The shape of the world a generation from now will be influenced far more by how we communicate the values of our society to others than by military or diplomatic superiority. William Fulbright, 1964

Friday, January 19, 2007



Foreigners often face difficulties starting a business in Indonesia. But the faults aren’t all with this country. Duncan Graham reports:

Last May bureaucrats and potential investors of East Java were expecting to get the first local lab figures of an important analysis: Would the results show that chicken food made from Surabaya’s waste would be nutritious and palatable to poultry?

Probably. Hens will eat anything – even each other. But this project – which needs a US $25 million (Rp 20 billion) investment - had to convince people.

“There’s a lot of sceptics in the government particularly in animal husbandry, but I’m pretty optimistic,” said Surabayan businessman Ron Kho. “Once this gets up and running everyone will want to be involved.”

His partner Sam Salpietro from Western Australia, whose company BioCulture is pushing the idea to convert foul refuse into fowl food, was equally upbeat:

“This is the only project that can be considered a viable and commercial operation,” he said. “There’s no need for subsidies or government funding.”

But then the idea hit the speed bumps. Dissatisfied with local lab procedures the partners decided to get another opinion of their product – in Australia.

Sending anything organic into the country next door is difficult enough. When the material is processed trash the problems compound.

“No-one has ever wanted to import rubbish into Australia before,” said Salpietro. “We were told it would be easy – but the bureaucratic problems were incredible.”

Nonetheless they’ve been overcome and six months later the partners have their analysis from the Western Australian government’s chemical laboratory – which they’ll be presenting to potential investors in Surabaya today (21 Dec).

The figures certainly look good - like most projections before a factory is built. Every day the folk of Indonesia’s second biggest city produce 3,000 tonnes of rubbish destined for the tip.

The overall quantity is much higher, but efficient scavengers pull tonnes of plastic, glass, wood and other recyclables out of the refuse long before it gets to the landfill.

Now imagine a low-tech process where about half that waste could be converted into chicken pellets that could be sold at a profit. The garbage pits would then last twice as long in a land where space is needed for the living, not their waste.

‘Where there’s muck, there’s money,’ has long been a truism as many millionaires know. If a job is unpleasant people prefer to have someone else get their hands dirty.

In the West those hands are mightily expensive so the costs of processing waste into anything useful is prohibitive. But not in Indonesia.

“There’s no doubt this project can only work in developing countries where labour is cheap,” Kho said. “Most of the work is manual. It requires teams of people sorting through refuse on a moving table and rejecting everything inorganic.

“The foods and plants which do get through will be cooked and processed to remove impurities. Extra nutrients will be added and the mix forced through an extruder to make pellets.”

So far Kho has processed 300 kilograms using manual gear assembled in his paint pigment factory, PT Holland Colours Asia. The extrusion process is much the same so there’s a fit with his present plant. However heating and other controls will need to be adapted.

“We reckon we can make high quality poultry feed for about US $ 75 (Rp 700,000) a tonne when other manufacturers are charging US $250 (Rp 2.25 million) a tonne,” he said.

“So there’s a lot of space to play. We hope existing animal feed companies will want to invest.”

OK so far. Now consider the difficulties: Manufacturers of any product want their raw materials to be of a consistent quality, easily measured. But no two truckloads of rubbish will ever be the same.

And how will the BioCulture managers ensure that every noxious object is spotted and doesn’t make it into the organic waste? Watching rubbish roll by hour upon hour is not a fun pastime, even if the bosses are paying top rupiah for nimble fingers and sharp eyes as they promise to do.

When Mum tosses out her supply of birth control pills because it’s time to start a family and the drugs get into the chicken food, there could be some curious results. Contraceptive hormones in Australian sewage discharged into the sea are already reported to be doing funny things to fish.

Then there’s the danger of transmitting Frankenstein ailments like Mad Cow disease if certain animal products get into the feed. Dead rats seem to be a significant component of Surabaya’s rubbish.

Kho stressed that these and other hazards had been considered. The organic waste would be pasteurised to kill any toxins. Continuous laboratory tests would pick any unforeseens and reject suspect feed.

Magnets would pull out anything metallic and closed circuit TV would monitor every stage. The sorters would work in teams each focussing on only one type of waste. “The end product has to be food quality,” said Salpietro.

The other hurdle is the lack of an up-and-running plant. Potential investors might be more enthusiastic if they could actually see a real banging, clanking, steaming operation rather than a Power Point presentation.

Salpietro acknowledged the problem: “Someone has to be a pioneer. We don’t have the money, but would be prepared to be shareholders. We’ve already spent about AUD $1 million (Rp 7,000 million) and five years to get this far.

“People from all over the world keep coming to Indonesia and saying: ‘We can solve your waste problems.’ They can – but someone has to pay. This system generates income.”

“We expected a 30 per cent organic recovery but in fact the pilot yielded 50 per cent,” Kho said.

“We reckon it will cost about US $20 - $25 million to build a viable plant on about five hectares, and take around 18 months to construct. Capital return should be rapid.

“We’d prefer a joint venture with the government to ensure continuous supplies of waste – maybe around 20 per cent of the capital.

“I don’t normally like dealing with governments but with this project there have been no bribes asked or given.”

(First published in The Jakarta Post January ? 2007)


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