1. Chile Report: Salmon Farming
At the beginning of 2019, we took the opportunity to visit salmon farming operations in the Chilean summer.
The West knows Indonesia primarily as a cheap but distant holiday destination with beautiful beaches. However, this fails to do justice to the Islamist-influenced giant in Southeast Asia. There is an abundance of natural and human capital available, ideal for the expansion of aquaculture. It was therefore high time that Bonafide made a visit.
Second longest coastline
Comprising over 17,000 islands, this country in Southeast Asia is a hidden giant with a true potential that far outstrips its current economic output. With a population estimated at 286 million in 2025 and encompassing a land area of 1.9 million square kilometres, this island nation has no reason to be modest.
In terms of land, Indonesia is more than five times the size of Germany, as well as being the fourth largest country in the world in terms of population, just behind China, India and the USA. However, its competitive advantage lies in the sheer length of its coastline. Stretching out over 99,083 kilometres, it is almost four times as long as Norway’s coast. Indonesia is just right for aquaculture enterprises in the southern hemisphere which rely on seawater.
Households live on their daily income
However, the Indonesian population as a whole is poor, and in some cases desperately poor. Eighty per cent of households spend less than 2 million Indonesian rupiah (IDR) per month, which corresponds to around 120 US dollars. There is a deep divide between the (capital) city and the countryside, both in terms of minimum wage and GDP per capita. On the island of Lombok, which is part of the West Nusa Tenggara region, the monthly minimum wage for 2024 was IDR 2.4 million, while in Jakarta it was more than double this at IDR 5.1 million.
GDP per capita in the Jakarta area is around USD 20,000, compared to an average of USD 4,000 in all other regions. Accordingly, there are also affluent consumers who are happy to pay Western prices for Nike sneakers and the like in shopping malls of staggering size. But the richest 1% of people in Indonesia still number fewer than 2.8 million.
Government stimulus measures
The government and economic experts agree that the impoverished population must be helped in order to strengthen the domestic market. This opens up opportunities in the food sector in particular. As purchasing power increases, demand for cheap animal proteins such as chicken or tilapia will rise. Pork has a hard time, as almost 90% of the population is Muslim. A stimulus package totalling USD 16 billion (1% of GDP), which includes a 6.5% increase in the minimum wage, is on its way.
In the past, governments have not shied away from adopting drastic measures to strengthen the local food supply. For example, the import of maize has been banned since 2017, which has led to increased domestic production. New elections were held last year and the newly formed government will soon announce its goals and strategy for the legislative period until 2029. There is a consensus that aquacultures should be promoted. The question is how extensive any state funding programmes will be launched.
Growth above the global average
The opportunities in Indonesia and the entire ASEAN region (580 million people) are immense. The region is forecast to achieve real economic growth of almost 5%, something the developed markets can only dream of. Human capital is favourable, so some global corporations are likely to diversify their production sites to Indonesia sooner or later.
Within the Fish & Seafood sector, we see opportunities for consolidation in high-priced, export-oriented species such as whiteleg shrimp, as well as for optimising farming methods through technological advancements. The expansion of aquaculture in the open sea, as we know it in Norway, Chile and Japan, is still in its infancy. Taking on this adventure will require pioneers and capital.
Animal welfare and the environment (still) taking a back seat
Having said this, we should not underestimate the risks. Companies have no choice but to train their workers in house or send them to feed suppliers, who then train them on their products. And Indonesia has not yet embraced sustainability in its approach to the environment. This is understandable given people’s daily struggle to survive on low incomes. However, we should not underestimate the risk posed by pollution, especially of bodies of water.
Last but not least, animal welfare standards are lower than in Europe. There is room for improvement, especially when it comes to the killing process (which should be quick and as stress-free as possible). This is precisely where the appeal lies for foreign investors, not only to earn money but also to create jobs and minimise the environmental impact.
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