PT INHIL SARIMAS KELAPA

From Coco to Community

1869 5F72

Authors

Nency Ismail

Nency Ismail

Dewi Rahmawati

Dewi Rahmawati

Teguh Pramesti

Teguh Pramesti

Ariya Pramudiatama

Ariya Pramudiatama

School

IPMI International Business School

IPMI International Business School

Professor

Amelia Naim Indrajaya

Amelia Naim Indrajaya

Global Goals

1. No Poverty 7. Affordable and Clean Energy 8. Decent Work and Economic Growth 11. Sustainable Cities and Communities 12. Responsible Consumption and Production

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Summary

PT Inhil Sarimas Kelapa (ISK) is an Integrated Coconut Processing Plant that produces products used for raw material in food manufacturing, pharmaceutical, and other industrial products. ISK has put a large focus on zero waste manufacturing process that bring benefits not only to the company's profit, but also provides economic value to the surrounding community.

Innovation

In any day, PT ISK process about 850,000 coconut fruit to produce over 300 tons of coconut milk/ water per day. PT ISK produces tons of coconut fiber waste in a day from that process. Processing the waste becomes burdensome.

PT ISK took the initiative to process such waste to add value back to the business.

The coconut fiber waste is processed through a drying process that turns it into a product called “desiccated coconut.” The new product is used as food raw material and it is exported to the Malaysia and China market.

The other innovation from focusing the production process to have less waste is that PT ISK is able to process the coconut shell into charcoal briquettes and generate additional revenue.

In Indonesia, overall our country is facing problem from power supply deficiency especially in the remote areas. PT ISK is located at village called Tembilahan is Riau Island, and there's no sufficient power supply in the island from PLN, State Owned Power Supplier.

Again through the innovation, PT ISK has managed to meet their power supply need by generating steam from processing waste coconut shell. PT ISK has invested in turbine engines in order to process that power. This brings cost savings in terms of less consumption in diesel if PT ISK had decided to use diesel generated power. Furthermore, PT ISK directly participates in reducing the use of non-renewable energy.

PT ISK as we speak is working on the project to generate biogas for more power supply by reprocessing the waste generated from initial process of waste coconut fiber.

The existing power supply generated from waste coconut shell has 20 megawatt capacity. However actual power supply can only reach 17 megawatt at maximum.

This new project that PT ISK has embarked on will add 5 megawatt capacity for the power supply. In fact they have plans to supply to PLN, state owned power supplier, so that PLN is able to supply power to all Tembilahan area.

The noble thing out of all innovations which PT ISK has implemented is helping the community by creating more employment.

The surrounding population has more certainty in getting a monthly regular income by working at PT ISK, and not only relying on income from coconut harvesting time.

From Coco to Community

Inspiration

Tembilahan is the small village which has a limited electricity supply, especially from the government. Even with limited resources they still can produce coconut shell as their fuel to produce water, gas, and transfer it into electricity for the factory and local communities.

The factory employees hired by the company are provided with adequate housing. The employee can now have a decent living, including a place for their children to study. This is an area where people bathe and wash in the river.

PT ISK has done remarkable work with very limited resources. PT ISK does not have its own coconut tree plantation. But they have generated a lot of benefit by working together with the community.

Overall impact

PT Inhil Sarimas Kelapa chose to adopt zero waste in its manufacturing process. It practically uses all elements of the coconut fruit that can be processed into something more valuable.

The coconut shell can be reprocessed into bio-briquette (or coconut shell charcoal) which is a replacement for fossil fuel. The briquettes from reprocessing coconut shells turn into steam to generate power with 20 megawatt capacity for the factory needs.

Tons of waste coconut fiber are also reformed into something valuable such as raw material for food, filling for a mattress, or a fancy car seat (such as Mercedes). The company can even expand its market opportunity by exporting these products to other countries such as Malaysia and China.

Based on information gathered, the company can generate additional 10 – 20% revenue from the sale of reprocessed coconut waste. The company has also made significant cost savings by generating its own cleaner energy, instead of using diesel power.

Besides that, the company's existence has been valuable to the surrounding community. A total of 4,000 people are employed by PT ISK, both as permanent and also outsourced employees. Before PT ISK was established at Tembilahan, people relied mostly on coconut farming as their main job. The challenge for these farmers was finding regular buyers in their rural area.

PT ISK has adopted key principles of CSR while working closely with the surrounding community. PT ISK does not have land to plant the coconut trees. So PT ISK collaborates with the local coconut farmers as "consumers" for the farmers coconut harvest. PT ISK optimizes the value chain by giving the farmers' assurances they will buy their coconut harvest at the applicable fair market price.

PT ISK has completed 100 units of permanent housing out of 1,000 target units and will launch this initiative in January 2016. The company mission is to provide affordable housing to PT ISK employees and allow employees to pay 1% deposit for the house, with the remaining balance to be paid in installments over 20 years with low interest rates.

The most common housing in the area is wooden non-permanent housing located at the river bank. It is common for people to design their current housing whereby they have a washing and bathing area located at the front area of their house on the river. By having this housing project, the company's mission is to improve the health and cleanliness of its employees by lifting them out of poverty and upgrading their lifestyles. PT ISK builds permanent houses with better designs to promote a healthier lifestyle.

PT ISK has done an excellent job placing heavy focus on CSR principles. It protects the planet by continuously focusing on zero waste impact and contributing positively to its community. PT ISK also gains the goodwill of the community and profits as a company by being a good employer.

Business benefit

The company minimizes its cost and secures a more eco-friendly power supply by producing its own electricity. The waste product from coconut processing and manufacturing generates additional revenue and income to the company, rather than disposing of it as waste.

Social and environmental benefit

Societal: The company creates job opportunities and stability for the community surrounding the plant. It also increases the quality of life in terms of housing, education, and income for the workers.

Environmental Benefit: Zero waste in the manufacturing process, while producing bio-fuel to supply its own demand.

Interview

Setiawan, General Manager

Photo of interviewee

Business information

PT INHIL SARIMAS KELAPA

PT INHIL SARIMAS KELAPA

Tembilahan, ID
Business Website: http://www.cocomas.com.sg
Year Founded: 2001
Number of Employees: 1001 to 5000
PT Inhil Sarimas Kelapa (ISK) is an Integrated Coconut Processing Plant that produces coconut byproducts used for raw materials in food manufacturing, pharmaceuticals, and industrial products like fillers in cushions. It also takes coconut waste and transforms it into bio-fuel that is used to run the factory, as well as providing an energy source to the rural community.