The Cooperatives and Small and Medium Enterprises (SMEs) Office of the Riau Islands Province is currently designing a new business scheme to salvage the operations of the Merah Putih Village/Sub-district Cooperatives (KDMP/KKMP). This step was taken after two pilot cooperatives in Buluh Island (Batam) and Kijang Kota (Bintan) were forced to temporarily suspend their business activities due to high daily operational costs that were not offset by revenue.
Head of the Riau Islands Cooperatives and SMEs Office, Riki Rionaldi, emphasized that the suspension of activities was not caused by a lack of public interest. The main issue lies in the initial business model, which was run independently, meaning it lacked a strong capital system and an efficient goods distribution ecosystem to support rent and employee salaries.
To address this issue, the regional government plans to establish a secondary cooperative ecosystem to shorten the logistics distribution chain. With a shorter supply chain, the cooperatives are expected to secure healthier profit margins to ensure their business sustainability.
In addition to improving distribution channels, the Merah Putih Cooperatives will also be integrated with various national strategic programs. These include the distribution of subsidized staple goods such as LPG and cooking oil, as well as involving the cooperatives in the supply chain of the Free Nutritious Meal (MBG) program in accordance with directives from the central government.
The success of this market integration scheme has been proven at the Merah Putih Cooperative of Pengudang Village, Bintan Regency. The cooperative managed to record daily transactions ranging from IDR 18 million to IDR 25 million, thanks to its ability to become the main logistics supplier for hotel chains in the Lagoi tourism area.
Currently, there are 407 Merah Putih Cooperative units across the Riau Islands in various stages of physical development and land preparation. The regional government is optimistic that these cooperatives will grow strong and independent once the entire business ecosystem, supply chain, and capital intervention are fully operational.
