Musim Mas Invests US$ 860 M, Permata Hijau Rp 2 T in Palm Oil

Musim Mas Group, a palm oil processing company, plans to invest US$ 860 million to build palm oil mills. This plan is in line with the development of the national palm oil industry from upstream to downstream. (IFT/DINUL MUBAROK)

BEKASI (IFT) - Musim Mas Group, a palm oil processing company, plans to invest US$ 860 million to build palm oil mills. This plan is in line with the development of the national palm oil industry from upstream to downstream.

Suhardi, General Manager of Musim Mas Group, said the company plans to build palm oil mills in the next three years in several provinces.

"We will build a processing factory for oleo chemicals, located in North Sumatra, Riau and Central Kalimantan," said Suhardi. West Sumatra and Java are also target locations.

Permata Hijau Group, another palm oil processing company, will invest Rp 2 trillion in the course of three years to build an integrated palm oil processing factory near the Port of Belawan, North Sumatra. The factory will have an area of five to six hectares. Jhonny Virgo, Director of Permata Hijau Group, said construction will begin in early 2012.

"Our investment will build an oleo chemical factory to produce fatty acids, edible oil refinery and packaging plant," said Jhonny. He said Permata Hijau Group's investment plan is a positive impact on the Minister of Finance Regulation No. 128 on Establishment of Export Goods Subject to Exit Customs and Exit Customs Tariff for Palm Oil Exports.
The investment will increase the company’s capacity to 170 thousand tons per year from the previous 120 thousand tons. Currently, palm oil raw material requirement is 500 thousand tons per year.

"We have 20 thousand hectares of land to supply palm oil raw materials," he said.

In 2010, Indonesia was the largest palm oil producer in the world, with 23.2 million tons of palm oil, or 43.6 percent of the world’s total palm oil production of 53.2 million tons. A total of 54.6 percent of the national production was exported in raw form.

Land Expansion

MS Hidayat, Minister of Industry, said the government is committed to developing the palm oil industry from upstream to downstream. The government plans to increase palm oil land to 9.1 million hectares in 2020, from the previous 8.1 million hectares.

Hidayat estimated the production in 2020 to reach 40 million-42 million tons, with 60 percent of total production to be processed into finished products. .

Alexius Darmadi, President Director of PT Sumi Asih Oleochemical Industry, said the world's production capacity of oleo chemical is 8 million tons per year, while there are 7 million tons per year demand.

"With the development of the upstream to downstream industry, we expect that the supply can be absorbed by the domestic market," he said.