and specific skill - Domination of hilly and mountainous condition across province area, leads to expensive operational cost - Price is regulated by processing factory, and less competitive to other crops. No possible development through partnership - Low influential power to local economic growth
+ Available land suitable for mulberry. Planting of mulberry will function as land rehabilitation + Environmentally friendly due to no use of chemical fertilizers or pesticides. Suitable for development by smallholders’, since there is no need of large land. + High-value commodity, already started to develop in North Sulawesi, and already established in South Sulawesi. + Strong political support from 3 Ministers: Industry, Cooperative, and Forestry, through SKB (Surat Keputusan Bersama) in 2005 - Silk cocoon culture integrated with mulberry cultivation needs high skill, hard and careful work, and discipline of farmers. - National production currently in a state of stagnant, while global demand is increasing. National consumption in large part (65%) from import.
• National market in fuel
• High National Market demand • Potential export market, only for high end-users.
• Biofuel is still in pilot project phase in Indonesia, not in commercial scale yet • Kalimantan and Sumatra are more potential with millions ha of palm oil products
• Global consumption increases averagely 6%/year due to the increase of purchase capacity of China, Asian and European people. • Decreasing supply due to production decline in Japan, Korea, Taiwan and Thailand. • Vietnam takes the benefit of the situation and becomes the third largest producer in the world in less than 10 years.
•
•
Remark
• Need government support to increase competitiveness, although there are limitation on land and manpower • Need intensive extension in newly developed commodity • Need empowerment of farmers
Less prospective (Marginal) for large industrial scale business, due to limitation in land available Less prospective for smallscale farmers, because of low-value nature of the product. Farmers would prefer corns or cocoa Not beneficial for local economy due to oligopoly nature of commodity (no other market except factory)
• Prospective commodity, for investment with large national and export markets. • Mulberry cultivation is highly possible in Production Forest locations (large land potential)
• Needs farmers’ empowerment by government to improve the human resource quality in the sector. • Processed products having gender dimension and large ‘value added’
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Sector / Sub Sector
Commodity / Location
Super Teak (Primary Product) Forestry
Location : All kabupatens
Cow Farming (Primary Products) Livestock
Location: Kab. Gorontalo Kab. Pohuwato
Sea weeds (Primary Products) Marine Culture
Marine Culture
Location : Kab. Gorontalo Kab. Boalemo Kab. Pohuwato
Groupers (Primary Products)
Mitrapacific Consulindo International
National Competitiveness
• Started by smallholders on fragmented areas. Barely appropriate facilitation by the government, although already show good result. • Not in significant number yet (Data concerning the number of trees not available yet).
• Relatively less number of cows compared to other regions, but already traded to outside areas in routine basis (East Kalimantan)
• Less significant products despite suitable culture locations very potential
• Less significant products due to still in early development, despite suitable culture locations very potential
Opportunity and Limitation
+ For long-term investment and in the mean time for reforestation of critical forest areas + High value wood product, as alternative production for Central and East Java Teak Forestry area (not sustainable anymore). + Soil in Gorontalo is highly suitable for Super Teak cultivation. - Long cultivation period (7 years), not attractive for farmers. But can be intercropped with corns, mulberry or jatropha.
+ Increasing demand from national and local markets for meat consumption + Long history of livestock (cows) farming +/- Unbalance growth between the number of cows supply and utilization (tends to be deficit), leads to the need of investment in livestock farming
+ Long coastline (north and south) and large area suitable for the culture of seaweeds and groupers + Farmers’ capacity appropriate for seaweeds, but needs improvement for groupers - Culture in groupers needs careful management, high skill and capital due to high-value of products + High demand in global seaweed markets, although the market price is low . + Sustainable markets for groupers in East Asia, with closer access from Gorontalo + Long coastline (north and south) and large area suitable for the culture of groupers - Farmers’ capacity less appropriate for groupers - Culture in groupers needs careful management, high skill and capital due to high-value of products + Sustainable markets for groupers in East Asia, with closer access from Gorontalo, especially for live-groupers
Market Market Segment
• Prospective national market in high-quality and high-value wood for good quality construction/ furniture material.
Supply and Demand
• Wood resource tends to be less sustainable because of ‘illegal logging’ and ‘over logging’, which leads to sharp increase of wood price • Increasing demand in wood, parallel with population and economic growth
• Domestic: local and interinsular
• Cow farming still conventionally managed by smallholders, leads to inadequate livestock supply • Increasing demand from local and inter-insular markets
• Seaweed product to support domestic processing industry of carragenan •
• Seaweed products (carragenan) used widely for various foods, cosmetics, and medications, also for various emulsion and stabilizing substance
• Groupers for export to China, Hong Kong, and Taiwan
• High demand in high-value groupers, collected directly by traders/collectors
Prospective ness
Remark
• Prospective commodity for investment and for development of smallholder farmers, integrated with intercropping of corn, mulberry and/or jatropha • Needs support in the provision of good quality and leading seeds or seedlings • Also prospective for HTI development, which eventually would improve environment condition (Super Teak cultivation may be considered as reforestation program)
• Prospective commodity for investment in intensive livestock (cows) farming to trigger larger supply to fulfill increasing demand in local and inter-insular markets
• Prospective commodities for investment in the development of preprocession of seaweeds
• Needs empowerment of farmers in technical and mental capacity by government to improve the human resource quality and competitiveness in the sector. • Improvement in business management, from family business to agro-business manner.
• Needs fishermen empowerment in technical and mental capacity by government to improve the human resource quality and competitiveness in the sector.
• Prospective investment in grouper culture, to take advantage of closer access with market in East Asian countries
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Sector / Sub Sector
Commodity / Location
National Competitiveness
Pearl (primary product) Marine Culture
Location : Kab. Gorontalo Kab. Boalemo Kab. Pohuwato
Ecotourism (Tertiary Product) Tourism Location : Bone Bolango
Marine Tourism (Tertiary Product) Tourism Location : Bone Bolango
Industry
Processing of Coconut fruits (Secondary Products) Location: Kota Gorontalo
Mitrapacific Consulindo International
• Already existing 2 PMAs (1 in Tomini Bay; and 1 in Sulawesi Sea)
Opportunity and Limitation
+ Long coastline (north and south) and large area suitable for pearl culture (clean, non-polluted, shallow) - Farmers’ capacity less appropriate for pearl culture - Culture in pearl needs careful management, high skill and capital due to high-value of products + Sustainable markets for pearl, particularly in Japan
• National park in mountainous areas • Unique Maleo habitat
+ Secondary /complementary attractions to Bunaken tourism package + Conducive security condition suitable for interactive tourism attraction enjoyment - Less accessibility, especially from Manado - Attractions not ready for international tourists, especially high-end ones.
