Value Chain Analysis of the Marine Ornamental Reef: A Case Study in Banyuwangi, East Java, Indonesia

Abstract

Coral is the main component of coral reefs and forms an ecosystem that is home to approximately 93 000 species of marine biota. In their development, corals are traded and become decorations in aquariums because of their beauty. Currently, in Indonesia, the trade in ornamental corals is still on an export scale, including hard coral species, which are strictly monitored because some are included in the Convention on International Trade in Endangered Species of Wild Fauna and Flora Appendix II. This research aimed to analyze the ornamental coral value chain at an ornamental coral company in Banyuwangi related to value-added activities, governance, and profit margins to see economic and environmental sustainability using the Porter value chain. The results showed that the primary activities that still needed to be more optimal were operational activities and outbound logistics, environmental factors (weather conditions), and improper handling causing coral death or damage (wounds). Meanwhile, the secondary activities that could have been more optimal are infrastructure and technology development. The profit margin obtained by the company was 97 523.53 US dollars with a value of 45.16% of revenue, showing that the business is profitable. Therefore, infrastructure improvements and technology development are still needed for optimal results. Further research is recommended to be conducted in relation to business development strategies and improvement of coral quality and packaging processes. Additionally, in order to support better traceability and long-term business sustainability for corals, the dearth of historical data on the ornamental coral trade in Indonesia needs to be tackled.