Digital Innovation Helps Aceh’s Patchouli Industry Strengthen Global Market Reach

To assess results and reinforce collaboration, representatives of SECO’s Private Sector Development Division, accompanied by the ILO team, visited Aceh on 24–25 January.

The distinctive scent of patchouli has long been tied to Aceh’s economic identity. Now, through strengthened partnerships, digital tools and improved access to finance, the province is working to secure a stronger position in global markets while creating more opportunities for local farmers and rural communities.

Over the past three years, the International Labour Organization (ILO), through its Promise II Impact project, has supported the development of Aceh’s patchouli value chain with backing from the Swiss State Secretariat for Economic Affairs (SECO). The initiative focuses on expanding SME access to financial services, improving production transparency, and promoting decent work across the sector.

SECO Delegation Reviews Progress in Aceh

To assess results and reinforce collaboration, representatives of SECO’s Private Sector Development Division, accompanied by the ILO team, visited Aceh on 24–25 January.

The visit highlighted the growing role of digitalisation in improving productivity, traceability and financing opportunities for patchouli enterprises and farmers.

“This programme helps enterprises improve productivity, transparency, and decision-making, while promoting decent work and local economic growth,” the ILO said.

Syiah Kuala University Driving Research and Community Empowerment

The visit began at Syiah Kuala University (USK), where SECO and the ILO met with the university’s Atsiri Research Center (ARC), provincial and local government officials, academics and private sector partners.

Discussions centred on strengthening Aceh’s patchouli ecosystem through the use of:

• Digital production data systems

• Enterprise Resource Planning (ERP) tools

• Improved business processes across the value chain

These innovations are helping businesses enhance operational efficiency, improve quality assurance, and increase eligibility for financing.

“The collaboration with the ILO and SECO has reinforced USK’s role as a socio-entrepreneurial university that connects research, innovation, and community empowerment,” said Prof. Dr. Ir. Marwan, Rector of USK.

Supporting Aceh’s Rural Economy and Value Addition

Provincial government representatives noted that the project aligns with Aceh’s medium-term development priorities, particularly in downstream processing and the creative economy.

Strengthening local value addition, they said, is essential for:

• Increasing household incomes

• Expanding rural employment opportunities

• Keeping more economic benefits within the province

Farmers Showcase MyNilam App in Lhoong Village

The delegation travelled to Lhoong village, where patchouli farmers demonstrated the MyNilam application, a digital platform linking farm-level production data with business operations.

By integrating cultivation and supply chain information, MyNilam helps:

• Improve efficiency and planning

• Strengthen traceability for export markets

• Facilitate access to financing

• Meet international quality requirements

The field visit showed how digital innovation is taking shape at the community level, connecting smallholders directly to modern market systems.

Challenges Remain: Knowledge Sharing and Local Processing Capacity

Despite progress, key challenges persist. ARC Head Syaifullah Muhammad stressed the importance of scaling up shared knowledge among farmers to ensure consistent, high-quality oil production.

He also pointed to the significant price gap between crude patchouli oil and higher-value refined products often processed outside Aceh.

“If we can strengthen shared knowledge and local processing capacity, at least 20 per cent of crude patchouli oil could be processed locally, increasing value for Acehnese communities,” he said.

Digitalisation Must Translate Into Real Benefits

The ILO said sustained investment in farmer upskilling, market linkages and technology adoption will be essential to ensure digital transformation delivers tangible gains.

“Through this project, the ILO is working with partners to ensure that digitalization translates into real benefits for farmers,” said Djauhari Sitorus, Promise II Impact Project Manager.

“It means better productivity, stronger market access, and more decent work opportunities.”

SECO Praises Local Commitment

Christian Brändli, head of SECO’s Private Sector Development, expressed appreciation for the strong leadership shown by Aceh’s institutions and communities.

“We would like to thank Syiah Kuala University and the provincial and local government authorities for their determination and leadership in implementing this project,” he said.

“Their commitment is essential to ensuring that digital innovation and improved access to finance deliver tangible benefits for farmers and enterprises.”

Building a More Resilient and Inclusive Patchouli Sector

The SECO visit reaffirmed that strong partnerships, innovation and local ownership are central to building a more sustainable and inclusive patchouli industry in Aceh — one that can compete globally while improving livelihoods at home.