• No development of national gazette containing the uniqueness of marine parks of Indonesia ... • May be complementary for Bunaken
+ Provided that competitive attractions can be created, can be developed as additional/complementary to Bunaken packed in one package of tourism service. If under-valued, must be caused by ‘not strong enough magnetic power’ attraction. + Location is relatively close from Gorontalo - Less accessibility infrastructure/facilities, and attractions not ready for the target segment
• Integrated processing of coconut fruits not developed yet in Indonesia, except in Lampng • Available cultivation area can supply processing of coconut fruits sustainable. • Coconut fruits from North and Central Sulawesi cal be utilized
+ All parts of coconut trees can be utilized and processed to various different products. Coconut fruits also able to be processed into various foods + Various products of coconut: coconut oil, VCO, Nata de Coco, coconut powder, coconut skin fiber, carbon active, all with good economic value - Strong competition from North Sulawesi and the Philippines - Usually, most coconut fruits are processed into copra and sent to Bitung for coconut oil process
Market Market Segment
• Export market to Japan and domestic ‘upper consumers’
• International tourists in natural and adventure segments • High-end tourists
• International tourists in natural and adventure segments • Domestic tourists with specific interest (diving)
• Domestic and export
Supply and Demand
• High demand in pearl, parallel with increasing trend in fashion world
• International tourists in nature and adventure segments tend to be more aggressive and ignorance to security situation • Developing segments, dominated by young-aged and high-educated people • Mostly from Europe and Japan, with less spending rate
International tourists in nature and adventure segments tend to be more aggressive and ignorance to security situation Already developed segment acceptable worldwide, with certain criteria of marine spot attractiveness
• Coconut oil, powder and VCO for domestic markets • Carbon active, coconut skin fiber for export to Japan, UE etc. • Raw material support from inside Gorontalo, and outside (Central Sulawesi)
Prospective ness
Remark
• Prospective commodity in pearl culture investment, due to high value of product
• Needs fishermen empowerment in technical and mental capacity by government to improve the human resource quality and competitiveness in the sector.
• Less Prospective (Marginal) to be complementary to / additional comparative attraction for Bunaken/Manado tourism package
• Needs review assessment concerning the potential of Bogani Wartabone National Park as additional attraction for tourists with main destination to Bunaken/Manado
• Prospective Object for investment, maybe very potential provided that the tourism attractions available with good environment quality and meet attractiveness criteria
• Prospective industry for investment but needs development of integrated system, necessary for efficient input of raw materials for the effectiveness of product outputs • Necessary for the optimization of cost and production value.
• Needs review assessment concerning comparative potential of the tourists’ behavior
Needs change of business model, from family side activity to economic-scale business
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Sector / Sub Sector
Industry
Commodity / Location
Coconut wood processing (Secondary Products)
National Competitiveness
• Gorontalo and other Sulawesi provinces are typically large coconut producers
Location: Kab. Gorontalo
Handicraft
Kerawang (Secondary Product) Location : Kab. Gorontalo
IPP (Independent Power Plant) Energy
Location: Kab. Gorontalo
Mitrapacific Consulindo International
• Not widely known nationally, except in regional Sulawesi and surroundings • Segment in handicraft in textile embroidery
• Not leading sector in Gorontalo, tend to be minor sector • On the other hand, very influential and strategic to other sectors • So far, Gorontalo electricity power only from diesel which more expensive cost for operation
Opportunity and Limitation
+ Less supply of forest wood will make coconut wood for good alternative + Ready-to-cut coconut trees (old and unproductive) supply about 2.4 million, equal to 0.5 million m3 of sawed wood, not including potential supply from North and Central Sulawesi Well processing of coconut wood will produce + good quality of sawed coconut wood material suitable for building construction and furniture. - Not ell known nationally - Not varied usage/utilization
+ Already patented as indigenious handicraft product of Gorontalo Province + Mostly by women, strong in gender value and supportive to improvement of household income + Type of products: clothing (man and woman), home accessories, ornaments,etc) - Not commercially managed, most workers are part timers, leads to lengthy production time (less economical) - Motives, design patterns and material not varied enough, monotonous (in clotting, accessories and ornaments)
+ IPP is possible investment for private sectors (stipulated in PP) + Large energy generating using coal, less expensive + Increasing consumption of electricity from year to year, but short of supply. Scheduled electricity blackout already in effect, even in Kota Gorontalo. - Interconnectivity with North Sulawesi and Central Sulawesi (Sulutengo: Sulut, Sulteng, and Gorontalo) still in the blue print. - Other resources: geothermal still in the phase of research and exploration
Market Market Segment
• Domestic and export
• High-end domestic consumers • Export products to Malaysia and the Philippines • Initially only for souvenirs
• Local consumers in Gorontalo for households, industries, commercial and services, and potential for interconnection with North and South Sulawesi
Supply and Demand
• Requires good quality of sawed and finished wood to attract consumers
• Handmade and genuine clothing and home accessory products , consumable for international consumers, better and more exotic than machine-made mass production embroidery products by China . • Higher product price in international markets (completely handmade) • Need development of design and motives to meet diversified international market demand / tastes
• Coal-based power generator, minimum 50 MW (to be economically feasible), while additional power needed only 10 MW. • Needs to utilize / create interconnectivity with North and Central Sulawesi and change the already available diesel power generators (expensive to operate) .
Prospective ness
Remark
• Less Prospective (Marginal), considering supply availability of raw material and • Not ell known nationally and world market and still not varied usage/utilization
• Prospective industry for investment development, necessary to improve business management especially to improve quality and diversified usage, design and motives
• Need technical assistance by the government to improve designs and motives, kinds of usage to fulfill varied market demands and tastes.
Less prospective ness (Marginal) • Very strategic role for IPP to supply electricity shortage in Gorontalo. • But not economic if IPP only for Gorontalo, • Requires utilization in other regions (interconnected with North and Central Sulawesi .
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Addition Analyses for Other Commodities/ Sectors Sector / Sub Sector
Commodity / Location
Sugarcane (primary product) Plantation
Capture Fishery and Fish Processing Industry
Infrastructure
Location : Kab. Boalemo Kab. Pohuwato
Tuna and other pelagic fishes (Primary and secondary products) Location : Kab. Gorontalo, Kab. Boalemo
Export access facilities and Warehouses (Tertiary Sector/Services) Location: Kota Gorontalo
Mitrapacific Consulindo International
National Competitiveness
• Private has developed it, but the product has not yet significant in national level. • Suitable land and climate for sugarcane development, but quite limited in flat land availability.
• Limited amount of products with fishing ship capacity the lowest in Sulawesi • Number of business units in fishery also limited
• Gorontalo Port still in the category of Class IV and V (low performance and services) • Although direct export possible, port capacity is inadequate (long and lengthy ship queue)
Opportunity and Limitation
+ Strategic Commodity which can reduce dependency to import resulted from national consumption + Current product can support the needs on sugar in eastern Indonesia. - Industrial plantation, which require large land and flat land, because it utilize mechanization and harvest efficiency - If it is developed through partnership pattern, the price is not competitive like cacao, coffee - Land for sugarcane plantation in Java begin to decrease and the industry utilize old machine
+ Maximum Sustainable Yield (MSY) of Sulawesi Sea and Tomini Bay has not been exceeded + Fishing Port facilities in Kwandang and Anggrek have not been optimally utilized - Fishing ships’ capacity still limited in tonnage - Expensive cost and less available fuel caused strong limitation - Transshipment and illegal fishing practices still uncontrolled + Sharp increase of bulk cargo of corn grains, while export infrastructures (warehousing, conveyor etc) are inadequate + Gorontalo government plans the province to be Corn Center of Indonesia. Corn export is highly promoted + Increase number of export destination and product volume, indicating the success of the program - Currently only 10% of the production is for export - Mostly for domestic and local markets
Market Market Segment
Supply and Demand
• National market for eastern Indonesia consumption
• The demand for national sugar can not be fulfilled by national sugarcane industry. Most of national demand is fulfilled by import • Sugar production in several industries in Java is drastically decline. Development in other island is quite limited
• Fresh/frozen products for export through North Sulawesi (Bitung) • Fresh/frozen products for processing outside and inside of Gorontalo
• Corn orientation for export
Prospective ness
Remark
Less prospective ness (Marginal) • The prospect is not so clear concerning limited land availability for industrial plantation • Will require agriculture labor from other provinces
• Current sugar Industry is facing problem on plantation land expansion.
