Coffee sorting and coffee labelling After the tsunami (2004) an MOU (peace agreement) was signed between the separatists (GAM) and the local government in Aceh. This made it possible for investors to come back to the area and build up local businesses. On 16 March  2006 Koperasi Permata Gayo, a coffee cooperative, was established at Kampung Simpang Utama in Bener Meriah district, Aceh, Indonesia, by 50 farmers with 68 ha of coffee. Financial and logistic support came from an exporter (Mandago) at the beginning. Right now they have 3,089 members.

Since 2009 Permata Gayo exports coffee (green beans); 30% to Europe (to the Netherlands, Belgium and Germany) and 50% to the USA. The cooperative has a production of 3.750 m3 ton/year of organic coffee which come from area of 4.221 ha in Aceh (0.5 ha – 2 ha per farmer). They only buy coffee  beans from their members, when they have contracts with oversee buyers. 
The cooperative also sells 100 kg of roasted coffee per month to Bali, but not with their own name or packaging. The plan is to sell to the bigger supermarkets in Indonesia, and also to Singapore, Korea and Japan, once the brand has been developed.

Sales of roasted and packaged coffee; labelled
During the company assessment some business ideas were discussed.  Among them was the processing of coffee to a final product (roasted and packaged) for the local market. Right now the Permata Gayo coffee is already successfully selling roasted coffee in Bali (100 kg per month), but it is not packaged and labelled by Permata Gayo. They would like to start their own coffee line and sell to larger supermarkets, like Carrefour. Besides the national market, there are also possibilities to send packaged coffee in Asian countries, like Singapore and Korea. 
Permata Gayo can already produce the coffee up to roasting. What they still need to develop is a label/name; the packaging and develop a sales and marketing plan for the most interesting markets for roast and ground coffee. 
Sorting machine
Once the fried coffee beans are transported to Medan and have reached a humidity of less than 15% they have to be sorted. This is done by women, who are hired on contract basis; they get paid per kilogram of sorted coffee. With the increasing competition in the coffee market but also the decreasing number of women willing to do this work for 8 hours per day, it becomes more and more difficult to get the sorting organised. There is a coffee sorting machine available on the market, that could replace approximately 80 women doing the same work, although there is still need for staff to check the coffee that has been sorted by the machine. 
Problem analysis
There have no external audits been performed yet within the cooperative. So far, only audits were performed by Fair Trade International on the premium expenditure. 

The financial management is in the hands of the manager, he uses Excel. A training is given at the moment by US Fair Trade, in the use of Probass. So far the results have not been very positive. Staff seems to find it difficult to work with Probass and or mistakes are made. which leads to differences between the registration in Probass and Excel. Policies and procedures for financial management are not written down. Also the cooperative has not HR manual. Membership registration in a computer programme has not yet been completed, as well as setting up a credit scheme.

Permata Gayo only makes plan for one to two years, with a budget depending on the total premium to be received. There is not strategic plan for 4-5 years.
First calculations have been made for both business plans. They still have to be developed further.
Action plan
•	Audit by external auditor: Permata Gayo will cover the costs of the audit 2012, while Agriterra will pay for the audit 2011.
•	Draft a manual of the financial procedures and policies. Permata Gayo will work this out, support will be given by Agriterra (deskdays)
•	Financial management: together with US Fair Trade financial management has to be improved, using Probass. Training of staff and board has to be part of the plan.
•	Permata Gayo will work out a strategic plan for the next 4-5 years and put it forward to the board and the general meeting; both business plans will be included.
•	Both business plans have to be researched: feasibility plan / budget plan / Go-NoGo

Support requested: 
1. Feasability study on sales of labelled coffee Euro 8,000
2. Marketing strategy in Indonesia and Asian market Euro 8,000
3. Feasability study on use of soriting machine Euro 8,000
4. Financial audit 2011-2012 Euro 2,750

Feasability study and marketing strategy for Gayo coffee in the Indonesia and Asian market.