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Ministry of Industry Republic of Indonesia

INDONESIAN PALM OIL DOWNSTREAM INDUSTRY


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INDONESIAN PALM OIL DOWNSTREAM INDUSTRY Original Text & Photograph By : InfoSAWIT Magazine

www.infosawit.com Komplek Bukit Permai, Jl. Anjasmoro G2 No. 1 Cibubur, Jakarta Timur - Indonesia

2 2011,

Ministry of Industry Republic of Indonesia PT. Mitra Media Nusantara

Copyright protected by laws Prohibited quote or reproduce all or part of the contents of this book without written permission publisher

TABLE OF CONTENTS
4 Greetings Ministry of Industry 7 Chapter I, Indonesian Oil Palm Plantation Industry a. Indonesia Oil Palm Plantations b. The Spread of Oil Palm Plantations c. Productivity d. Indonesian Palm Oil Production e. Palm Oil Mills f. CPO Exports per Country and Its Derivatives 11 Chapter II, Palm Oil Downstream Industry a. Refinery b. Oleochemicals c. Biodiesel 3 15 Chapter III, Industrial Area a. Sei Mangkei b. Dumai, Riau c. Maloy Chapter IV, 21 Government Support

Photo by: PT Astra Agro Lestari

MESSAGE OF MINISTER OF INDUSTRY OF THE REPUBLIC OF INDONESIA on INVESTMENT PROMOTION FOR NATIONAL PALM-OIL BASED INDUSTRY YEAR 2011
Indonesia is now the worlds largest Crude Palm Oil (CPO) producer with an estimated production of 20 million tons in 2010 and it will keep growing due to the expansion of oil palm plantation and land productivity improvement. From year to year, oil palm plantation area has increased by 11,8% with a total range of 8,1 million ha in 2010 and CPO production level has also increased by 12% per year in the last 10 years. However, it should be noted that the CPO exported is in raw form which means that the added value of production such as oleo food and oleo chemical is still enjoyed by other countries. With the vast potential availability of raw materials such as CPO and CKPO (Crude Palm Kernel Oil), Indonesia is very likely to be a key player in the CPO derivatives industry (oleo food and oleo chemical). The growth in oleo food and oleo chemical industry will be able to increase the national economic dynamics which leads to increase in peoples welfare. The effort to increase the CPO downstream industries is initiated by investment promotion so that it will draw Foreign Direct Investment for the development of the industry. The aim of the investment promotion itself is to promote the industry potential, filtering investment potential and expand the marketing network of Indonesian oil palm derivative products. This is very important in order to bring Indonesian CPO products to the international market network and increase foreign capital inflow to Indonesia. The Indonesian government has designed several programs concerning oil palm derivative industries to integrate the chain between the downstream and upstream industries which have the potential to increase the competitiveness of oleo food and oleo chemical industries in the global stage. Some clusters which are ready to be offered for potential investors are Sei Mangkei North Sumatera, Dumai and Kuala Enok Riau, and Maloy East Kalimantan. In the future, the location of oil palm derivative industries will expand to West Kalimantan, Central Kalimantan and Papua. I welcome and support the 2011 National Oil Palm Industry Promotion Event. With this event, I hope that Indonesian CPO products will be more well-known internationally so that in the future we can expect more investments dedicated to the development of oleo food and oleo chemical products. I hope that this event will bring out valuable contribution to the development of palm oil based industries in Indonesia. MINISTER OF INDUSTRY

MOHAMAD S HIDAYAT

Photo by: PT Sampoerna Agro Tbk.

CHAPTER I INDONESIAN OIL PALM PLANTATION INDUSTRY


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A. INDONESIA OIL PALM PLANTATIONS

Oil palm plantation from year to year increase, was recorded in 2009, the Indonesian oil palm plantation area reached 7.9 million ha with an average annual growth of 11.8%. In 2010, oil palm plantation area in the prediction of 8,1 million ha, which an ownership composition of 43% of farmers, country states 8,5% and the remaining 48,5% large private estates.
Source : Ministry of Agriculture Republic of Indonesia, Gapki, InfoSAWIT Data Center, 2011.

