Japfa is one of the Asia-Pacific region’s largest and longest-established agrifood players. Founded in Surabaya, Indonesia in 1971, the company rapidly grew into one of the top protein producers worldwide.
Fifty years on, a lot has changed. Japfa is now headquartered in Singapore, with operations in its home country as well as China, India, Myanmar, and Vietnam.
Moreover, the number of people in Asia is skyrocketing and the region’s cities are getting more crowded. The combined impact of population growth, urban development, and climate change means there is a shrinking amount of agricultural land to meet the growing demand for food.
Japfa is increasingly turning to technology to find the solutions to these food security issues. That’s why it has partnered with GROW, the agrifood impact accelerator backed by AgFunder, on Japfa Feeds The Future – an innovation competition to uncover tech entrepreneurs who can help Asia meet these challenges head on.
In the first of a two-part interview, AFN speaks to Japfa CEO Tan Yong Nang to find out how the company thinks about tech, its internal innovation strategy, and its partnerships with startups and entrepreneurs.
AFN: Why has Japfa decided to launch its first startup challenge in partnership with GROW?
Tan Yong Nang: Since 1971 Japfa has been feeding emerging Asia with nutritious, safe, and affordable proteins through an integrated industrialized approach to farming that leverages technology and innovation. On the occasion of our fiftieth anniversary, Japfa has launched this competition in partnership with GROW and invites startups to advance the agrifood industry to new frontiers with innovative ideas and technologies.
On the back of our group value of ‘growing towards mutual prosperity,’ Japfa believes in promoting growth-orientated relationships, and creating opportunities for startups to implement solutions that can benefit the entire community. We can do this by reducing barriers to entrepreneurship, such as running pilots or attracting investors.
With this competition, Japfa aims to help innovative ideas grow into viable solutions that improve the production of quality proteins and, ultimately, the nutrition of millions of people.
We want to create an ecosystem where various stakeholders, from public and private sectors, collaborate to tackle some of the most pressing challenges in the livestock industry in Asia, including its competitiveness and sustainability.
We also want to grow awareness among innovation-generating communities and younger generations towards a goal that should be a priority for everyone: building a secure and inclusive food system.
As Japfa enters its fiftieth year, what are the biggest tech-related challenges and opportunities it faces?
Growing populations, increasing disposable incomes, climate change, and demand for safe and nutritious food are impacting the food system. It is necessary to improve yields, traceability, and nutritional value, and to reduce environmental impact. At the same time, we need to be profitable and generate value for our shareholders.
To answer these challenges, three factors are key.
The first is people – having the right people with the right competences to build a strong team, which also includes the ability to attract talent in order to implement our strategy.
Second is science and technology. Livestock breeding is one of our key competencies. We use superior breeds and adopt a scientific approach to animal husbandry to build solid breeding pyramids. Beyond that, a strong data foundation and exploitation of digital technologies – including machine learning, artificial intelligence and IoT – will enable us to perform efficiently, to meet growing demand in a high-volume data environment.
Third is animal health and biosecurity. Nutrition and welfare reinforce the quality of our products and achieve high production yields.
In terms of opportunities, our business is vertically integrated from animal feed production and breeding to commercial farming and food processing. This allows us to provide greater food traceability and security, to have sufficient breeding genetic stock and good quality offspring, and to capture value at different points of the value chain.
The Japfa business model of ‘produce locally and consume locally’ allows us to mitigate supply chain and logistics issues and capitalize on the global trend towards local food self-sufficiency.
By championing our diversification strategy across proteins and markets as well as our integrated industrialized business model, we have been able to create a good foundation for the future.
Over the years, what are some of the technologies and solutions that Japfa has developed — or brought on board from outside — to help make its business more sustainable and efficient?
We consistently monitor new technologies to ensure we have foresight to what the future might hold for us – and also, to time our entry such that we always tie the adoption of those technologies with tangible and sustainable long-term business values.
We have forged strategic alliances with global leaders in breeding research, such as Hendrix Genetics for our swine operations and Aviagen for our poultry operations. Within the Japfa group, our company Vaksindo is the first animal vaccine manufacturer in Indonesia, conducting research into, and producing, autogenous vaccines for the poultry industry. These are some examples of technologies that have been mainstays towards our efficiency and sustainability in the livestock industry.
When we meet promising new ideas, we work flexibly with these innovators towards tangible business outcomes. In our aquaculture business in Indonesia, for example, we have worked closely with local startup eFishery for the last three years to enable solutions for our farmer customers.
