TaniHub Introduces a New Business Unit "TaniSupply", Focused on Supply Chain

An agri-tech startup, TaniHub Group, introduces TaniSupply (PT Tani Supply Indonesia) focused on solving issues related to the supply chain. The firm was established in September, 19th 2019.

As a sidenote, TaniHub (e-commerce platform), TaniFund (p2p lending), and TaniSupply (supply chain) are operated under TaniHub Group. Each of them is working on different focuses with different regulators, yet one vision to accelerate a positive impact on the agriculture industry.

TaniSupply Director, Vincentius Sariyo explained the maneuver under its own entity will be more aggressive in order to develop supply chain business in agriculture. In fact, the license of TaniSupply stands under a different department with TaniFund (Financial) and TaniHub (Communication and Informatics).

In the warehouse, TaniSupply team makes purchasing from farmers. Next, the grading process for fruit and vegetables, measuring sweetness, quality control (QC), and quality assurance (QA). Lastly, a logistics team to ensure product quality until it's safely delivered to the customers.

"We're now in the middle, we have TaniHub upfront and TaniHub in the back for online distribution. TaniSupply will take care of purchasing from farmers, and the function of a chain, warehouse, last-mile delivery, quality control, and others," Sariyo explained on Wed (11/20).

The current warehouses are installed with a certain-standard cooler to keep the product from deteriorating. Warehouses can also be used, in terms of rent, by other parties to store food products for a certain period of time.

Investment in storage machines such as blast freezers will also be prepared to complement market needs. He even mentioned that TaniSupply is applying for certification for ISO 22000 related to food safety and halal warehouses. It is also possible to export to neighboring countries.

As a result, plans are to be developed from TaniSupply in the future, not only for the ecosystem within the group but also for the sustainability of the overall agricultural ecosystem.

The distribution of the TaniSupply warehouse will be focused outside of Java for the more integrated agricultural ecosystem. This includes shortening the distribution chain from farmers before being distributed to consumers.

To date, the company has some warehouses or distribution centers located in four cities (Bogor, Bandung, Yogyakarta, and Surabaya) and some other locations.

TaniSupply is targeting more locations around Bali, Sulawesi, and Balikpapan. The latest one will be located in Cikarang for 10 thousand square meters.

"In 2021, we're to open new locations in all over the cities throughout Indonesia."

Last-year issues with the agriculture supply chain in Indonesia

Sariyo explained the first initiative in building TaniSupply is to create an end-to-end agriculture ecosystem. There are more issues on the field to be solved with technology.

Each business unit from TaniGroup has different issues with a red needle to improve the agriculture technology that is currently a mess.

All this time, there's always been a mismatch in the composition of supply and demand in agriculture. It is due to the crops in different grades, not every off-taker (buyers, including middlemen) wants.

The rest of the low-rated crops forced to be sold way cheaper than the cost of goods sold (COGS). This is causing a loss for the farmers. Many more issues come from the old paradigm that imprisons local farmers, making it very difficult for them to grow.

TaniHub is said to cultivate 35 thousand farmers and agri-communities, providing 800 business certificates more or less. The majority of goods are fruits, vegetables, fish, chicken, eggs, and rice. Only, 90% of those are trading farmers or free trade.

"In order to fulfill the demand for TaniHub, 90% comes from trading farmers. Only 10% comes from TaniFund, so they [TaniFund] still have a lot of homework to do," TaniHub's VP of Corporate Services, Astri Purnamasari said.

The offline sales on TaniHub still leading with 80% than the offline service. Most of the offline consumers are supermarkets, Horeca, F&B industries, retails, and startups.

"Previously, TaniHub was directly focused on B2C through an application. As time goes on without scale-up, we finally switch to B2B."

The company also distributes some private label to the offline partners. For example, SommerVille for fruit-only goods; VIS for fish products; Fowler for chicken, duck, and eggs; GoldFarm for organic vegetables; and Lentik for rice.

With TaniSupply, TaniHub Group is tightening its position as the end-to-end agri-tech service. To date, there is no agri-tech player to serve end-to-end service in the agricultural ecosystem.

–Original article is in Indonesian, translated by Kristin Siagian