Country Profiles

The processing sector

In 2002, less than 10 plants slaughtered more than 100 head per day, and only 35 slaughtered 50-100 head (Hadi, 2002). In 2009, Indonesia had about 693 certified slaughterhouses that slaughtered a recorded 935,700 cattle, which would mean an average of 1,350 head per year, or 3.7 head per day. About 50% of the plants were located in Java. About 12 of the larger municipal abattoirs were built in the late 1990s when the government, with support from Japanese aid, built service slaughter plants throughout Indonesia. In recent years, government at central down to municipal levels has increased investment in abattoirs, both in refurbishment and new plants.

The bulk of the sector consists of service kill slaughterhouses, where local government (or state-owned companies) provide slaughter facilities and inspection services, and where butchers conduct slaughter and retain ownership of product (cattle, beef, by-products). In large service slaughterhouses there can be 100 butchers registered to use the plant, but there may only be one or two in small regional slaughter points. Butchers run “crews” of workers (four to five people) and have very little equipment or overhead costs of their own (‘a knife’). Butchers have high levels of integration in up- and down-stream sectors of the cattle and beef industry. They are major cattle buyers both inside and outside of cattle market places, which is a major aspect of the operations of butchers, to the point that they are often known as (beef and cattle) traders. They are closely integrated into the beef retailing sector through networks with stallholders in wet markets.

There has historically been a limited number of abattoirs in Indonesia purchase cattle outright for slaughter and then market their own beef (Santori, Elders). However, there appears to have been an increase in investment in abattoirs that take ownership in product, certainly throughout Eastern Indonesia. Importantly, this provides incentives and opportunity for more direct marketing relationships with producers. However, the viability of the plants – and therefore the marketing arrangements – depend on numerous factors, including management, markets, access to cattle supplies. Most fundamentally, modern plants with higher cost structures are not cost-competitive with butchers in generic markets.

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