AIBP Insights is a series of discussions held online which brings together a focus group of ASEAN stakeholders to discuss topics related to enterprise technology adoption in the region.
Last week, we kicked off our 2022 AIBP Insights Manufacturing series with a discussion on Realising the Potential of Digital Technologies in the Supply Chain, and Cybersecurity for Smart Factories in Manufacturing. You may view the summaries, playback of the discussions, along with other resources, here.
According to the World Economic Forum, ASEAN is on track to become the world’s fourth largest economic bloc by 2030. Southeast Asia currently has a growing middle-class demographic that will account for 65 percent of the population by 2030, a nearly threefold increase from 2010. Furthermore, with annual income growth in the region expected to range between 6% and 8%, ASEAN would account for 16% of the world’s new consumer class. Favourable demographics and rising income levels are expected to drive up domestic consumption by 2030, doubling ASEAN’s GDP to US$4 trillion.
The resulting increase in disposable income is likely to be reflected in an increase in demand for not only food in general, but also for high-quality produce. With concerns surrounding food supply disruptions, developing a resilient food supply chain has become one of the top priorities for ASEAN nations. These concerns highlight the urgent need for innovation in the agricultural and food processing sectors to develop sustainable production technology, improve the global food supply chain, and address food waste issues.
In our discussion on ASEAN Agribusiness Revolution in the Digital Age, featuring panelists from Charoen Pokphand Foods (CPF), Digital Economy Promotion Agency (DEPA), Eastern Economic Corridor of Innovation (EECi), FGV Holdings Berhad, Oracle, Philip Morris International, and Qualcomm, came together to discuss and share their perspectives on the adoption of digital technologies, food security in the agribusiness value chain, and the future outlook of the ASEAN agribusiness sector.
Adoption of Digital Technologies Supporting Sustainable Agribusinesses
With rising food demand, modernising traditional farming techniques is the first step toward greater efficiency. The use of new technologies to supplement traditional farming methods would assist farmers in taking the first step toward creating a smarter, more efficient farm.
Bimo Bayuaji, Manager Agricultural Innovation and Technology, Sampoerna, Philip Morris International, stated that affordability and accessibility are bottlenecks for smallholder farmers, and his team is looking for innovative ways to support farmers on a more cost-effective journey. For example, they investigated some technologies in the weather prediction modelling space to assist farmers in gauging and forecasting weather conditions, particularly during calamities, as extreme weather disasters may have an impact on farmers’ production.
Dr. Prapat Punpee, Assistant Manager, Bio-Based Industry Collaboration Division, Eastern Economic Corridor of Innovation (EECi) added that EECi provides infrastructure, knowledge, technologies, and human development for the upstream value chain, which includes plant and crop production. The most difficult challenge he observed was how farmers struggle to access technologies or innovations. Because the majority of farms in Thailand are owned locally by farmers, he emphasised the importance of having the necessary infrastructure and knowledge in place for the farmers to access the technologies or innovations.
Similarly, for Digital Economy Promotion Agency (depa), Dr. Yai Siddhichai, Executive Vice President, shared that they are tasked with the further development and adoption of digital technologies in Thailand’s agribusiness, ranging from applications of digital technologies in farming to logistics and storage in post-harvest.
Khun Todd Petporee, SVP, Business Development, Digital Committee, Charoen Pokphand Foods (CPF), shared some examples of digital technology applications at CPF, such as controlling humidity and temperature, utilising image processing to monitor animal health, and training robots to catch chickens and the cross-over application of technologies, in which robots used to catch chickens can also be trained to catch swines. Similarly, for Thailand-based robots, they are attempting to standardise these technologies for use in Canada and other countries. While there are many technology solutions for semiconductors and automotive manufacturers, he acknowledged that not many off-the-shelf solutions are compatible with their animal farms.
Alex Jee, Director Strategy Business Development at Oracle, shared some examples of how his teams collaborated with The Wonderful Company and Certified Origins to improve productivity gains using AI/ML and blockchain technology respectively.
Food Security in the ASEAN Agribusiness Value Chain
The pandemic has renewed manufacturers’ focus on becoming more transparent and agile in their supply chain processes. They are realising, as a result of this disruption, that suppliers do not always deliver, and that having a backup plan in place is critical to keeping things moving. One option is to use technology to track visibility and transparency in order to better assess what is required and offer alternative suppliers. Supply chain transparency necessitates companies understanding what is going on upstream in the supply chain and communicating this knowledge both internally and externally, added Dr. Nol Chindapol, Country Director, Qualcomm.
Traceability, according to Wan Norman Nasir, Chief Risk Officer at FGV Holdings Berhad, is critical because it involves the tracking and authentication of food sources. On the subject of sustainability, En. Wan added that they are working to manage climate risk and greenhouse gas emissions, which also requires tracking and having reliable data.
Overall, ASEAN agribusinesses are increasingly focusing on adopting a variety of technological solutions such as IoT, drones, automation, digital twins, demand planning systems, food storage technologies, and energy-saving technologies to address challenges in productivity, food safety, traceability, and minimising food loss along the supply chain.
Future Outlook: Opportunities for a Sustainable Circle Economy in ASEAN’s Agribusiness Sector
In recent years, there has also been a surge in interest in corporate social responsibility (CSR) in the food production industry. Food sustainability has emerged as a key decision-making factor for consumers, prompting food producers to incorporate it into their business strategies. With stricter compliance regulations and increased scrutiny surrounding business practices and their environmental impact, food producers have an immediate incentive to adopt sustainable practices in order to comply with regulations.
Concluding the discussion, En. Wan shared that he is personally interested in how the food industry can collaborate with other industries to drive sustainability. En. Wan is optimistic about the future of the circular economy, citing a recent example in which an Airbus A380 successfully completed a flight powered by cooking oil, the perfect illustration where industry waste can be reused in other industries.
As sustainability priorities come to the forefront with ASEAN’s largest enterprises leading the charge, we look forward to hearing from the region’s sustainability leaders on current developments in sustainability, ESG and the role of technology at the upcoming ASEAN Tech for ESG Award Showcase.
With that, we look forward to continuing our discussion on Data Driven Transformation – Moving up the Manufacturing Value Chain (8 April). Registrations are available here.
Do reach out if there are topics in digitalisation you would like to hear more of!
7 April 2022