Indonesia Equity Strategy - Pulse Check: KTA from Nourishing Futures

Macro and Strategy GH JT 291 11th Nov, 2024

One of the key projects from Indonesia’s new government is the Nutritious Meal Program (NMP) – as highlighted during our channel check to India (see our previous report here). We organised a site visit associated with President Prabowo's Nutritious Meal Program (NMP) pilot project in Sukabumi, West Java on 4 November 2024 as part of our Indonesia Conference 2024. Here are the key highlights:

Project overview

The pilot project, managed by President Prabowo's Foundation, has been operating for 10 months, providing 3,300 meals/day to 20 nearby schools including preschools, elementary, and high schools, both public and private. Local schools report positive feedback, with improved attendance and fewer unexplained absences.

Details on the operations

Operations prioritize local sourcing, with raw materials like eggs and vegetables supplied by local residents through a cooperative—we observed egg and fruit deliveries during our visit. The kitchen employs 36 local residents who are paid above the regional minimum wage. Meals are prepared in batches between 3 AM and 11 AM to ensure timely delivery. Distribution covers a 5km radius, with schools nearby receiving hand-delivered meals, while trucks serve farther locations. Strict control over raw material levels is maintained to balance availability with consistent food quality.

Monitoring and key challenges

Monitoring and evaluation efforts will focus on digital tracking of deliveries and absences, regular data collection on students' health metrics (such as height and weight), and gathering feedback from teachers and parents. Key challenges include securing a consistent milk supply amidst high demand, budget limitations, and few available substitutes. Additionally, minimizing food waste while maximizing nutrient absorption is essential. As the program scales, ensuring timely financing for working capital will be crucial to maintaining smooth operations.

Outlook for 2025 – minimal risk to the budget

The 2025 outlook aims to provide 3 million meals daily, reaching 5% of all students registered with the Ministry of Education, through 1,000 kitchens each producing 3,000 meals per day. The model for meal preparation—whether centralized kitchens, school-based setups, or third-party catering—is still under evaluation. We view this initiative to be long-term positive for Indonesia’s human capital quality. In the first year, the government will spend IDR71tn from government budget to support this program – which has been incorporated into the government’s planned budget deficit of 2.53% for 2025.

 

Fig. 1: Local workers working to cook the meal

Source: Verdhana research

 

Fig. 2: Meal packing preparation

Source: Verdhana research

 

Fig. 3: Raw material delivery

Source: Verdhana research

 

Fig. 4: Site visit to inside the kitchen

Source: Verdhana research

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Gerald Hugo (gerald.hugo@verdhana.id)

Jupriadi Tan (jupriadi.tan@verdhana.id)