Indonesian Oil Palm Plantation Area

Explanation

2000 4,158,079

2001 4,713,435

2002 5,067,058

2003 5,283,557

2004 5,284,723

2005 5,453,817

2006 6,594,914

2007 6,766,836

2008 7,008,000

2009 7,900,000

2010* 8,100,000

Wide Area (ha)


*) Gapki Prediction

B. THE SPREAD OF OIL PALM PLANTATIONS


At the beginning of its development, many cultivated oil palm plantations in Sumatra, in particular North Sumatra. In 2011, even a century present commercial oil palm plantations in Indonesia. The development also no longer focused on the island of Sumatra but to the island of Kalimantan, Sulawesi, and Papua.
Source : Ministry of Agriculture Republic of Indonesia, Ministry of Forestry Republic of Indonesia, InfoSAWIT Data Center, 2010. Riau Plantations: 1,623,458 Ha CPO: 5,072,834 Ton West Kalimantan : Plantations: 476,891 Ha CPO: 1,140,639 Ton East Kalimantan : Plantations: 368,504 Ha CPO: 370,671 Ton South Sulawesi : Plantations: 133,493 Ha CPO: 429,388 Ton

Nangroe Aceh Darussalam : Plantations: 274,135 Ha CPO: 709,021 Ton

Jambi : Plantations: 454,771 Ha CPO: 898,640 Ton North Sumatera : Plantations: 1,026,644 Ha CPO: 3,200,673 Ton

West Papua : Plantations: 33,646 Ha CPO: 80,328 Ton

West Sumatera : Plantations: 305,871 Ha CPO: 839,640 Ton Papua : Plantations: 25,926 Ha CPO: 56,738 Ton

South Sumatera : Plantations: 718,068 Ha CPO: 1,829,609 Ton

Central Kalimantan : Plantations: 709,206 Ha CPO: 1,352,934 Ton

Photo by: PT Astra Agro Lestari

C. PRODUCTIVITY

Productivity of Indonesian CPO reached an average of 3 tons/ha/year, quite stable in 2009. Currently the government is working to improve the productivity of Indonesian CPO by applying best management practice in oil palm plantations, in addition to continue to produce oil seeds.
Indicator Productivity Unit Kg/Ha 2000 2,78 2001 2,84 2002 2,91 2003 3,05 2004 2,83 2005 2,93 2006 3,50 2007 2,99 2008 2,74 2009 2,94 2010* 2,98

Source : Ministry of Agriculture Republic of Indonesia, Gapki, InfoSAWIT Data Center, 2011.

*) Prediction

Indonesias CPO production during the last ten years continues to increase with growth of about 12% each years.
Source : Ministry of Agriculture Republic of Indonesia, InfoSAWIT Data Center, 2010.

D. INDONESIAN PALM OIL PRODUCTION

Indonesian CPO Production 2000 2010

*) Prediction

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E. INDONESIAN PALM OIL MILLS


Palm oil mill (POM) is one of the production supply chain in the palm oil industry which serves as a post processing of fresh fruit bunches (FFB) oil into crude palm oil (CPO). Until now POM in Indonesia noted there are about 608 units with a capacity of total production reaches 34,280 tons FFB/ hour, spread over 22 provinces.
Sources: Director General of The Agro Industry, Ministry of Agriculture Republic of Indonesia, 2010.

Distribution of Indonesian Palm Oil Mills


No. 1. NAD 2. North Sumatra 3. West Sumatera 4. Riau 5. Riau Islands 6. Jambi 7. East Sumatera 8. Bangka Belitung 9. Bengkulu 10. Lampung 11. West Java 12. Banten 13. West Kalimantan 14. Central Kalimantan 15. South Kalimantan 16. East Kalimantan 17. Central Sulawesi 18. South Sulawesi 19. West Sulawesi 20. Southeast Sulawesi 21. Papua 22. West Papua Indonesia Province Amount of Palm Oil Processing Industry 25 92 26 140 1 42 58 16 19 10 1 1 65 43 15 29 7 2 6 3 3 4 608 Production Capacity (ton/ ffb/hour) 980 3,815 1,645 6.660 40 2,245 3,555 1,235 990 375 30 60 5,475 3,100 770 1,545 590 150 260 260 140 360 34,280

Photo by: PT Astra Agro Lestari

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F. EXPORTS OF CPO AND ITS DERIVATIVES


Total export of Indonesia CPO and derivatives in 2010 : 15.656.350 ton
Souces : GAPKI , 2010.

