HEAL Fisheries

ASL is a community-owned enterprise in Siak, Indonesia. In 2015, peat fire was one of the biggest contributing factor to Indonesia’s emission and toxic haze, including from Siak. The Government have since issued stricter policies on for peat protection. However, peat ecosystem communities are still struggling to find livelihood options that is peat friendly. ASL developed HEAL Fisheries based on local tradition to serve snakehead fish as immune booster. Using low temperature steam distillation and 'ikejime' techniques, we  extract albumin content from snakehead fish and process it in liquid & powder as ingredients for health supplement. As quality of the ecosystem determines the quality of the snakehead fish, our solution offers a business case for peat conservation through fish cultivation in peat conservation and canal blockage area. Albumin is valuable for wound healing acceleration, regenerative medicine and immune booster with estimated market size of USD 6.77 billion by 2026 globally.

Peat is a global treasure with its function as carbon storage, water management, wildlife preservation as well as archaeological & cultural heritage. However, peat must be wet to function well. Peat fire was one of the biggest contributing factor to Indonesia’s emission and toxic haze level in 2015. Responding to this, the Government have taken stricter measure through policies on for peat protection. While larger companies can adjust with the new rules, communities living in and surrounding peat ecosystem are struggling to find livelihoods options. Even when they successfully develop peat friendly commodities, there is limited sales margin when sold as raw materials. Our solution address this problem by establishing value-added industry for peat friendly commodities with a flexible structure able to accommodate community ownership. With estimated market size of USD 6.77 billion by 2026 globally - albumin extract from snakehead fish is identified as a strategic business choice. As quality of the ecosystem determines the quality of the snakefish, this solution also offers a business case for peat conservation. We also aim to help cater the growing needs of strengthening immune system during and post-pandemic through health & nutrition products, particularly for vulnerable communities. 

Our solution keeps our users, community members and peatland healthy and happy. The technologies utilised in our solution are present in both on the cultivation and production. On cultivation side, our solution focus on cultivating snakehead fish in peat conservation and canal blockage area – designed originally only to prevent peat fire. As quality of the ecosystem determines quality of the snakehead fish, this offers a business case for peat conservation. On production side, we draw inspiration from local tradition of steaming snakehead fish as post-surgery remedy. Using low temperature steam distillation technology, as used in essential oil, we extract albumin from snakehead fish in liquid form. We also combine  'Ikejime', a Japanese way to kill fish which claims to be more humane and likely to result in tastier fish, to extract optimum level of albumin from fish. With simple dehydrating equipment, liquid albumin extract can be further processed into powder form for easier transportation to our buyers in the health & nutrition industry. Our community enterprise business model also provides community with an opportunity to become shareholders, snakehead fish cultivators and sellers, or production staffs - allowing them to benefit directly from the solution and improve their welfare. 

Siak District, like several other regions in Riau Province also experienced a massive peat fire incident in 2015 with devastating economic and health consequences. Siak District is a district with the largest peatland on the island of Sumatra with population of 457.940 people. More than half or 57% of the Siak District area is peatland, which covers an area of 479,485 ha. Of the total peat area, 21% of them are deep peat, with a depth of 3-12 meters. This approximately represents nearly 100.000 community members living in villages within and surrounding peat ecosystem which must remain protected otherwise becoming fire-hazard. While larger companies can adjust with the new rules, communities living in and surrounding peat ecosystem are struggling to find livelihoods options. Even when they successfully develop peat friendly commodities, there is limited sales margin when sold as raw materials. Failure to do so might result to community draining the peat and cultivating commodities with mature market, including peat and acacia - which are not peat friendly. This problem statement has become our guidelines to build HEAL Fisheries. 

STRONG LINKAGE WITH PEAT PROTECTION 

HEAL Fisheries builds community based enterprise on value added products from snakehead fish mainly cultivated in peat conservation and canal blockage area. There has been little practice of cultivating snakehead fish in peatland media while our research have shown that healthy peat ecosystem also boost the quality of the snakehead fish and its albumin content. As quality of the ecosystem determines quality of the snakehead fish, this offers a business case for peat conservation. From this lense, should the business thrive - we will be serving the entire Siak population by preventing peat fire incidents from happening. 

