TaniHub Will Build Agricultural Product Distribution Center Outside Java
A startup in the agricultural sector, TaniHub plans to expand the market in Indonesia. This startup will also build infrastructure, such as distribution centers outside Java. Currently, TaniHub has five distribution centers in Jakarta, Bogor, Bandung, Yogyakarta, and Surabaya.
The company plans to build new agricultural infrastructure outside Java in the next two years. “We want to open, not only focus on Java and Bali. But touch Sumatra, Kalimantan, and Sulawesi,” said TaniHub Co-Founder and CEO Ivan Arie Setiawan during a virtual press conference, Monday (24/8).
This is aimed at equitable distribution of agricultural products in the country. This step will make the commodity supply chain more efficient so that prices can be controlled. “If the distribution is evenly distributed outside Java, farmers can control prices,” said Ivan.
Apart from the distribution center, TaniHub also has a product processing and packaging center which was launched this year in Malang. This facility serves to save time for the distribution of agricultural products.
“Can cut processing time to two days,” said Director of Supply Chain TaniHub Group Sariyo. The two infrastructures allow TaniHub to meet import standards for agricultural products. The company is trying to build this infrastructure outside Java.
The Expansion Plan is Supported by the Funding that has been Obtained
The plan is supported by series A funding of US$ 17 million or around IDR 283 billion, which was obtained by TaniHub Group last April. This investment was led by Openspace Ventures and Intudo Ventures.
In addition, involving other investors such as UOB Venture Management, Vertex Ventures, BRI Ventures, Tenaya Capital, and Golden Gate Ventures. With this fresh fund, the total equity raised by the TaniHub Group has reached US$ 29 million or around IDR 481 billion since 2016.
The acquisition of fresh funds is also in line with soaring sales of vegetables, fruit, and other agricultural products during the corona pandemic. Transactions for herbal plant products also increased by 20%. The number of users also increased by 20 thousand people.
Overall, transactions on TaniHub are growing threefold every year. Now, there are more than 30 thousand small farmers who have joined the TaniHub ecosystem. “There has been a change in behavior, previously offline purchases became more online. But overall, with the Covid-19 pandemic conditions, the TaniHub business is growing rapidly,” said Ivan.
There are still many Problems Faced by Farmers in Indonesia
President and Co-Founder of the TaniHub Group, Pamitra Wineka, revealed the many problems faced by farmers in Indonesia. In fact, farmers have a strategic role in maintaining domestic food availability that is needed by all people.
Pamitra said, before establishing TaniHub, his party saw the financial sector growing rapidly for various business activities except for agriculture. This is because banks do not like the high risk of providing loans to farmers.
The high risk, said Pamitra, is because the debt repayment process is not smooth. This is because farmers find it difficult to access the market in selling their products that are produced from bank loan capital.
He said that was what made farmers in Indonesia mostly categorized as poor because of the large debt they had to bear. Meanwhile, the land area owned is very small. Even though they own a large area of land, only a small portion is used due to limited capital and difficult access to marketing.
“Then, the price becomes expensive and uncompetitive. Farmers do not know where the market is, so farmers are a noble profession but tend to be forgotten,” said Pamitra. He said, in the past four years, TaniHub has continued to strengthen the business ecosystem from upstream to downstream that helps farmers market their products.
So far, he said, the TaniHub Group has three subsidiaries, namely TaniHub, Tani Fund, and Tani Suplai. All three are made to mutually support supply chain operations from farmers to consumers.