Innovation

“The Desa Rempah Project is a sustainability program of Sido Muncul company to empower rural farmers and villagers near the Sido Muncul factory in Semarang in order to encourage the cultivation of various types of herbal plants. The harvest of these plants, later become raw material for Sido Muncul herbal products. This program is a challenge to utilize the vacant or unproductive land to plant herbal raw materials, so it has economic value.” Ms. Maria – Public Relation Department of Sido Muncul

Established in 1951, Sido Muncul is a fully-modernized herbal company continuously striving to bring excellent products to the market to promote health and well-being, and, therefore, to create positive value for society.

The needs of Sido Muncul for raw herbal material are large. In a day, production requires about 60 tons. Originally, all the materials were obtained from suppliers around the country. But, since 2009, rural farmers near the factory have supplied 20 percent of the herbal raw material needs through a form of cooperation called the Petani Binaan (Guided Farmer) Project.

Unlike the Petani Binaan Project, however, the Desa Rempah Project, which began in 2014, is the pilot for a more collaborative approach between Sido Muncul and rural farmers and villagers. In this project, Sido Muncul gives plant seeds to the rural farmers and villagers. Sido Muncul also assists the farmers in the planting, maintenance, harvesting, marketing and post-harvest activities. Then, the farmers’ harvest is purchased by Sido Muncul at fair market price. Therefore, the farmers do not have difficulty selling their harvest.

In addition to raw materials, Sido Muncul also trains the villagers in the making of organic fertilizers, in sewing and in making bags and souvenirs from the unused Sido Muncul product packs. All of those products are then purchased by Sido Muncul and sold directly in their shops.

Inspiration

“Mother Theresa's words have a big impact on me; that people should be beneficial to society and the environment. That is the life philosophy that permeates in my heart.” Mr. Irwan Hidayat – President Director of Sido Muncul The above quote was taken from an interview between Mr. Andy F. Noya and Mr. Irwan Hidayat on the TV show Kick Andy. As the President Director of Sido Muncul, Mr. Irwan Hidayat is one of the key figures in driving progress and developments in the company. Most of the idea for this project came from him. Mr. Hidayat usually helps society through charitable activities. But, sometimes, instead of giving the ‘fish’, he will give the ‘bait and hook’ and teach the correct way of ‘fishing’ so that people become independent in producing a value.

Overall impact

“The launching of Desa Rempah Project hopefully can maximize the fertile land to become more productive, could further reduce the chain of the production process of herbal raw materials and to help improve the economic welfare of the society around the factory, so that society and businesses are mutually beneficial in synergies.” Ms. Maria – Public Relation Department of Sido Muncul

This project helps to improve the economic welfare of the society around the factory. The rural farmers have dependable income from access to a consistent market. And, Sido Muncul has the opportunity to control for quality by being involved at every step of the process.

At least 30 percent of the participants in this collaborative program have a primary job and grow the herbs on their land or yard for supplemental income. Sido Muncul believes that community interest to plant the herbs will continue to rise over time and will increase the overall economic welfare of the community.

Business benefit

By establishing Desa Rempah (Spices Village) the company Sido Muncul has secured a supply of the herbs needed to make their products. Teaching the farmers to cultivate specific herbs fit to their soil conditions increases yield and quality. Growing their herbs in villages close to their production facilities shortens the supply chain and significantly reduces transportation costs and pollution.

Sido Muncul has become a major herbal company with more than 4,000 employees. It was not a short time and not without big struggles to get where they are now but with the motivating slogan, “dedication with heart for the country, move forward together to meet the future, make a healthy nation”, they have survived and flourished. Sido Muncul turned the need for additional raw herb plants into a positive economic program for the local economy.

Social and environmental benefit

Farmers and villagers that participate in the Desa Rempah Project have a more consistent and dependable source of income. They are able to use unproductive land to grow herb crops designed specifically for their soil conditions. This increases farmer’s income using land they already own. The are also helping to preserve traditional Indonesia medicinal herbs.

Interview

Christophe Campéri-Ginestet, Not available