Hong Kong-based Rainmaker Ventures and Shenzhen-based LINKTA Technologies have partnered with an Indonesian state-owned enterprise (SOE) on a smart poultry farm project that will support the growth of Indonesia’s new capital city region.
Rainmaker Ventures, the project owner, is committed to impact investing with a focus on emerging cities, while LINKTA, which specialises in IoT tech, has been hired as a design consultant and technical partner.
The SOE, Perumda Varia Niaga Samarinda (Perumda), is a regional public company operating in a variety of areas, from agriculture to mining and shipbuilding, run by the Samarinda city government. Samarinda is the capital of East Kalimantan province, the home of Indonesia’s new capital Nusantara.
The three parties signed an MoU at last year’s Belt and Road Summit outlining their investment and technical development plans, with the aim of achieving sustainable egg production in Indonesia. The Summit is a major deal-making forum bringing together key Belt and Road players that is organised by the Hong Kong Trade Development Council (HKTDC) every September.
After the MoU, the three parties signed an exclusive procurement contract in October for the proposed farm to supply Perumda – which already distributes its own branded eggs in East Kalimantan – with another 800,000 to 1 million eggs every day over the next five years. The contract is worth US$30 million.
Having secured a production commitment, the next step is getting the farm up and running. This could involve taking over an existing farm and scaling it up or building a new facility from the ground up through advanced IoT technologies and capital deployment, while potentially bringing new partners on board.
Rainmaker Ventures is preparing a few options and plans to meet with some more interested co-investors as well as some rural banks in Indonesia to finalise a deal structure this quarter.
“The chicken farm project is progressing steadily and carefully,” said Andre Kwok, a Director and Co-Founder at Rainmaker Ventures. “We are bullish on food supply and sustainability with technology in Indonesia and Southeast Asia in general.”
Feeding a growing population
Chickens are a major source of protein in Indonesia. Agricultural development and modernisation will help nourish East Kalimantan’s growing population, as more people, especially young families, migrate to the new capital city region.
At the same time, most poultry farms in Indonesia are labour-intensive and less efficient than semi-automated farms in China, Malaysia and Thailand.
The largest chicken farms in China can produce between 1 million and 2.5 million eggs each day.
Eggs from higher-tech farms also tend to be more nutritious, with a higher concentration of protein as well as other minerals, thanks to better feed and health controls.
Last September, at an event at China’s embassy in Jakarta, Indonesia’s Deputy Minister of Agriculture Sudaryono highlighted the benefits of learning from and cooperating with China to boost Indonesia’s domestic food supply, as the Southeast Asian nation deals with climate change and a limited supply of arable land.
To help with its planned farm in Indonesia, Rainmaker has also been receiving advice on management processes and tech deployment, among other areas, from one of China’s biggest food companies, Guangdong-based Wens Foodstuff Group.
“Chicken egg farms producing more than half million eggs daily require advanced sensors and data management as well as experienced management and the latest vaccines,” Mr Kwok stated.
The HKTDC, meanwhile, continues to support this venture, especially in scouting out potential partners and suppliers in animal health and technology.
The Hong Kong trade body has a long history of promoting business and investment opportunities in Indonesia’s new capital region, with the first project pitching sessions taking place at the Belt and Road Summit in 2019.
Former president Joko Widodo, popularly known as Jokowi, who first initiated the capital relocation project, was a keynote speaker at the 2020 Belt and Road Summit.
Indonesian government representatives as well as senior business leaders from Hong Kong, Mainland China and Indonesia, among others, have also attended HKTDC-convened dedicated roundtables on Indonesia’s capital city relocation.
Indonesian national government offices have already started relocating to Nusantara, which was officially inaugurated in August last year. President Prabowo Subianto is planning to move his office there in 2028.