• Fresh tuna demand from Japan requires strong standards, and therefore limited in supply • Development of processed product of tuna for American and European markets has not optimally developed
Less prospective ness (Marginal) • for investment for development of primary products, and also processing. • Needs to broaden the product types to fulfill Europe and America market demands
• Needs fishermen empowerment in technical and institutional capability by government to improve the human resource quality and competitiveness in the sector.
• Export using ships with capacity of 4,000 DWT. If 1 truck = 8 ton, about 500 trucks needed in each export • Definite need for development of warehouses, conveyor belts etc.
• Less prospective ness (Marginal) for private investment because actually export volume still limited • Prospective and strategic for government to support export performance and economic growth of Gorontalo
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4 STRATEGIC AREA
FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
4. STRATEGIC AREA GORONTALO PROVINCE
Following the change of status from kabupaten to province, Gorontalo had also formed several new kabupatens through splitting off the old kabupatens. In the early stage of province establishment, Gorontalo only covered three regions (Kota Gorontalo, Kabupaten Gorontalo and Kabupaten Boalemo), which was previously under the administrative control of North Sulawesi Province Government. Having officially established in December 2000 through UU No. 38/2000 and realized in February 2001, policy development of administrative matters was carried out immediately. Two years afterward through UU No. 6/2003 (February 2003) Kabupaten Gorontalo split into two kabupatens, namely Gorontalo and Bone Bolango), and Kabupaten Boalemo into Kabupaten Boalemo and Kabupaten Pohuwato. In December 2006 a proposal of the formation of new Kabupaten North Gorontalo, another splitting-off of Kabupaten Gorontalo, was approved by the central parliament. The official establishment, however, has not been realized so far. Certain development activities like infrastructure development and economic are still concentrated in the major districts or in the capital of the province. The cities usually play strategic role both as the center of economic and governmental administration. Regions in Gorontalo can be divided into two types: (a) Strategic areas for production / industry and distribution centers: The strategic areas cover Kota Gorontalo and its surrounding area, Kabupaten Gorontalo. As stated before, the two localities have large and fertile land area, although most of it with slope more than 25%, where various food crops, plantation and forest products have been dominant for decades. Long south and north coastlines of Kabupaten Gorontalo and large sea areas of Tomini Bay and Sulawesi Sea off the coastlines are rich with fish and marine products. The two localities are also equipped with appropriate infrastructures and transportation facilities to support various activities for production or distribution. Kota Gorontalo is a strategic area, it plays role as the center for administration and economic activities (industry and distribution). The seaport in Kota Gorontalo is an entrance gate for transportation of passengers and various products from/towards Gorontalo Province. Kabupaten Gorontalo, besides equipped with 2 strategic sea ports that are important for cargo distribution, agriculture, animal husbandry, and fishery, also become production center for agriculture and fishery. (b) Strategic areas for production centers: The areas cover Kabupaten Boalemo, Kabupaten Bone Bolango and Kabupaten Pohuwato. Those three districts have a strong potentiality to be developed into production center for agriculture, plantation, fishery and also forestry products.
Mitrapacific Consulindo International
4-1
FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Various products of the regions are very strategic for further development of processing industries and distribution activities in Gorontalo. Within the economic relation context, the role of Gorontalo Province among other internal regions in the province, other provinces in Indonesia, and export market locations is shown in the linkage map below. Meanwhile, the development of goods transport flow from and to Gorontalo (2001-2005) is shown in Table 4.1, and flow of goods in Gorontalo Seaport is shown in Table 4.2. Table 4.1 Shipping Activity of Gorontalo Seaport (2001-2005) No.
Description
Unit
A
International Shipping
1
Foreign
2
Domestic
3
Special
Call GRT Call GRT Call GRT Call GRT
Total B
2001
Year 2003
2002
2004
2005
3 3,146 2 4,516 1 1,787 6 9,449
5 5,902 1 1,224 1 1,787 7 8,913
0 0 31 19,244 0 0 31 19,244
0 0 7 7,767 0 0 7 7,767
14 22,875 1 1,721 0 0 15 24,596
116 121,892 0 0 26 156,572 63 12,151 134 137,486 0 0 339 428,101 345 116
100 152,901 0 0 32 192,704 111 9,516 101 145,454 46 12,698 390 513,273 397 100
46 106,676 78 189,132 40 240,880 108 9,604 126 136,585 40 17,573 438 700,450 469 46
54 92,350 86 207,946 7 42,154 76 6,404 87 154,711 27 22,790 337 526,355 344 54
58 74,965 72 189,078 42 252,924 99 9,871 111 202,864 23 25,212 405 754,914 420 58
Domestic Shipping
1
Goods
2
Container
3
Passenger
4
Passenger (Traditional Ships)
5
Special
6
Others
Call GRT Call GRT Call GRT Call GRT Call GRT Call GRT Call GRT Call GRT
Total Total A + B
Source: PT Pelindo IV, Gorontalo
Table 4.2 Flow of goods in Gorontalo Seaport No. Description A Foreign Trade 1 Import 2 Export B Domestic Trade 1 Unload 2 Load Total Import+Unload (A1 + B1) Total (Export+Load) (A2 + B2)
Unit
2001
2002
2003
2004
2005
T/M3 T/M3
1,550 6,402
2,850 6,830
18,850
11,947
40,960
T/M3 T/M3 T/M3 T/M3
151,898 59,540 153,448 65,942
124,350 42,830 127,200 49,660
334,444 107,376 334,444 126,226
333,948 87,312 333,948 99,259
334,657 137,835 334,657 178,795
Source: PT Pelindo IV, Gorontalo
Mitrapacific Consulindo International
4-2
FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
Figure 4.1 Map of Gorontalo Economic Linkage 121 30 BT
U
0
3
6
12
122 00 BT
122 30 BT
123 00 BT
123 30 BT
Domestic: Cow, Corn
18 km
L
P.Tolinggula
PROVINSI SULAWESI TENGAH
N UNU PEG
N GA
PA
S
u
l
a
e
s
i
P.Maa P.Duyanumo
P.Motua P.Lahu
Tg.Dunu
P.Lampu P.Lamasi
G.Pomonto
G.Pentolo
w
Export: Coconut Products, Fish, etc.
