Upgrading the technical know-how and marketing skills of Indonesian SMEs producing and processing patchouli essential oil with a view to promoting fair trade partnerships with EU companies producing natural fragrances and food flavourings

Detailed description of project:

Project addresses Asian Private Sector Development in the form of technical assistance to Asian enterprises with strong potential for partnership with European companies.

The overall objective of the project is to facilitate economic revival in the affected regions of North Sumatra by restoring, upgrading and developing new business opportunities in the private sector in agriculture with a potential to improve trade and investment flows between Indonesia and the EU

The project aims to increase the mutual benefits of Indonesian SMEs producing patchouli oil and EU companies producing natural fragrances and food flavourings through:

- upgraded quality and higher added value patchouli essential oil;
- increased access to international market for Indonesian SMEs;
- enlarged availability of the above produce with higher quality for the relevant EU companies.

The project specific objective is to upgrade the quality of patchouli essential oil, produced by SMEs in agricultural sector of North Sumatra and to enlarge market opportunities for this higher quality product thus allowing the increase of its availability for international, and particularly, EU companies producing natural fragrances and food flavourings.

This objective will be reached through the upgrading of technological know-how and marketing skills of SMEs producing patchouli essential oil in North Sumatra, which will lead to the higher added value product and, consequently, higher income of the producers. Higher quality oil will allow improved access to international and, particularly, European markets and participation of the Indonesian SMEs in fair trade partnership agreements. Simultaneously, a number of cross-cutting issues will be addressed by the specific objective of the project, including:

- Opportunities for forward-looking farmers to establish businesses in the production of patchouli essential oil with the objective of exporting;

- Improved linkages between SMEs and agricultural support services of the region, which will play an important role in ensuring further sustainable development of these businesses;

- improved opportunities for participation in trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade.(fair trade agreements).

Type of services provided:

IPP Consultants has provided three international consultants to carry out the following inputs:

1. Senior agri-business development advisor;
2. Expert in trade and marketing pf essential oils;
3. Socio-economist/fair trade sociologist.

The main tasks carried out include:

- Assessment of training needs based on actual situation in the field;
- Development of the training programme for patchouli oil producers of North Sumatra and Aceh provinces in agronomy, processing, marketing, institutional strengthening;
- Delivery of designed training in processing, marketing and fair trade opportunities;Matching activities with relevant EU companies;
- Development of sustainability and follow up plan for further enhancement of the achieved project results;
- Participation in international conference on essential oils in Jakarta (November 2007) with the presentation on fair trade opportunities in the sector;
- Design, preparation and dissemination of the project brochure.

Client: NRI, UK