Highlights

1. US$6 billion in Indonesian seafood exports per annum
2. 3000 metric tons in cold storage inventory managed through FishLog’s network of >50 technology-enabled FishLog Quality Centers
3. US$3 million in financing channeled from partners to fishermen and fisheries businesses in FishLog’s ecosystem
4. 20,000 metric tons in inventory managed on FishLog’s real-time B2B marketplace to improve industry standardization
5. 230 people trained through FishLog Academy
   

1. US$6 billion

Indonesian seafood exports per annum

There are two ways to look at the potential of Indonesia’s fisheries industry. There’s the broad industry production itself generating US$14B or around 3% of the country’s GDP. Then there’s more than half of that going into the industry’s annual seafood exports which amount to US$6B (top three countries are the US (40% mostly processed), China (15% mostly raw), and Japan (12%)), and has proven to be resilient amidst recent headwinds. Both dimensions have long been plagued by the lack of industry standards, price differences, capital gaps, and inefficient logistics.

Having experienced these pain points firsthand building a fisheries business, Bayu Anggara, Abdul Halim, and Reza Fahlepi decided to instead focus on building a platform to improve the productivity of fisheries’ middle chain / cold chain distribution in Indonesia. Enter FishLog.

Bayu breaks down the export potential of Indonesia on our podcast. “Fisheries is a global supply chain, right? Even from the Indonesian perspective, mostly it is about exporting to other countries. So it is a global marketplace, a global value chain, and global transactions…

Indonesia exports around US$6 billion dollars in seafood per annum. And then from this 6 billion, 40% is going to the US. So America is [a] major market for us, and it is value-added (processed). It’s not raw material. If we talk about other countries, like China, 15% is going to China, but it’s mostly still raw material. If it’s raw material, it can be affected by the global economy because it needs to be processed there. And then the third one is going to Japan. It’s [around] 12% going to Japan. So all of these three major countries contribute a lot to our market share. But all of them are very strong in terms of consumption. I see that in the future we’ll be growing [these exports].”

2. >3000 metric tons

inventory managed on FishLog’s real-time B2B marketplace to improve industry standardization

The pain points (and therefore opportunities) being tackled by FishLog can be divided into three areas, almost parallel to the famous visual of Jack Ma of the Iron Triangle (the three points covering marketplace, payments, logistics to make an ecosystem).

The first point in FishLog’s Iron Triangle or Fish Triangle is the asymmetric information and visibility in the industry which has resulted in the lack of standardization in fish prices and quality. FishLog is working towards solving this problem by providing a real-time marketplace where fisheries businesses can see inventory in a standardized manner (the standardization comes from the government, or where there is none pre-existing, FishLog’s platform itself). The platform captures inventory movement in real-time so that they can adjust the standard, at least from the price and quality standard.

Apart from their online marketplace, FishLog is driving this quality standardization further by helping fishermen achieve sustainability certifications, such as DolphinSafe, which proves that fishermen have not caught dolphins while catching tuna, as well as improving the quality of their operations as well, like helping them with bookkeeping.

3. US$3 million

financing channeled from partners to fishermen and fisheries businesses in FishLog’s ecosystem

The second area in the Fish Triangle is the lack of capital supply. This is essential due to the need for immediate payment to fishermen upon delivery to distributors. Instead of relying on their own capital and balance sheet, which could be financially burdensome, FishLog adopted an off-balance sheet model. They established partnerships with fintechs to facilitate capital flow, a system that instills trust and enables efficient cash disbursement in their industry, ensuring prompt payment for fishermen.

FishLog has become the pioneer in inventory financing for fish, a model previously untouched and distrusted by banks. However, their recent acquisition of a government-recognized fiduciary certification has increased confidence among FinTechs and banks in FishLog’s ability to manage inventory, including ensuring its quality.

FishLog’s approach aims to unlock the potential of financing platforms within the fisheries community. Despite the fisheries industry contributing 3% to Indonesia’s GDP, financing from macro, micro, and SME sources for the industry only accounts for around 0.2%. This discrepancy stems from the seasonal nature of the industry and inconsistent bookkeeping. By challenging this status quo, FishLog aspires to transform the fisheries industry into an enticing investment proposition, ensured through their meticulous operational management.

4. >20,000 metric tons

cold storage inventory managed through FishLog’s network of >50 technology-enabled FishLog Quality Centers

The third area is logistics. And this is at the heart of FishLog’s business model — as it serves as the foundation for FishLog to be able to capture inventory that then provides data to power standardization, but also enough activity to bring in financing partners and build trust with financial institutions.

At the end of the day FishLog has positioned itself uniquely in the industry amidst established and emerging fisheries players by focusing on optimizing the utility of the middle chain, particularly the cold chain distribution, to improve efficiency and stabilize supply and demand as an end-to-end player. Core to this are their FishLog Quality Centers, involving partnerships with local cold storage and aggregator partners, which allows them to avoid asset investments.

The company understands that maintaining a balance of inventory and capital is essential, especially when logistics require temporary storage of produce before delivery. Building their own cold storage would be a substantial investment, which they aim to avoid. Instead, they extend a valuable proposition to existing cold storage processors, utilizing their infrastructure to store their fish stock units, leading to the establishment of the FishLog Quality Center.

FishLog identified and now through their network and existing services previously discussed addressing three primary challenges for their partners. First there’s cash flow constraints due to the necessity of immediate payment to fishermen while receiving payments only after delivery or post-processing. Second is the supply problem resulting from limited resources. To address this, FishLog offers alternatives from their 45-50 locations across Indonesia, ensuring nationwide quality control. Finally, partners aiming for growth require access to more buyers and markets. Therefore, FishLog strives to unlock global demand and assist their partners in scaling their businesses locally.

5. >230

people trained through FishLog Academy

FishLog understands that creating a robust system with standardized naming, pricing, and quality levels is pointless if the operators do not adhere to these standards. This understanding resulted in the establishment of their educational program, FishLog Academy. As they aspire to evolve into a global operation (i.e., exports) and scale further this year, they acknowledge the necessity of standardized training across their workforce.

FishLog Academy is not just an ornamental institution, it exists to address a pressing need: standardizing quality, price, and stock affordability assessments among their 230 personnel across Indonesia, made possible by more than 50 quality control centers throughout the country.

FishLog’s training program is divided into two primary focuses. Firstly, it concentrates on quality control, where personnel are trained to evaluate if a product is of poor, good, or excellent quality using predefined frameworks. Secondly, it focuses on operations management, particularly the administration of warehouses or cold storage facilities. When new partnerships are established for FishLog Quality Centers, personnel from FishLog’s head office are dispatched to standardize all operations in the new location.

While these roles are distinct, their key performance indicators, including inbound and outbound inventory management and stock opdev, align with FishLog’s service level agreements. Currently, FishLog’s primary focus lies in these two areas.

Beyond the numbers

While the industry is relatively nascent, there is a lot of untapped potential not just to improve Indonesia’s fisheries distribution globally, but also change perceptions on the sustainability of the industry — creating livelihoods, increasing incomes, and redefining what it means to fish in Indonesia.

As Bayu emphasizes on our podcast, “There are a lot of people saying that our industry is not sustainable. So they see that fisheries is not sustainable. We want to fight that [perception]. We want to prove that fisheries is sustainable and impactful…So we want to prove [it can be done]. And then along the way, hopefully we can educate the stakeholders. We can educate the global community that the Fishlog model…can provide a very sustainable way to deliver fish from fishermen and B2B buyers.”