Bulonlio
G.Libodongu
t
Tg.Keramat Tl.Bolombo
H LELE
G.Buhu
u
Tg.Babi
Tg.Pasirputih
Tolinggula
01 00' LU
a
Tg.Molu
P.Dudepo
G.Bubalango
G.Nabe
Tg.Labuandolong
P.Motinggolo
Ke Baroko
Alinggola
P.Ponelo Teluk Kwandang
Ds.Popaki
G.Balaloupa
Kabupaten Gorontalo
G.Batutiga
Kabupaten Pohuwato
G.Palualo
Pegunungan Bapi
Kabupaten Boalemo Sidomulyo
Pancakarsa I
G.Marisa
G.Panu
G.Padang G.Timbuale
00 30' LU
Lembo Tirisora
ng
P.Paniki
P.Tarolaya P.Manuangi
Bonggo
G.Tilempede
G.Lomali
Mo uto
PROVINSI SULAWESI UTARA
G.Molalahu G.Oliboe
G.Moutong
Ke
G.Datanu G.Lowulowu
Domestic: Cacao
G.Pandet
Domestic: Coconut Products
G.Palajuli
Moluo
P.Pasiglogo
Randangan Pentadu
Tabula
Labutan Timur
Bolumato
Tj.Ombula
MARISA Tj.Panjang
Ds.Pona
LIMBOTO Bulila D.Limboto Payunga Tomulobulso
G.Tatuwoto
Duruma Selatan Manggodila Olihuta Blamu
G.Molintogupo
Kabupaten Bone Bolango
G.Tapambundu
SUWAMA G.Lantadutomula
P.Limba Tj.Wolibadu
G.Ledaleda
Teluk Gorontalo
Tj.Olinlata
G.Tanewa
Oluhuta
P.Montuli
P.Lahe
RANTAN AAN
Ayula Selatan
Kayubulan
P.Kambing
PEGU NUNG AN PE
G.Olaola
Ds.Ulapoloa
GORONTALO
Bubaa
P.Mahuparbodaa
Tj.Boloaliyo P.Pomohadoa
P.Popayatobesar
P.Sangi
TILAMUTA
Suka Meladu
P.Lamuadae
Dulamayo
G.Oyile
G.Langge
Moholahu
P.Puntu Dao
Lamu Pulubala
Mulombulahe
Bilungala
P.Bitha
G.Imani
G.Balobolanga
Ke Moliba
LEGENDA : Kota Provinsi Kota Kabupaten
T
Kota Kecamatan Sungai
Domestic: Fish
e
l
u
k
Domestic: Fish
T
o
Export: Fish
m
i
n
i Domestic: Corn, Fish,
Export: Corn, Fish, etc
Strategic areas for production center
Internal products distribution from production center
Product export through airport
Strategic areas for production /industry and distribution center
Regional and export
Regional
Mitrapacific Consulindo International
gu
Tl.Tahidaa
4-3
FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
4.1
Strategic Area as Production/Industry and Distribution Center
4.1.1
Kota Gorontalo: Kota Gorontalo is the capital city of the province where the centers of administrative and economic activities of the province are located. The area of the city is 64.79 km2 or 0.53% of the total province area. Kota Gorontalo directly borders with or surrounded by Kabupaten Gorontalo and Kabupaten Bone Bolango, and it consists of five sub-districts (kecamatan) and 46 kelurahan areas. The population of Kota Gorontalo in the year 2004 was 148,080 people or 16.5% of that of Gorontalo Province, with the population density of 2,286 people/sqkm. During the year 2003, Kota Gorontalo had experienced two times of splitting-off process of its kecamatans which has resulted in population growth. Economic of Kota Gorontalo during the year 2004 showed improvement, as indicated by the 6.20% increase of the 2004 GRDP as compared to that of the previous year. The GRDP of Kota Gorontalo in the year 2004 based on constant price was Rp.262,911 million. Main Sectors / Main Potential Commodities Major economic sectors that dominate the GRDP are tertiary in nature like Trade, Hotel and Restaurant with contribution around 34.75% and Service Sector (government and private services) with contribution around 20.99%. The other sector is Transportation & Communication, with contribution to the GRDP of around 20.63%. Infrastructure Total road length of Kota Gorontalo as of June 2006 was 158.87 kilometers, comprises national, provincial and kota roads. All of the roads are already asphalted and mostly (75%) in good condition, and the rest (25%) are damaged. As already stated previously, Kota Gorontalo has one sea port that serves export and inter-island transportation, besides passenger ferry port that serves regional route. Gorontalo seaport is the main entrance for products from and towards all regions in Gorontalo Province. Some important cargos are corn, fish, rattan, sugar, copra, etc. Gorontalo seaport is categorized as Class IV in the national port system with the capacity of 5,000 GT. The export activity mostly for bulk corn using bulk ship with capacity of 4,000 GT, while for passengers the port can serve Motorized Passenger Ship (Kapal Motor Penumpang / KMP) or Ferry with capacity of 750 GT. The physical features and business activities of Gorontalo Seaport are as follows: i. Working Sea Area (Daerah Kerja Perairan) is about 106 ha, and the total Sea Necessity Area (Luas Kepentingan Perairan) is about 1,754 ha; ii. Total land working area (terminal, warehouses, administration offices, maintenance/service workshops, etc) is 40,000 sqm. Facilities available are Piers (2 units, 119.50 m and 60 m long); Warehouses (2 units,
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
1,000 sqm and 560 sqm); Accumulation ground (600 sqm); Passenger Terminal (500 sqm); and Administration Office (500 sqm). iii. Number of sea transportation service companies for passengers and goods (national and regional): 10, including PT Pelni (national route for passengers and goods), PT Pertamina (oil) and other 8 smaller cargo/passenger transportation companies; iv. Number of loading and unloading companies: 4 (four), namely PT Sarana Bandar Nasional; PT Tilong Kabila; PT Tata Nusa Tirtasarana; and PT Muara Bone Bahari; and v. Number of Sea Freight Forwarders (Ekspedisi Muatan Kapal Laut / EMKL): 7 (seven), namely PT Kurnia Muara Bone; PT Karya Darly; PT Yusminto; PT Gunung Ambang; PT Eboni Putra, PT Guntur Semesta; and PT samudra Adhiguna. Labor Force Number of population above 10 years old that included as labor force in the year 2004 was 60,314 person, comprises 50,798 persons employed and 9,516 persons (15,8%) are unemployed. Most of the labor force of Gorontalo is engaged in service sector, which was 27.0% and trading sector for about 26.8%. Electricity sector is quite small, only 0.5%. Kota Gorontalo has universities and academies that fully support the improvement of human resources quality. Those universities are Universitas Negeri Gorontalo, Akademi Komputer, etc. 4.1.2
Kabupaten Gorontalo: Kabupaten Gorontalo is bordering with Sulawesi Sea In the north, Kabupaten Bone Bolango and Kabupaten Bolaang Mongondow (of North Sulawesi Province) in the east, Tomini Bay in the south, and Kabupaten Boalemo and Kabupaten Buol (of Central Sulawesi Province) in the west. The total kabupaten area is 3,426.98 km2 or 28.30% of Gorontalo Province, divided into 17 sub districts. Currently available lands are mostly suitable for food crops as well as for plantation. The province also has a wide area of open seashore included in ZEE in the north area (about 320 km coastal line). Population of Kabupaten Gorontalo is 426,296 inhabitants or 50.01% of the total population of Gorontalo Province. Average growth rate of the population is 1.64% per annum with population density at 121 inhabitants/km2. Number of labor force in the year 2005 is about 244,545 people, with number of unemployment about 9.92%. Most of the labor force are engaged in Agriculture Sector (about 60.15%), followed by Service Sector (12.64%). Economically Kabupaten Gorontalo had experienced a positive growth in the year 2004, which is shown by an annual increase of GRDP for about 6.21%. The amount GRDP based on constant price for the year 2004 was Rp 458,979 million. Main Sectors / Main Potential Commodities Major sectors predominate the economy of Kabupaten Gorontalo are Agriculture (35.31%), followed by Service Sector (about 22.93%, comprises government and private sector services). The third dominant is processing industry with around
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FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
11.19% of contribution, and Trading-Hotel & Restaurant Sector that contributes 10.16% to the GRDP. In Agriculture, covering both primary and secondary products are corn (primary), coconut (primary and secondary that are: coconut skin fiber, copra, and coconut oil), and Animal Husbandry (primary products). o
Sub-sector of Food Crops: the commodities are paddy field (with around 27,185 ha harvesting area in 2004 and production 135,488 ton), corn (harvesting area 28,772 Ha and production 131,504 ton). Corn exported from Kabupaten Gorontalo was about 91,399 ton or 69.5% of the total production .
