Remarks of President of the Republic of Indonesia during Inspection of the Cooperative of Al-Ittifaq Islamic Boarding School, Bandung Regency, West Java Province, March 6, 2023

By Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation     Date 6 Maret 2023
Category: Remarks @en
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Bismillahirrahmanirrahim.
Assalamu’alaikum warahmatullahi wabarakatuh.
Distinguished Kiai (Islamic teacher);
Ladies and Gentlemen who I cannot mention one by one. The farmers.

This morning, I was truly amazed when I first entered Al-Ittifaq. I was surprised that there is an Islamic boarding school that applies good management in its agricultural business, which starts from the market demand instead of the production. And then, the production is carried out around the boarding school. For the management, they really know how to plan it so they always meet the market demand.

As the Minister said, the commodities are abundant during the harvest season but the price falls. However at some point, people complain about price hikes due to commodity scarcity. This happens repeatedly.

Once again, the planning of business model applied by Al-Ittifaq Boarding School is incredible that we can take it as an example and a role model. The business model is worth imitating. It produces good commodities with different markets. The markets can be hypermarket, supermarket, traditional market, or superindo. What else? Oh, Jogja and AEON. There are actually a lot of markets, but we have not expanded the production capacity yet.

If you know LuLu, it is a United Arab Emirates-based hypermarket. Every country must have a LuLu hypermarket. The last time I checked, they had LuLu in 180 different locations, now it may reach more than 200 locations. We used to send melons and mangoes from Solo, but we stopped. We could not do that regularly. We only could send the commodities at a certain time. Well, it does not work that way in a business.

Speaking of which, I saw it myself that green chillies, oranges, strawberries, melons, figs, carrots, and others are well-managed with good planning. We have lost such a business model for decades. We have no idea how to manage a business. Now, there is an example of it. People can just imitate it 100 percent. Islamic Boarding Schools in Solo Raya, Riau, East Java, and Lampung can imitate the business model with Al-Ittifaq as the holding company. Once the business has developed enough to send commodities to LuLu  or other hypermarkets, you can turn it into an independent business.

Starting a holding is necessary when running a business and I have been there. It almost took me seven years for running a holding because the company was not able to export products yet back then in Jakarta. I learned the business for seven years and I was like, “Oh it worked this way, it worked that way,” I kept learning. Where is the market? Well, to Europe, to the United States. In the eighth year, I could go there by myself. Since I have been practicing the business for seven years long, I understand how to make production plan so I could export it to Europe and the United States. The same goes for this. As the Head of Al-Ittifaq said earlier, he is open to collaboration since the boarding school production is inadequate to fulfill the current market demand.

Well, there are also some problems, for example greenhouse, sheeps, and fertilizer. Those were technical difficulties on the ground that may occur in any businesses. In this regard, I urge Bank Indonesia to help solve these difficulties. Likewise, President Director of PT Medco Mr. Hilmi, and Minister of SMEs please help the financing problems so we can develop the same business models we saw previously.

It is not about the money. Sometimes it is not the capital issues but business management issues. No matter how big the amount of money loaned from any bank, the business will collapse within a year or two if it is poorly managed. This business model has it all. The method of selecting the vegetables, the method of selecting the fruits during QC; the quality control is well performed. Then, the packaging is great with a good brand. Thus, other Islamic schools can imitate this one. Go imitate it. Do not bother thinking twice, just imitate it 100 percent.

Those who want to collaborate can contact Al-Ittifaq Head, “Sir, I’d like to be a member of your holding.” That would be fine if within seven years you still could not run a separate entity by yourself. People have their own fortunes. Allah has given us that. Thus, if you still could not do that within 20 years or 30 years, that was okay, just keep going. But there must be someone who can run an independent business and own a business like this boarding school within one, two, three, four, or five years.

Regarding fertilizer. The farmers should know that there is a shortage of fertilizer that occur in all countries since the Russia and Ukraine war impacts the supply of raw materials [for fertilizer]. Hence, it is affecting the world’s supply of fertilizer. If the fertilizer is in short supply, then the price will definitely rise. Yesterday, we just inaugurated a factory of PT Pupuk Iskandar Muda producing urea and 500 thousand tons of NPK (nitrogen, phosphorus, and potassium) fertilizer. However, that is not adequate yet, far from adequate.

I deem it necessary to reopen a fertilizer industry in West Papua since the region produces natural gas. The region has raw materials. However, we have calculated the supply, it is still not adequate yet. It is still imported. We still need to import a lot of raw materials. Those are disruptions in fertilizer supply that the farmers always asked about during my visit. And it is true, fertilizer is not an easy thing to look for now.

That is all from me. I expect good development/progress in our next meeting. Please arrange the next meeting, Mr. Teten. I will invite them to the Palace six months from now. There will be progress comparing to our meeting today, Inshallah.

I conclude my remarks.
Thank you.
Wassalamu’alaikum warahmatullahi wabarakatuh.

(RIF/MMB)

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