Moreover, we do not shy away from working with very early-stage teams. We believe that, by partnering them with our in-house testing facilities and industry experience, we can quickly mature ideas into results together.
As an example, we are currently working with students from Imperial College London for their in-degree project, developing a feasible automated weighing solution for poultry. Due to the promising results, they’ve incorporated a company to allow for exchange of services and further development.
What collaboration, innovation, and investment models is Japfa using to ensure it’s at the cutting edge of technology?
As a business that puts customers at our heart, many innovations emerge from the grassroots, in the interface between our technical sales teams and our customers. By keeping ears close to the ground on real problems, we stay astride of all emerging issues, which in turn presents innovation opportunities.
On top of our innovation efforts within each division, we subscribe to a network approach to innovation. I3 [Innovation Introduction Initiative] is our program mandated to work with innovators, monitor new technologies, and evaluate their development and possible future applications within the company.
We believe we can only stay on the cutting edge if we leverage relationships and collaborations with experts, specialists, and innovators that have complementary skills to our excellence in operations.
Our network-based model makes it easy for the burgeoning group of investors interested in this sector to identify promising ideas, and we invite like-minded investors to consider us as a partner.
Increased investment interest will certainly strengthen the food system. But through collaborative working models between startups and innovators, investment bodies, and industry experts like us, we can accelerate development and increase value and returns for all stakeholders in the food system. We already work with a select group of sector-relevant funds.
With this competition in collaboration with GROW, we extend this network model and wish to actively signal interest in new technologies and ideas that can grow into viable solutions.
In parallel, we continually look for technology vendors with mature and proven solutions, as well as a strong innovation ecosystem, to help us gain competitive advantages through digitalization and adoption in a fast and sustainable manner.
In what ways is Japfa using technology to work more closely with farmers and their communities?
Japfa strives to be a ‘total solution provider,’ using technology to closely serve our customer farmers. We have a relentless commitment to producing high-quality products, that ultimately result in superior results on farms and by farmers. This is only possible by keeping up with technology, including developments in genetics, vaccines, biosecurity, and feed.
Part and parcel with our leading-quality products is our technical support. We develop and improve services for our customers, and we’re frequently able to offer farmers solutions to the difficult field challenges they face.
These technical solutions are immediately relevant to our customers – who typically do not have their own dedicated teams for technology – and remain a key benefit and mainstay of our enduring relationship with them.
For example, during the avian influenza crisis which began in the early 2000s, we worked directly with the World Health Organization and Food & Agriculture Organization to develop recommendations for the Indonesian government. We remain the most complete repository for the virus evolution in Indonesia. In our effort to maintain a matching vaccine and minimize viral drift, we work closely with the Erasmus University Medical Center in Rotterdam – a leader in AI research – to employ statistical tools to maintain the most updated vaccine seed for various farming environments. These matching vaccines provide tangible security to our farmers and their flocks.
Another example: Our Aquaculture Technical Development team noticed an issue with upwelling after heavy rains, which deeply affected survivability of fish. The team used engineering and chemistry to develop an upwelling prevention system, consisting of an early detection system and a proprietary solution to apply onto the pond should upwelling be indicated as likely.
When it comes to digital, we are exploring how mature mobile accessibility – especially for our target demographic of farmers in emerging economies – can enhance connections with our customers and stakeholders.
We have seen during the Covid-19 that our customers have seamlessly accepted video as an alternative to face-to-face interactions. Towards our goal of being ‘total solution provider,’ this means speedier information-sharing in both directions.
At the Aquaculture Hatchery, we are better able to respond to customer info requests related to disease or traceability after introducing our QC Sharp smartphone app.
Other mobile solutions we have deployed in our Aquaculture and Poultry Division help our dedicated technical experts to monitor and manage our preferred farmers’ production cycle and performance on site.
We have confirmed that by empowering the farmers to holistically view and manage their own performance, our ability to troubleshoot and support them in operational issues is also enhanced.
The farmers themselves are able to record their daily monitoring results and use the captured data to analyze and build an actionable performance improvement plan. Japfa is in turn able to use the aggregated data for the evaluation and improvement of our feed and breeding technology performance.
Many of these digital solutions are launched and stabilized on our own farms internally and are progressively made available to our cooperative, plasma farmer, and preferred farmer customers before being rolled out to our wider customer base.