MRS: SUSTAINING LIVELIHOOD THROUGH SPICE
Owned by Mr. Irwan Tosali and his wife, Multi Rempah Sulawesi (MRS) is a registered company in Indonesia. It is known as a consolidator, semi processor, and exporter of nutmeg and mace and other spices such as pepper, cloves, cacao, copra and dried ginger. They source their products directly from 13,000 farmers and their networks from North Sulawesi, South East Sulawesi and Maluku districts of Indonesia. It exports 70% of nutmeg and mace, which are classified as conventional, aflatoxin free, and organic to countries such as Netherlands, Germany, and Japan. It runs a fully compliant factory in Bitung City, Indonesia, where the nutmegs are cracked, sorted, graded, and packed together with other products.
MRS is known for its practice of fair price, wherein it pays the farmers a premium for their produce. Apart from fair price, MRS is also known for its commitment to build a sustainable business with its farmers. To realise this, it has integrated the provision of technical, post-harvest, and logistical support to its suppliers. MRS has set up 12 supply networks which are strategically located and equipped with post-harvest facilities such as storage, drying, sorting, and trucking. The various products are collected through these networks, processed, and picked-up for final processing in the main factory. The supply network is also used to communicate the selling price on specific volume/period to the farmers after a specific buyer is finalized.
“We started this company 14 years ago with the vision to increase farmer’s income, while catering to the buyer with high quality products at competitive prices. We are constantly strengthening our supply system and the relationship with our farmers, since they are the backbone of our company. It is our policy to encourage our farmers to plant other commodities and spices so that they can increase their income and resilience especially when there is a drastic drop, either in the production or price of nutmeg. Because of fair and premium pricing that MRS provides, many farmers are now taking up and going back to nutmeg production,” shared Mr. Tosali with great pride.
MRS is currently consolidating and exporting around 500 metric tons of nutmeg and mace. As this volume is to double by 2020, MRS is geared towards becoming a major nutmeg and mace exporter in Indonesia with more than 10% share in the country’s total export production. This also means expanding its business in Maluku, where a market development program on sustainable nutmeg is being undertaken by ICCO’s Regional Office in South East Asia (ROSEA) in collaboration with IDH-Sustainable Trade Initiative, and Common Fund for Commodities (CFC). It is being implemented by local organisations such as Horti Chain Center Indonesia and Tarakani Famer Group. The program provides technical training on sustainable nutmeg production and organic certification support to 5,000 farmers. MRS is one of the private enterprise partners, and serves as a resource on technical aspect, while at the same time providing access to market for the said farmer beneficiaries.
To realize this expansion plan, MRS recently partnered with Capital for Development (C4D) Fund, which is being managed by Capital 4 Development Partners (C4D Partners), formerly ICCO Investments. The assistance from C4D will help MRS quadruple its volume of trade on nutmeg, mace, pepper and ginger and strengthen its infrastructure such as additional warehouses and additional units in various districts. This growth is subsequently expected to increase the volume and value of commodities of small farmer suppliers by 3 times in the next 5 years. Consequently, the improved financial performance of the company and its business relations with suppliers are also expected to stimulate more farmers and producers to shift to organic production by giving a premium price for organic produce and by providing support in the certification process. In addition, this will also lead to the creation of 100 additional employments in MRS factory and supply units/networks.
Speaking on the partnership, Mr. Toto Camba, Regional Investment Manager for South East Asia, C4D Partners, shares, “Apart from capital infusion, C4D will also provide technical support in the area of finance and business planning and strengthen MRS’s management system. This partnership with MRS is also a very good example to showcase the complementary interplay between ICCO Foundations development agenda through the Nutmeg Value Chain Development program in Indonesia and the investment mandate of C4D, which invests in agribusiness related social impact ventures.”
MRS is optimistic that guided by its fair trade and good production management practices, and the partnership with C4D and ICCO ROSEA, it will be able to reach out and impact the livelihood of the 17,000 farmers and be a major player in making the spice chain sustainable.