o
Sub-sector of Plantation: Major commodity is coconut, with area of 14,480.32 Ha and production 25,532,439 ton.
o
Sub-sector of Animal Husbandry: Cattle population until September 2005 was 104,115 head, which was dominated by local cattle species for around 94,477 head, new superior cattle around 8,97% or 9,340 head. Number of inter island cattle delivery with destination to Kalimantan experienced a significant increase with annual means of 40% (2001-2005).
Fishery Sector: Total length of coastal line in Kabupaten Gorontalo is 277.40 Km, comprises 198.00 km in the north coast and 79.40 km in the south coast. o Catching Fish (tuna, skipjack, small pelagic) that are exported in the form of frozen products. o Cultivation: -
Sea weeds (Kwandang and Anggrek), the product is in the form of dried raw material, absorbed by processing industries in Makassar and Surabaya.
-
Pearl culture (Anggrek) includes raising the mother pearl shell and pearl making through pearl core insertion into the mother shells. The product is fully exported to Japan.
-
Brackish water fishery culture has not yet developed well regarding limited land and uncompetitive production if compared to South and Southeast Sulawesi provinces. Brackish water fishes are locally marketed.
Infrastructures There are two seaports that function as passenger and cargo ports. The two seaports are Anggrek Seaport with the capacity of 10 thousand DWT and Kwandang Seaport which function for export port. The Kwandang Seaport also functions as fish landing port equipped with fish processing facilities. Already discussed in Sub-chapter 2.3, Jalaluddin Airport is the air transportation gate to and from Gorontalo Province. Up to 2003, Jalaluddin Airport in Gorontalo was only used by aircrafts with about 50 passengers (Fokker 27 or ATR). In 2003, upgrading of runway was carried out. With the new 2,250 m long and 30 m wide runway can serve Boeing 737-400 series (150 passengers) and MD-90 (153 passengers). Night landing system is also facilitated.
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Government Policy Amongst government effort to improve service is establishment of integrated service unit for licensing process. The objective is to simplify the licensing procedure, transparent cost, and punctuality of finishing process.
4.2
Strategic Areas for Production Center
4.2.1
Kabupaten Boalemo Total area of Kabupaten Boalemo is 2,510.40 km2 or 20.55% from total area of Gorontalo Province. It is divided into 7 sub districts (Kecamatan) and 67 villages with two newly split-off kecamatan in year 2003 namely Botumoito and Paguyaman. Number of Boalemo population in 2004 was 109,869 inhabitant or with density 44 inhabitant per km2. The capital city of Boalemo is Tilamuta District. It can be accessed directly from Gorontalo within about 2.5 hours by land transportation (Trans Sulawesi). Mountainous areas are suitable for plantation and palawija. Condition of marine waters generally still good and less polluted, which means suitable for marine aqua culture. After split into two kabupatens namely Kabupaten Puhowato and Boalemo, economic of Boalemo 2004 increase 6.04% per annum from the previous year with value of GRPP around Rp 330,863 million based on prevail price. The growth mainly supported by agriculture sector, Communication, Electricity, Electricity and Waters. Major Sector / Major Commodities Sectors with dominant contribution to GRDP of the province consist of Primary Sector such as Agriculture (37.69%) and Tertiary Sector, dominated by Service Sector and Trade-Hotel & Restaurant sectors (about 18.27% and 13.49% of the GRDP respectively). Agriculture products are mainly utilized by food industry, while the secondary sector like processing Industry contributed only a small portion (7.33%) to the economy of Boalemo. Potential Major Sectors:
o
Agriculture: Corn (primary product) Corn is a major commodity of Agropolitan Program in Boalemo District. It has also been major export commodity of Gorontalo province to several export destinations like Malaysia and Korea. Beside exported, corn also consumed by local people.
o
Plantation: Coconut (primary product) Land potentiality for plantation in Kabupaten Boalemo is about 43,002.12 Ha. Around 14,542.01 Ha or 33.82% has been utilized, while the remaining 28,460.11 Ha or 66.18% has not been utilized yet. Currently, there are 6,722 people are engaged in coconut plantation, joined into 334 farmer groups.
o
Animal husbandry: Cattle (primary product) Population of cattle in the year 2004 was 20,935 heads. Cattle have been cultivated traditionally for a long time with a good growth (6.4% from the previous
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year, 2003). Cows are also routinely delivered to Kalimantan. Cattle business has been developed well in Kabupaten Boalemo especially in Kecamatan Wonosari. o
Fishery: Catching Fishery: tuna, skipjack, small pelagic fishes and demersal fishes (groupers), and marine culture: sea weeds. Kabupaten Boalemo is stretched along the south coastal area of Gorontalo Province. Among seven kecamatans in Kabupaten Boalemo, only one kecamatan, i.e. Kecamatan Wonosari, that does not have coastal area. Coastal line pattern of Boalemo creates several small bays. The bays are well protected from big waves in all seasons, and usually shallow. Such condition is very suitable for the development of seaweed culture. Infrastructure Land transportation of Kabupaten Boalemo served by 102 km of provincial and 668.8 km of district roads. Electricity is supplied by PT Perusahaan Listrik Negara (PLN) through 3 distribution units that are Sub Branch of Paguyaman, Payment Point Harapan, and Kantor Jaga Tilamuta. Installed capacity in the year 2004 was 5,637,750 VA, while sold electricity was 7,195,016 VA. Current fish port of Boalemo is equipped with processing facility such as ice factory. Government Policy Government of Kabupaten Boalemo determined the Basis of Regional Development Pattern based on local regulation No. 02 year 2001, which had became a basis for all development activities. The priority sectors are agriculture, fishery and marine, forestry and mining, and Tourism. In the implementation, government of Kabupaten Boalemo had formulated five major programs (LIPUU) that coves: community empowerment, human resources development, Community health development, Supporting Sector and Improvement of Public Service. Those five programs mostly directed to improve, support and accelerate the development of community economic through strengthening of basic sectors that are agriculture and marine fishery.
