Headline / July 2019

Leading Triputra’s Tech Pivot

In the middle of a Sumatran plantation, people equipped with smartphones snap every fruit bunch on each oil palm tree. Not a single bunch is missed, even loose fruits laying on the ground are accounted for.

By Dion Bisara and Albert W. Nonto

At the command center, meanwhile, an artificial intelligence program fires up, processing each image and counting how many fruits there are on each bunch. It then tells the processing mill operator how many palm oil fruits to expect and estimates how much oil will likely be produced.

Thousands of kilometers away, at the Triputra Group headquarters in South Jakarta, Arif Patrick Rachmat checks his smartphone. At the touch of a button, he can access real-time information on everything he needs to know about the plantation – from total production, to how well a single tree has performed over time.

Several years ago, this type of data was hard to come by. It took teams of specially trained people weeks to collect it and the result may not have been as impactful, as the plantation operator would not have been able to react timeously, or in such precise manner.

Take oil palm harvesting. It is a labor-intensive process, as the plant morphology and areas where the plants grow make full automation impractical. And while this ensures jobs for millions of people, it also comes with inherent drawbacks, due to human error.

Harvesters may forget to harvest fruit from a particular tree, or neglect to collect the harvested bunches from some areas. Studies estimate that between 2 percent and 5 percent of harvests in plantations across Indonesia are lost this way.

Now, thanks to the GPS tag feature, Arif can tell exactly where harvesters forgot to collect the fruits.

“This may seem trivial, but 1 percent of additional harvest, for essentially the same cost, goes a long way on our bottom line,” Arif said.

He added that Triputra has been working with United States-based artificial intelligence startup Canotic and IBM Research, the American information technology giant’s research division, to develop technology for use in oil palm plantations.

Arif said the company also deploys drones to take aerial photographs used to count trees and measure canopy sizes. They further use remote-sensing technology to assess the health of trees, down to the detail of what nutrients each individual tree may need – a feat that previously required weeks of examination in a laboratory.

“I believe digital technology can play an important role in our business, even in a centuries-old sector such as palm oil farming. It is not a cheap investment, but we must take a long-term view,” said Arif, the second son of seasoned automotive executive Theodore Permadi Rachmat, whose Midas touch saw him build his own conglomerate two decades ago.

The Triputra Group now spans roughly four sectors: agribusiness; manufacturing; mining; and trading and services.

The group’s crown jewel is palm oil producer PT. Triputra Agro Persada, which owns the plantation in Sumatra and another in Kalimantan, where Arif honed his leadership skills over the past decade. PT. Kirana Megatara, the group’s rubber producer, supplies the world’s 10 largest tire manufacturers.

Triputra has shares in Indonesia’s second-largest coal miner, Adaro Energy, along with the family’s relatives and close friends: Garibaldi Thohir, Edwin Soeryadjaya, Sandiaga Uno and the late Benny Subianto.

The group also has large interests in the logistics industry, with publicly listed PT. Adi Sarana Armada and Puninar Logistics, which provide integrated supply chain, warehouse, and transportation services to the manufacturing industry.

Tech Frontier

His experience with high technology in oil palm plantations further convinced Arif that the future for his group may lie in its ability to adopt and use new digital tools to expand its business frontier.

Over the past two years, Arif has immersed himself in Indonesia’s bustling startup scene, rubbing shoulders with among others, William Tanuwijaya, founder of e-commerce platform Tokopedia, and Nadiem Makarim, who started online-based transportation, logistics, payment, food delivery service GoJek, Indonesia’s first so-called unicorn company.

“They all met with my father in their early stages. There, I saw opportunities to be explored in this field,” Arif said, referring to tech startups.

And it did not take Arif long to invest in startups. Among his early holding are Ruangguru, a study-assistance application for students, from elementary to senior high school; TaniHub, a marketplace and financing platform for smallholder farmers; Hara, which connects rural smallholder farmers with banks, insurance companies and input producers through data; and eFishery, a “fishtech” startup that provides an Internet of Things solution and data platform for fish and shrimp farming.

“We want to see new entrepreneurs and help them succeed and crack society’s problems,” Arif said.

The entrepreneur’s experiences have also given him the confidence to launch the group’s own startups.

The first was Kedai Sayur, which just recently raised $1.3 million in seed funding led by seasoned venture capital firm East Ventures.

The startup came up with a simple proposition: helping the small retailers and hawkers many urban Indonesians still rely on for their daily purchases of fresh produce at an affordable price.

“It is estimated that 50 percent of fresh produce is lost in the process of getting it from farm to fork. By buying directly from farmers, we greatly improve logistical performance,” Arif said.

Kedai Sayur, co-founded by Adrian Hernanto, Triputra’s former business process and information technology director, has so far signed up more than 2,000 vegetable retailers and hawkers in the greater Jakarta area to make daily door-to-door deliveries.

The startup has set its eyes on fresh produce markets in the country’s urban centers, which in 2017, were estimated to be worth $8.4 billion in Jakarta, Bandung and Surabaya alone.

“We are growing very fast. It has grown five-fold just in the past four months,” Arif said.

Another Triputra initiative is Anteraja, a last-mile delivery service. It arrived on the logistics scene occupied by household names such as Tiki, JNE, Wahana and latecomers J&T Express and Lion Parcel, the logistics arm of Indonesia’s largest budget airline.

But Arif is not concerned about the crowded market and still sees plenty of room for growth. American multinational investment bank Morgan Stanley estimated that Indonesia’s e-commerce market was worth $13 billion in 2018, having recorded 50 percent annual growth over the preceding two years.

It suggests that the e-commerce market in Southeast Asia’s biggest economy may follow a similar growth trajectory to China’s and expand by at least 32 percent annually to $52 billion over the next five years.

That would drive up demand for customer-to-customer delivery services. “Even in China, we can see many delivery service providers co-existing,” Arif said.

Triputra teamed up with Tokopedia and China’s SF Express, one of Asia’s largest delivery companies, to help with the technology side of the business.

Tiputra’s role in the joint venture is to contribute to human resource development, tapping the group’s widely admired corporate culture. A recent viral meme on social media showed an Anteraja courier calmly passing through a security barrier to deliver a package during the violent post-election protests in Jakarta in May.

“Logistics are basically a service,” Arif said, adding that the rest depends on human resource quality and commitment.

“Our core excellence is in managing people and building a corporate culture based on integrity, excellence, compassion and humility,” he said.

In slightly more than a month after launch, Anteraja already had more than 2,000 employees staffing 200 staging points in Java, Sumatra, Kalimantan, Sulawesi and Bali. With Anteraja, sellers on e-commerce platforms can expect their merchandise to be collected by a courier and delivered within a day or two to several major cities in Indonesia.

Arif has big expectations for Anteraja. “Within the next few years, we hope to reach a valuation of $1 billion,” he said.

Triputra’s other digital startups, car auction platform Caroline-id.com, and car rental platform Share Car, are built upon the group’s strength and wide experience in a dealership network and car rental business.

“Our major theme in this digital endeavor is mobility and logistics. Having owned and operated an offline business beforehand makes it a lot easier to build an online business,” Arif said.

He added that he would continue to look for ways to implement new technologies across the Triputra Group, either by implementing automation in manufacturing, or in exploring cost-efficient ways to turn palm oil into fuel.

Arif is not concerned that the implementation of new technologies would result in job losses in the group. He said his experience in oil palm plantations showed that the newfound productivity resulted in demand for more workers.

After all, compassion is the one value Arif puts above all others in the group’s technological endeavors.

“We always ask how to use technology to help as many people as possible,” he said.