Pretzels for Indonesia Note: This project has been cancelled, because the project partners have decided to withdraw the project.Indonesia is a vast and lucrative market for sweet and savoury snacks and this large potential consumer base encourages manufacturers to provide a wide product assortment of sweet and savoury snacks, offered under various brands and price levels. Both Partners, Chr. Verplancke Beheermaatschappij B.V. of the Netherlands and PT Global Indo Abadi of Indonesia, are currently moving in the snack-food business, mainly in sales and marketing. Both also collaborate with manufacturers or Private Label Companies: Applicant Verplancke is selling pastries and cookies under its own label Zielback and also the local partner has similar activities. Originally, the local partner had the idea to start producing the Dutch Stroopwafels in Indonesia but after checking the feasibility together with its Dutch business partner that idea was abandoned and replaced by the more feasible production of Pretzels. Pretzels are a dry snack food, which have unique shapes and a hard, shiny outer surface. They are mass produced using automated baking machinery: the technology for pretzel production is already widely developed and available. In Indonesia so far no pretzels are produced and only a small amount of pretzels is imported and sold for high prices in the upper market segment. The main target market for the various pretzel products will be the (domestic) Indonesian market and the focus will be on the low to medium market segment, where the disposable income is limited. The business opportunity proposed is to establish a 1,600 m2 pretzel factory in Bogor using international food safety standards and with a capacity of 300 kg of pretzel per hour. There will be employment for 65 persons.Corporate Social Responsibility (CSR)The factory will operate according to international ISO 22000 and HACCP food production standards. Specialists on hygiene, ISO and HACCP regulations will be hired for trainings.The new factory will observe the OECD guidelines for International Enterprises on CSR and the ILO Declaration on Fundamental Principles and Rights at Work. The project partners are dedicated to provide a working environment free of any form of discrimination.The factory will cooperate with two universities. Traineeships will be offered to students of the Technical University in Bandung and students of the Bogor Agricultural University (in food science and technology).Employees will be offered wages at least 30% above the West Java minimum wage. The current (2013) official minimum wage in the cities in West-Java is IDR 2,244,600 (around 170 euro) per month.Impact•	Employment and working conditionsThe official minimum wage in the area is IDR 2,244,600 per month . The lowest paid employees will earn IDR 3,000,000 per month in the first year. Every year salaries will increase with at least the average wage increase for the region. Expected increase is about 5%. The company will pay salaries according to the required skills and experience for other staff. Workers will be provided with official labour contracts and will be offered a social security package and medical support. All staff will be able to have full-time employment. Transport will be provided to the factory.•	Innovation / Transfer of knowledgePretzel production in Indonesia is new and so far non-existent. Imported pretzel products (in small quantity for upper market) are available.•	Chain effectsThe twelve different types of raw material involved in the pretzel production are supplied by approximately twenty suppliers who will commercially benefit: the procurement of all (raw) materials bought from local suppliers will annually cost 1,335,500 euro.On the clients’ and consumers’ side the pretzel product will provide new opportunities: local outlets and “warungs” will be able to offer their lower income customers a new and very affordable relatively healthy snack. Distributors and wholesalers will have a new product and potentially increased turnovers.•	Impact on the sectorNo real relevant impact, but the company might set a trend for healthier products and friendlier packaging.•	EnvironmentThe pretzel production is not chemically polluting. Sewerage water does not contain hazardous substances and some particles of fats and dough will be trapped in fat-trap devices. Wastewater treatment equipment will be installed. The factory will not have a negative influence on the availability of water in the area. Water will be sourced from PT Pam Lyonaisse Jaya, but the factory will also install a water well for own consumption.A solar water heating system will be installed on the factory’s roof. At the moment, photovoltaic (PV) power is not a viable option.The main environmental challenge will be in the field of pretzel packaging. The habit of just throwing away the packaging on the street is quite common in Indonesia. The partners are very well aware of the potential negative environmental impact by the littering of pretzel-packaging by consumers. Right from the start the company will use biodegradable packaging for the family-size packages. As soon as possible, single packaging will also be biodegradable, but this depends on price development.The factory will make sure to obtain all certifications and approvals from the government needed to run the factory, including the AMDAL (Environment Impact Assessment) license.•	Position of womenTechnical jobs, like the maintenance of machinery, and also hard physical work will be done mostly by men. Nevertheless, the partners plan to hire women for 80% of the positions in the factory.•	Impact on food safetyNo relevant contribution.•	Impact on waterNo relevant impact foreseen (see “environmental impact” above). To establish a pretzel production facility for the domestic market capable of producing 1,354,752 kg per year at full capacity and employing 65 persons.