The International Labour Organization (ILO) and the Banda Aceh City Government officially signed a Memorandum of Understanding today (23/04) at the Banda Aceh Mayor's Hall. This partnership marks a strategic step to strengthen the micro, small and medium enterprises (MSME) ecosystem and support the implementation of the Banda Aceh Perfume City Programme based on its leading commodity, patchouli.
Aceh is well known as one of the world's best producers of patchouli oil. This aromatic plant has been cultivated for centuries in the hills of Aceh and is now a key ingredient in the global perfume industry.
This collaboration is part of the ILO's support, as a United Nations agency focused on employment issues, through the Promoting SME Enterprises through Improved Access to Financial Services Phase 2 (Promise II Impact) Project. Funded by the Government of Switzerland, the project aims to promote financial inclusion and expand access to financing for MSMEs in priority sectors through a value chain approach.
Banda Aceh has all the ingredients to become a world-class perfume city. Collaboration with the ILO is a tangible step in preparing the right ecosystem to achieve this vision.
Illiza Sa'aduddin Djamal, Mayor of Banda Aceh
Banda Aceh was selected as a strategic location for this collaborative program due to its significant and strategic patchouli potential. This potential plays an important role in supporting downstream processing and increasing added value through the Perfume City initiative.
© Hotli Simanjuntak/ILO
The collaborative programme focuses on strengthening the patchouli value chain, from enhancing the capacity of business actors and developing higher value-added derivative products to expanding market access. These efforts also address key challenges faced by MSMEs, such as limited financing, market access, business capacity and digitalization.
The programme includes three main focus areas: 1) Enhancing MSME capacity and skills through training in entrepreneurship, business management, product development and quality standards; 2) Developing patchouli-based derivative products and expanding access to both domestic and international markets; and 3) Strengthening coordination among stakeholders, including local government, MSMEs, academia and the private sector.
The Mayor of Banda Aceh, Illiza Sa'aduddin Djamal, welcomed the partnership as a concrete step toward realizing Banda Aceh's vision as a globally competitive Perfume City. "Banda Aceh has all the ingredients to become a world-class perfume city. Collaboration with the ILO is a tangible step in preparing the right ecosystem to achieve this vision," she said.
This collaboration ensures that MSMEs, including patchouli entrepreneurs, have greater and better access to financing, markets and capacity building. It further strengthens our efforts to build an inclusive, productive value chain ecosystem capable of creating decent jobs.
Simrin Singh, ILO Director for Indonesia and Timor-Leste
Meanwhile, Simrin Singh, ILO Director for Indonesia and Timor-Leste, reaffirmed the ILO's support in sustainably strengthening MSMEs in Banda Aceh. "This collaboration ensures that MSMEs, including patchouli entrepreneurs, have greater and better access to financing, markets and capacity building. It further strengthens our efforts to build an inclusive, productive value chain ecosystem capable of creating decent jobs," said Simrin.
The collaboration between the ILO and the Banda Aceh City Government is expected to create tangible impacts for local MSMEs, expand economic opportunities and position Banda Aceh as a model for sustainable and inclusive commodity-based economic development.