4.2.2
Kabupaten Bone Bolango Kabupaten Bone Bolango is a new kabupaten established in 2004 after split-off from kabupaten Gorontalo. Geographically, it is directly borders with Kabupaten Bolaang Mongondow (North Sulawesi) and Kecamatan Atinggola in the north. In the south it borders with Kota Gorontalo and in the west with Kecamatan Telaga and Kabupaten Gorontalo. Area of Bone Bolango is 1,984.31 Km2 or 16.24% from total area of Gorontalo. The outer kecamatan is Kecamatan Bone Pantai (Bilungala) which was 46 kilometers from the capital city of t It is located 46 km away from capital city of kabupaten Bone Bolango. Population of Bone Bolango is 122,458 inhabitants, distributed in 4 kecamatans. Population growth rate is 2.29% and average population density is 62 inhabitants per km2 .
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Major sector Dominant economic sector of Kabupaten Bone Bolango is agriculture, which contribute around 35.14% to the GRDP, followed by Trading/Hotel/and restauran sector that contribute 15.45%, the followed by processing industry about 14.48% and Service Sector that contribute 13.23%. Agriculture sector is mostly supported by food crops sub sector that is rice and corn. Rice production in year 2004 is 24,431.9 ton from total harvest area of 3,511.9 Ha, while corn production is around 15,428.9 ton from 3,832 Ha of harvesting area. Beside food crops commodity, Bone Bolango has also potentiality of community plantation that is coconut, which has around 4,921.24 Ha of plantation area and 7,292.68 ton of production. Cattle breeding (animal husbandry) has also good potentiality concerning increase of national meat consumption. Population of cattle of Bone Bolango in 2004 was 29,381 head, increase 2.5% from the previous year. Sub sector of fishery is also one of major sector of Bone Bolango. Major product are:, tuna, skip jack, small pelagic and demersal (grouper). The other commodity is sea weed. Bone Bolango has around 152 km of coastal line of Tomini Bay. 4.2.3
Kabupaten Pohuwato Kabupaten Pohuwato located in the west area of Gorontalo Province, borders with kabupaten Parigi Moutong (Central Sulawesi Province). Some parts of the kabupaten also borders with waters of Tomini bay on around 160 Km of coastal line. Puhowato has the largest area in Gorontalo province, which is 4,491.03 Km2., comprises 7 Kecamatan and 75 villages. Its capital city is Kecamatan Marisa. Population number of Pohuwato in year 2004 was 106,865 inhabitants or 16.5 percent of Gorontalo populaiton. Density of Pohuwato is 26 inhabitants per kilometers square. Pohuwato experienced improvement of economic condition in 2004, which was indicated by the increase of GRDP at 6.95% fro the previous year (2003). The amount of GRDP in 2004 was Rp 377,140 million based on 2000 constant price. Major economic sector of Kabupaten Puhowato is agriculture with 36.13 percent of contribution, mostly supported by food crops sub sector. The second dominant sector is Trading/Hotel/Restaurant that contributes 16.27 percent, and the third is processing that contributes 14.69 percent. Major Commodities Major commodities of food crops sub sector is rice and corn. Rice production in year 2004 was 112,096.92 ton from 2,647.10 Ha of harvesting area. Corn production was 183,520.22 ton in 2004 from 38,151.75 Ha of harvesting area. The other sub sector is smallholder plantation mainly coconut plantation that has area of 12,107.05 Ha and production 18,219.90 ton. Animal husbandry sub sector also has good potentiality, cattle population in 2004 was 40,473 head. In the future it has good prospect in line with increase of met consumption.
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Sub sector of fishery is one of major sub sectors of Pohuwato people. Dominant product is catched fish like tuna, skip jack, small pelagic, demersal fish (grouper), and marine sea weed culture. Infrastructure Length of provincial road of Pahuwato is 43.30 km, while the district road is 281.50 Km.
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5 INVESMENT CLIMATE
FINAL REPORT Investment Opportunities Study for Gorontalo Province BKPM - JICA
5. INVESMENT CLIMATE PROVINSI GORONTALO
Investment climate in Indonesia in general experienced difficult time during the economic and political crisis in 1998. After the crisis in 1997, the realization of investment (foreign and domestic investments) experiences a relatively drastic downturn. As an illustration, the realization of foreign investment fell from US$33,788.8 million in 1997 to US$10,884.5 million in 1999. After general election in 1999, investment once improved, however it experienced a relatively significant downturn again in 2001 and 2002, at the same time as the implementation of regional autonomy as stipulated through Law No 22 and 25 Year 1999. In year 2002 the foreign investment realization rate reached US$ 3,085 million. Up to 2006, the investment realization keeps improving although it has not reached its recovery level as that of in 1997. The independent third party (World Bank, Standard & Poor) still so far assessed that the level of investment trend in Indonesia as the lowest within the Southeast Asian region. The downward of investment trend is caused by the relatively abundant number of instability and uncertainty conditions particularly in the aspects of legal, security and law enforcement, man power, infrastructure, and bureaucracy. Such condition made worse by the economic pressure which is engendered by inflation and the increase of global petrol price. Various recovering efforts have been undertaken by the government, especially through the fundamental reform in the political and economic sectors. Various improvements start showing, even though to reach the perfect recovery stage still need a greater commitment from all parties to realize all the agreed-upon agenda. Besides, local governments are also demanded to be able to make detailed and objective policies like in the form of strategic plan for investment development.
5.1
Legal Aspect and Bureaucracy
Indonesian Government keeps showing serious effort to attract investments through, among others, the improvement of legal aspect and regulations at the central and regional government levels. The main issues in the legal aspect today are the issues of licensing, taxation, and investment intensives.