VIABLE COMMUNITY BUSINESS CREATED 

Our solution is to establish value-added industry for peat friendly commodities with a flexible structure able to accommodate community ownership. With estimated market size of USD 6.77 billion by 2026 globally - albumin extract from snakehead fish is a strategic business choice which allows community to really build a viable scaleable business. The revenue source for ASL derives from sales of extracted albumin in pure and mix form, sales standardised high-protein fish flours and other derivatives products targeted for direct consumption including biscuits, dehydrated fish skin crackers and protein bars. 

Our community enterprise business model also provides village communities in Buantan Besar, Dayun and other neighbouring villages (approximately 1000 people by 2025) have options to benefit directly from the sales revenue, namely (i) annual dividend from ASL for entities registered as shareholder (currently there is one village company registered as shareholder of ASL), (ii) sales of snakehead fish from their cultivation area and (iii) salary as employees of ASL research and/or production units. 

This is targeted to scale and serve the 100.000 community members living in villages within and surrounding peat ecosystem of Siak which must remain protected otherwise becoming fire-hazard. 

COMMUNITY CAPACITY ENHANCED 

Our solution offers an innovative way using more accessible technology - the process must also be simple and affordable enough so that community based business are able to adopt the cultivation and production practice. This approach is consistent with our mission of building community based industry. To ensure quality of the end product, ASL is collaborating with several research partners including Agrapana Bio to develop Standard Operating Procedures (SOP).  

UPHOLDING CO-CREATION PROCESS 

Prior to establishing ASL and HEAL Fisheries, we applied several process to best connect with our sense of purpose and co-create solutions directly with representatives of the 100.000 community members living in peat ecosystem of Siak. The following are the steps :

1. Scout & Groom Stage 

The Annual Sustainable District Festival of LTKL, our district association partner, are utilized as the first ‘trial’ for stakeholders’ collaboration to (i) identify local champions, (ii) identify collaboration pattern and (iii) conduct stakeholders & needs assessment. This step is usually used as a trust building period with and between local communities by co-hosting and co-organizing the festival. This step led us to find village communities with strong desire and needs to avoid peat fire and willing to explore new ways to do it.

2. Discovery Stage

The following step involves field assessment process hosted by by the village champions discovered during the first stage. We also invited a technical experts to join the team and support the assessment. During the field assessment, team identified (i) history, culture and characteristic of livelihood of community at the districts (i.e. farmers, fisherman, etc.), (ii) strategic commodities & potential products, (iii) strategic village locations, village business and legal entities (i.e cooperative, BUMDes), village planning and budgeting, village boundaries (with maps) and biophysical conditions [interconnection with forest, peat and other critical ecosystem], households welfare condition [i.e monthly income, access to basic needs] and stakeholders mapping within the villages (iv) district government target and KPIs (per agencies) regarding sustainability, land-use and community livelihood and (v) Human Resources, Infrastructure, Technology and Logistic capacity of the district. During this stage, we discovered the local tradition of using snakehead fish dishes as post surgery remedy and immune booster. 

3. Design Stage 

Technical Experts Team and LTKL Secretariat co-create implementation strategy, timeline and narrative based on information from the Discovery phase

·   Recruit local Siak team based on a transparent and inclusive process

·   Stakeholders Roadshow based on relevant mapping at the district

·   Co-create Business Model Canvas for Siak with core multi-stakeholders team (government, CSO, community, academics, private sector) which include (i) selected strategic commodities, products and sector, (ii) key elements and timeline of implementation and (iii) key stakeholders to support implementation. Institutional Design for (i) Multi-stakeholders Delivery Unit (i.e PUKL/PUPL/Risbangda) and (i) community-based business entities (independent legal entity)

4. Implementation Stage

Our solutions is anchored on the needs to protect and preserves peat ecosystem in Siak and beyond to act as carbon sink and prevent peat fire. HEAL Fisheries builds community based enterprise on value added products from snakehead fish mainly cultivated in peat conservation and canal blockage area. As quality of the ecosystem determines quality of the snakehead fish, this offers a business case for peat conservation. With estimated market size of USD 6.77 billion by 2026 globally - albumin extract from snakehead fish is a strategic business choice which allows community to really build a viable scaleable business. 

