15 Dec 2022

Winner of the 2022 Innovation and Entrepreneurship Award: Dr Syaifullah Muhammad

Syaifullah Muhammad: Paying It Forward Through Innovation and Mentoring for the Poorest Community.

Giving back to the community is Syaifullah Muhammad’s main goal upon his return from Australia in 2013, after completing his masters and doctoral programs in chemical engineering from Curtin University through a Higher Education (DIKTI) scholarship.

“I am mindful that I was able to go to Australia because of the public fund—the money raised by the men and women who work from early morning at the market to sell their produce. They pay levies and taxes, and part of this fund enabled my study in Australia,” he said.

“Now that I’m back and have a good life, it’s my turn to help the Acehnese. The community is the poorest in Sumatra and the sixth most impoverished in Indonesia. I’m determined to pay it forward.”

The big opportunity came a year later for the adjunct professor at Syiah Kuala University in Aceh. He was assigned by Aceh Development Planning Board (Bappeda) to find out why the patchouli farmers in the province remained poor despite the plant being a prime crop in the market.

The assignment brought him on a journey across all regencies in Aceh, visiting villages, talking to farmers, and listening to their stories to understand the situation. The outcome was a report entitled Aceh Patchouli Regional Innovation System (SIDa Nilam) published in 2016, where he laid out the strategies and plans to improve the livelihood of patchouli farmers in the province.

Historical Crop and Research

Nilam, the Indonesian term for patchouli, is an acronym for Nederlands Indische Landbouw Atjeh Maatschappij, a company owned by Dutch colonial that regulated the cultivation and export of patchouli back in the 19^th century. The Dutch brought over patchouli shrub to Sumatra from The Philippines in 1895 and established the company in 1920 as the European demand for Acehnese patchouli oil flourished.

Patchouli essential oil has a fragrant aroma and is used not only for perfumes but also in skincare and medicinal products. The Acehnese variety of patchouli is of high quality and deemed the best in the world.

Indonesia supplies 90 per cent of the world’s patchouli oil needs. Back in the 1970s, Aceh produced 90 per cent of the oil, but now the number of patchouli farmers has dropped to only 10 per cent due to the armed conflict and the 2004 earthquake and tsunami. Only four regencies cultivated patchouli in 2014, and farmers were often deceived by middlemen.

Syaifullah offered three main strategies in his report: a roadmap and masterplan; inclusive innovation that engaged the community groups; and a penta helix model of a close collaboration between local and central governments, universities, businesses, the community, and the media. This collaboration would support research, innovation, and the commercialisation of products, and advance the market for patchouli.

“One of the recommendations in the report was the need for an innovation hub. The university had the human capital to innovate, and the Rector agreed that without innovation, the farmers would continue to struggle. I was assigned to spearhead the Atsiri Research Center (ARC) in December 2016,” he explained.

“ARC brought together a team of 57 people. We can’t be Superman, but we can have a super team that conducts various research projects,” Syaifullah said.

ARC was named the Centre of Excellence in Science and Technology for Patchouli by the Ministry of Education, Culture, Research and Technology in 2019. A year later, it received two grants from the Ministry of Finance through the Indonesia Endowment Funds for Education (LPDP) to research patchouli oil’s use as a medicated oil and in hand sanitisers, and to develop the active components of Aceh patchouli oil as an antioxidant and anti-ageing compound.

Innovation for Better Livelihood

The roadmap that Syaifullah proposed has three important goals. First, to help farmers improve the quality of patchouli cultivation and oil production. Second, the manufacture and sales of derivative products such as perfume, lotion, anti-ageing serums and hand sanitisers by local small and medium enterprises. Third, to ensure a good price for local patchouli oil.

Farmers, however, had one simple wish: to sell the crop at a fair price. Therefore, in 2019, the team established Inovac cooperative that would buy and sell patchouli oil. Inovac formed a consortium with a French company to buy patchouli oil produced by the farmers. In addition, Syaifullah raised investment money in Aceh and Jakarta.

“The money is to maintain an ecosystem that enables the farmers to have a good income. Aceh is one of the five provinces selected by the National Development Planning Agency and the Ministry of Cooperatives and Small-Medium Enterprises for a Major Project,” he said.

“Additionally, farmers can now ask for bank loans as our partnerships with France and other countries provides the bank a guarantee that we will buy the farmers’ oil,” he added.

There remained a problem with the farmers’ traditional steam distillation method using iron drums and dirty river water, which resulted in poor quality oil extract that sold only at Rp300,000/kg. Syaifullah and his team have come up with an innovative distillation method that is more efficient, extracting patchouli oil fit for export. ARC has also supplied farmers with good quality seedlings and taught them to use homemade organic fertilisers and biopesticides.

Syaifullah and his team also used another innovative method to purify this first extraction, utilising a vacuum distillation with fractionation. This yields a high-grade patchouli oil with over 60 per cent patchouli alcohol and is used in the manufacture of derivative products. The University has established a company called PT U-Green Aromatics International, to sell high-grade oil, reserving 20% of the oil for local SMEs.

These efforts have stabilised the price of patchouli oil, with ARC and its business entities having the leverage to make companies and middlemen pay farmers a just price for the precious oil.

Farmers now earn Rp500,000/kg or a net profit of Rp70 million per hectare within eight months. Seventeen regencies are now growing patchouli, and the production has increased from 150 tons of patchouli oil in 2014 to 350 tons annually.

Stepping Down the Ivory Tower

In 2020, Syiah Kuala University appointed Syaifullah to lead its Business Development Agency. Hundreds of young budding entrepreneurs have been trained by the ARC, and around 30 have kicked off their businesses.

In 2021, ARC built a production facility that can be used by local entrepreneurs. The facility is certified by the Food and Drug Monitoring Agency (BPOM), which means that its products have a BPOM certification.

“I represent the university as a commissioner in the companies it has established so that I can oversee the next generation of entrepreneurs and develop businesses based on my research on campus. You can’t uplift the community just by doing research on campus. We need to delve into the business world to secure income generation for the community,” Syaifullah asserted.

Click the video to watch Syaifullah's story:

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