5.1.1
Investment Licensing
Licensing at the Central Government Level Currently, the Issuance of Investment Approval refers to the Presidential Decree No 29 Year 2004 regarding the administration of investments (foreign/local) through one roof service system. The Presidential Decree stipulates that the administration of investments
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in particular those that related to approval service, licensing, and investment facility (foreign and local investments) are administered by Investment Coordinating Board. Other than providing investment approval, the authority of Investment Coordinating Board also includes the issuance of the following permits: Permanent Business Permit (Izin Usaha Tetap), Limited Importer License Procedures (Angka Pengenal Importir Tambahan), Plan for Employment of Foreign Personnel (RPTKA), Expatriates work permit (IKTA), Limited Stay visa (Visa Tinggal Terbatas), Custom and Excise Facilities for Capital Goods and Supporting Raw Materials. With reference to the Presidential Decree, Investment Coordinating Board has duties to coordinate with all department or other institutions, including with the governments of regencies, cities and provinces that foster investment business sectors that draw all investment approval either foreign or domestic ones to central government through the Investment Coordinating Board. In term of substance, the above-mentioned regulation that regulates investment procedure is very important to attract investment as long as it can be implemented well and efficiently. Nevertheless, viewed from the existing regulations, the aforementioned Presidential Decree is very poor because the substance of it contradicts with Law No 22 Year 1999. Therefore, it is assumed that the Presidential Decree will be hard to implement, except if it elevated to a higher level that is in the same level as Law. Alternatively, an amendment to the articles in the above-stated Law that contradict with the substance of the Presidential Decree (LPEM UI, 2004) In reality, the implementation of the Presidential Decree still does not run effectively, particularly because there still are interest contest among parties who feel as the one who has the biggest interest over the investment in the region that is among central government, regional government, and related government’s agencies. So far, regional governments have also complained about the emergence of various problems due to the centralization of investment licensing. The example of problem that emerges is the uncertainty about area that can be used by the investors even though the investors have obtained approval from central government. Such problem can be avoided if provincial governments have greater authority. Other than investment approval at the central government level, some points of licensing involve institutions in the regions, especially at the level of Regency such as Regency’s Public Work Agency which involved in the issuance of Building Development Permit (IMB); National Land Agency (BPN) in regencies and provinces which involved in the issuance of Right of Cultivation/Right to Build (HGU/HGB) and location permits; Local Development Board (Bapedalda) of Regencies/Cities which involved in the issuance of Environmental Impacts (AMDAL); and Local Secretariat which involved in the issuance of a Nuisance Act Permit (UUG/HO), etc. Some issues that still need to get attention in the bureaucracy in the regions are: •
Bureaucracy procedures in some regions are still too long and not efficient yet.
•
The lack of transparency and high cost because apart from official cost there are also unofficial fee that must be paid by companies/business people.
Despite of that, some efforts already taken to improve investment climate in Gorontalo, such as: •
A Perda concerning Ease of Investment has been established. However, technical and implementation guidance should be formulated and stipulated.
•
One roof service system for investment matters (permit process and other related administrative requirements) has been the province government commitment as
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crucial part of the ease of investment policy. Following up the policy, a One Roof Service Office in Kota Gorontalo and One Roof Service Unit in Limboto (capital city of Kabupaten Gorontalo) have been in good operation. •
Gorontalo is highly rated terms of institutional capability by KPPOD (Komite Pemantauan Pelaksanaan Otonomi Daerah). Kota Gorontalo was ranked among best top 10 in terms of institutional service, consistency, transparency and leadership etc.
•
Website for market and other business information.
5.1.2
Taxation and Retribution
Central Government Taxes Among those taxes that drawn by the central government such as Income Tax (PPh) and Value Added Tax (PPN), one that becomes an important issue is Value Added Tax on primary products of about 10% by Law No 18 Year 2000. In the sector of farming, the Law is the second amendment to the Law No 8 year 1983 on Value Added Tax on Goods and Services, and Selling Tax on Tax-Imposed Goods. The policy of Value Added Tax of 10% is considered by many parties as not profitable to the development of local secondary industry (manufacturing). Business people who work in agro industry feel burdened, discriminated, which in turn cause business trend that is becoming not conducive. In 2004, 10 primary commodity associations pushed the government cabinet of United Indonesia to revise the implementation of Added Value Tax of 10%. The ten associations are Coffee Importer Association Jakarta), Askindo (Indonesian Cacao Association), ATI (Indonesian Tea Association), Association of Cacao & Chocolate Companies Business People Indonesia, Sugar Association Indonesia (Asosiasi Gula Indonesia), Pepper Exporter Association Indonesia (Asosiasi Eksportir Lada Indonesia), Rubber Businessmen Group (Gabungan Pengusaha Karet Indonesia), Indonesian palm Oil Commission (Komisi Minyak Sawit Indonesia), Forestry Business People Association Indonesia (Asosiasi Pengusaha Hutan Indonesia), and Shoes Business People Indonesia . The other issue is government‘s plan (under the responsibility of Internal Affairs) to impose tax on regional governments in Indonesia for petrol fuel consumption by industry and already agreed by all regional governments. The tax charge will be a new burden to the local manufacturing industry because it impacts on the increase of production cost. Today, the biggest production component to the local industry in this country is labor and energy cost that could reach to 20% of the total production cost, thus the imposition of tax on Petrol fuel consumption might make domestic industrial performance worse. Regional Tax and Retribution Regional Autonomy does not meant for making the business difficult, although in fact there are a lot of business people who complaint about the new taxes and retributions which is implemented by respective local government, in relation to the regional autonomy authority. The presence of new taxes/retribution which is implemented through Regional Regulations (Perda) and the tendency that regional regulations tend to change easily (inconsistent) makes people worry that the uncertainty of investment cost that quite troublesome to business people.
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Indonesian Chamber and Industry in 2001 said that of 910 regional regulations on taxes/retribution, about 14.7% regional taxes regulations and 72.2% regional retribution related to business world, directly or indirectly. Other than official retribution, up to now there are still a lot of unofficial/illegal levies from particular parties around the investment location which is routinely done every year as reported by many business people in the region. Despite of that, some efforts already taken to improve investment climate in Gorontalo, such as: •
Provincial Government already implemented no retributions fee for investment
•
In Kabupaten Gorontalo, retributions considered as not conducive to investment have been reduced to 0%, covers 14 retributions: (1) Utilization of Shallow and Surface Water; (2) Parking; (3) Map printing cost; (4) Fish auction & fish landing location/port; (5) Sale of locally produced products; (6) Use of chainsaw; (7) Collection and sale of firewood; (8) Oil and gas business; (9) Electricity business; (10) Testing and examination of food crop and horticulture seeds; (11) Control and empowerment of food crops and horticulture. (12) Testing of Measure and Scale equipments; (13) Permit for security system for plantation business; and (14) Timber collection location
•
A locally owned business enterprises (BUMD) have been established in Kota Gorontalo (province level) and Kabupaten Gorontalo with function of: (1) Support agropolitan program; (2) Assurance of buffer price for corn, and other possible agriculture strategic products; (3) Other business in transportation, construction, agro industry etc.
•
5.1.3
Collateral funding for SMEs is provided through APBD.