With the help of our partner, we have completed the initial production testing in Jakarta to ensure that the technology utilised (low temperature steam distillation) will yield optimum level of albumin before building our own research & production centre in Siak. We are currently testing whether our facility in Siak will be able to consistently produce similar quality. We are also working with community in Buantan Besar & Dayun Village in Siak to properly apply the fish cultivation method in peatland media. This aspect still requires more experiments to reach optimum production capacity. We have a solid start for the business model by securing multi-year contract from a domestic health supplement company for the albumin powder. They also have shared their own market value of approximately 200.000 USD per year. However, we still need to better understand the health & nutrition market landscape to project future growth accordingly. 

While extracting albumin from snakehead fish is not a new practice, majority of existing process requires using complex chemical solvents and requires high-precision laboratory setting. SL offers an innovative way using more accessible technology - simple and affordable enough so that village business are able to adopt the practice and produce high quality product when guided by solid Standard Operating Procedures (SOP). This approach is consistent with our mission of building aggregated community based industry as opposed to one large corporation.  

Similarly, there has been little practice of cultivating snakehead fish in peatland media while our research have shown that healthy peat ecosystem also boost the quality of the snakehead fish and its albumin content. HEAL Fisheries offers innovative cultivation method in peat conservation and canal blockage area – which are designed originally only to prevent peat drainage and fire.

Since the beginning, we have also created partnership with local government - as pathway to also influence land-use policy at the district. Should this business model works, it may provide stronger clarity for politically elected leaders in Siak to uphold green siak and prioritise peat as their vision. ASL have also build a formal relation with LTKL, the district association for sustainability. This innovative structure has potential to scale our business model to other peat-rich district members of LTKL and help build a new positive paradigm about peat conservation. 

Two villages in Siak will be extended into 10 villages involvement by next year with community shareholding increased to at least 30%. Our Production Centre which now is supported by 10 young professionals should be replicated in another sub-district by 2023. We should be supporting at least 10000+ unique users of albumin based health supplements by 5 years. This will be done through 3 production centres in Siak, allowing us to better protect peat ecosystem area in at least 3 sub-districts. 

Numbers of peat-rich & fire prone area supported by running production centers. Revenue stream of ASL coming from HEAL Fisheries, including dividend shares directly to community, Amount of unique users serves by albumin based health supplement. 

Total of 17 persons which consist of 3 board members, 8 full-time staff, 6 volunteers. 

We found that our first barrier is how to build good quality control and business governance for the local staff. Since we have already made progress in the production but we need to keep the good quality of the product, we need to ensure that the staff who are hired from the local community will implement the standard operation procedure. Therefore, we apply to Solve in order to gain access to experienced mentors and advisors that can help us find the right method and way to train the staff.

Second, as we want the business to scale up and benefit the local community, we also need to ensure that our business is ecologically sustainable and responsible. Currently, we are still in the middle of developing the business model to utilize the peat and its canal block in order for peat conservation. Therefore, applying to Solve will help us to find funding to develop this approach further. The funding will be beneficial for the short term, as we are going to elevate our business for piloting and for the long term, as we hope to replicate the similar business model (albumin production center) in other areas in the district. Moreover, this is an exciting opportunity to know the experts, practicioner, and people who work in similar movements and learn from them.

There are several organizations that we want to partner with such as international organizations, MIT grants, and Solve members. First, we are interested in partnering with the Investment Impact Exchange (IIX). They will be a great help to us to foster growth, maturity, and market readiness as their experience with other social innovators. Second, we are also keen to work with universities with extensive research on nature-based solution entrepreneurship. Third, we also found that partnering with Bambara Milk (MIT Solve Winner 2020) would be useful for our business development, specifically in working with the local communities.