Investment Incentives
Fiscal Incentives Fiscal incentive to investment is put into effect by the central government through the Government’s Regulation (Peraturan Pemerintah) No 1 Year 2007 regarding the Income Tax Facility on Investment in Particular Business Field and/or in the Particular Regions, which revises the Government Regulation No. 148 year 2000. The facilities that are provided by the regulation are:
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1) An Investment Tax Allowance in the form of taxable income reduction as much as 30 % of the realized investment spread in 6 (six) years or 5% in each year. 2) Accelerated Depreciation and amortization, 3) A longer period of compensation for losses more than 5 years but not more than 10 (ten) years, and 4) Imposition of income tax on dividends paid to non resident tax subjects at 10% (ten percent), or a lower rate pursuant to the double taxation avoidance agreement in force. According to Government’s Regulation No. 1/2007, the abovementioned Income Tax facility is provided for the 15 business fields and/or 9 business fields in particular regions. The 15 business fields are as follows: (1) Other Multifarious Food industries; (2) Textile and Garment Industries Groups; (3) Pulp, paper, and carton paper; (4) Chemical material; (5) Other Chemical Products; (6) Rubber and Rubber based Product; (7) Porcelain products; (8) Base Metals, Ferrous, Steel; (9) Non ferrous base metals industries; (10) Machinery and its Equipment; (11) Electrical Motor, generator, and Transformator; (12) Electronics and Telematics; (13) Land Transportation Equipment; (14) Shipbuilding and Repairs Industry; (15) Ferrous base metals industries. Meanwhile, the 9 business sectors in particular regions that enjoy the investment incentive are as follows: Table 5.1 Business Sectors in Particular Regions Enjoy the Income Tax Incentive based on PP No. 1 Year 2007 No
Business Sector
Area
1
Food processing Industries Group
Maluku, North Maluku, Papua, West Papua, North Sulawesi, South Sulawesi, Central Sulawesi, South East Sualwesi, West Sulawesi, Gorontalo
2
Natural Resources Processing Industries base on Agricultural Product
Nort Sulawesi, South Sulawesi, Central Sulawesi, SouthEast Sulawesi, West Sulawesi, Gorontalo, NTB, NTT
3
Paper or Carton Packaging and Box Industries Group
Outside Java
4
Plastics Goods Industries Group
Outside Java
5
Cement, Lime-stone, and Gips Industries Group
Papua, West Papua, Maluku, North Maluku, North Sulawesi, NTB
6
Furniture Industries Group
Outside Java
7
Integrated Fishery Industries With Marine Fish Capture
Provinces borders with Indian Ocean: Nanggroe Aceh Darussalam; North Sumatera; West Barat; Bengkulu; Lampung; Banten; West Java; Central Java; D.I Yogyakarta; East Java; Bali; NTB; NTT; Maluku; Papua
8
Integrated Fishery Industries With Marine Crustacean Capture
Provinces borders with Hindia Ocean: Nanggroe Aceh Darussalam; North Sumatera; West Barat; Bengkulu; Lampung; Banten; West Java; Central Java; D.I Yogyakarta; East Java; Bali; NTB; NTT; Maluku; Papua
9
Integrated Fishery Industries With Marine Mollusk Capture
Provinces borders with Hindia Ocean: Nanggroe Aceh Darussalam; North Sumatera; West Barat; Bengkulu; Lampung; Banten; West Java; Central Java; D.I Yogyakarta; East Java; Bali; NTB; NTT; Maluku; Papua
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Other than that, in response to the proposals from various parties including primary commodity association, government has given incentives such as the eradication of Value Added Tax of 10% to primary products (including cacao, coffee, shrimps, palm coconut, etc.) as regulated in Law on Added Value Tax Year 2001 through a new regulation no 7 year 2007 regarding the third amendment to Government Regulation no. 12/2001 on the Import and/or Delivery of Certain Strategic Taxable Goods Exempted From Value Added Tax. The complete list of primary products enjoys the aforementioned incentives are as follows: Table 5.2 Strategic Commodities Enjoy the VAT Eradication Incentives Based on PP No. 7 Year 2007 Commodity Plantation Cocoa Fruits
Horticulture
Vegetable
Food Crops
Cotton
Banana
Mushroom
Paddy
Coffee
Kapok
Orange
Root Vegetable
Corn
Palm oil
Hemp, Rosella, Jute, Abaca
Mango
Leaves
Nuts
Aren (Palm)
Cinnamon
Zalacca
Cassava
Cashew nuts
Quinine.
Pineapple
Green bean Roots
Pepper
Vanilla.
Mangosteen
Nutmeg
Patchouli Oil
Rambutan
Cloves
Castor Oil
Durian
Rubber
Lemongrass, citronella.
Melon, Watermelon
Tea
Volatile oil
Jackfruit
Tobacco
Coconut
Sugarcane Commodity Animal Husbandry
Forest Product
Cow, Buffalo
Wood
Pig Sheep
Fishery
Rattan
Shrimp
Lobster
Palm Oil Wood
Agathis
Artemia
Squid,
Bamboo
Shorea
Ornamental Fish
Octopus
Poultry
Rubber Wood
Kemiri
Seaweed
Crabs
Dairy
Tengkawang
Shell, oyster
Sea cucumber
Import Duty Facility Certain regions outside Java Island that get the facility are Sumatera, Sulawesi and Papua. The complete list of business sector and group that get the facility is presented on appendix 6. -
The relinquishment from import duty on machinery import that related directly to industrial activities/service industry (Decree of Financial Minister 135 I KMK.05 I 2000 dated 1 May 2000)
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The relinquishment of import duty on the import of raw material/supporting material for the production in line with the mentioned-capacity.
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Other Facilities - The relinquishment from ownership changing fee when registering the ship for the first time in Indonesia. -
Particularly for Foreign and Local Investments that are located in the Eastern regions of Indonesia will get additional facilities such as: • 50% reduction on Land and Building Tax for 8 years since the license is obtained (Ministerial Decree of Financial Minister 748/KMK.04/1990, dated 28 July 1990). • Loss compensation can be given for those that not more than 8 years starting from the first year when the loss occurs. • Companies whose at least 65 % of its production is exported will be given facility that ease them to employ Foreign Labor (Governmental Regulations No. 92 Year 2000).
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5.2
For business people who do business in the Integrated Economic Development (Kawasan Pengembangan Ekonomi/KAPET) will be given special incentive (Governmental Regulations No. 92 Year 2000). •
Income Tax: Income Tax on capital goods and raw/supporting materials which directly related to production.
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A reduction and amortization will be accelerated.
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Loss compensations for the maximum period of 10 years.
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The charge of Income Tax (PPH) on the benefits should be paid (Article 26).
No Added Value Tax and/or Income Tax, Import Duty (Presidential Decree No. 37 Year 1998, Ministerial Decree of the Financial Minister No.252 IKMK.04 1998, 29 April 1998) regarding The Production Activities and the Submission of Taxable Goods (BKP) of raw material or changing.
Inter-Institutional Coordination Aspect
In the aspect of coordination, some people consider that the presence of synergy and coordination among departments at the central government is needed to produce solid and strategic inter-departmental policies especially policies for the development of national strategic commodities that will compete in the international market. So far, some policies that are issued by central government are considered still counterproductive to one another. For example, policy on the development of industrial sector from the Ministry of Industry has not create a well synergy with policy on The Increase of Export drafted by Ministry of Trade and the Financial Ministry’s policy that accelerates state income including with the enforcement of Value Added Tax on primary products that will be consumed within Indonesia. At the provincial level, there are a lot of investors who so far are expecting that government agencies to be more coordinated between one another in helping to handle difficult problems that are faced by investors such as the difficulty in obtaining free-conflict land for investment development, labor conflict, land conflict, taxes, etc. In reality, inter-institutional coordination in the province can be done that are led by the Governor such as that that has been undertaken by Regional Government of Gorontalo Province.
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5.3
Land Affairs and Land Aspects
For most of people, the Eastern Regions of Indonesia are considered to have large stock of land for investment. However, in fact, land for investment in the primary sector, particularly farming and fishery is hard to obtain. This also happened in Gorontalo, although the population density has categorized low but for land affairs still become one of the Investment constrain. Some of land affairs in Gorontalo are as follow: •
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5.4 5.4.1
Limited availability of large area of flat land (