5,500,000 5,000,000 4,500.000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Bangladesh China European Union India Pakistan USA Others

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CHAPTER II PALM OIL DOWNSTREAM INDUSTRY

Policy Development of Palm Oil Downstream Industry


Potential of palm oil as raw material for downstream industries is required, to produce products with safe and environmentally friendly benefits when consumed. Government through the Ministry of Industry issued a policy for the development of downstream palm oil industry following : 1. Palm Oil Downstream Industry plays an important role in the national economy, especially as foreign exchange, create employment and basic needs providers community. 2. Since 2006, Indonesia has become a producer of crude palm oil (CPO), which is a combination of CPO and CPKO, the largest in the world with total CPO production of 16 million tons, while Malaysia is only about 14,9 million tons. In 2008, the national CPO production reached 18,8 million tons, while Malaysia amounted to 17,7 million tons. In 2009, Indonesias CPO production reached 20,2 million tons and is predicted in 2020 will reach 40 million tons. 3. Based on Presidential Regulation No.28 of 2008,abour of National Industrial Policy, palm oil processing industry (derivative CPO) is one of the priorities to be developed and have higher added value, such as industry of oleofood, oleochemical, energy and pharmaceutical. 4. In Regulation of Industrial Ministry No. 111/M-IND/PER/10/2009 about the Guide Map (Road Map) Development of Palm Oil Industry Cluster, said that development of palm oil downstream industry cluster medium term (2010-2014) will focus on North Sumatra, Riau and long-term will be integrated in East Kalimantan, West Kalimantan, South Kalimantan and Papua. 5. Basic strategy development IHKS by encouraging the processing of crude palm oil (CPO) until the third product derivatives (among others metalic salt, fatty amine, fatty alcohol, fatty amide) in this country, at least 50% of the total national production of CPO prior to export in 2015.

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TREE DOWNSTREAM PALM OIL INDUSTRY


CRUDE PALM OIL (CPO)

FRESH FRUIT BUNCH (FFB)


PALM KERNEL OIL (PKO)

OLEIN

AMINO ACID

PFAD

Vit. A,E

CAROTEN

SINGLE CELL PROTEIN MARGARINE

STEARIN

TROGLYSERIDA, DIGLYSERIDA, MONOGLYSERIDA

ICE CREAM

LIPASE

SOAP CHIP

FATTY ACID

COOKING OIL

SALAD OIL

SHORTENING

METIL ESTER

WASH SOAP

METIL ESTER BIODIESEL

FAT POWDER

COCOA BUTTER SUBSTITUTE (CBS) CONFECTIONERIES

COSMETICS SHORTENING SOAP VEGETABLE GHEE VANASPATI COCOA BUTTER SUBSTITUTE (CBS)

SURFACTAN

ESTER ASAM LEMAK: PALMITAT/PROPAND STEARAT METIL ESTER SULFONAT OLEAT/GLYCOL PROPYLENE GLYCOL

METALIC SALT: OLEAT / Ba PALMITAT STEARAT / Ca, Zn STEARAT / Ca, Mg STEARAT / Al, Li OLEAT / Zn, Pb

POLYETHOXYLATE DERIVATIVES: PALMITAT/ETHYLENE PROPYLENE OXIDE STEARAT/ETHYLENE PROPYLENE OXIDE OLEIC ACID DIMER ETHYLENE PROPYLENE OXIDE

FATTY AMINES : SECONDARY C16 & C18 / ETHOXYLATED BETAIN C16 & C16 / ETHOXYLATED

OXYGENATED FATTY ACID / ESTER : EPOXY STEARIC / OCTANOL ESTER EPTHIO STEARIN MONO & POLYHYDRIC ALCOHOL ESTER

FATTY ALCOHOL C16 & C18 ALCOHOL / SULPHATED C16 & C18 ALCOHOL / ESTERIFIED WITH HIGHER SATURATED FATTY ACID C16 & C16 ALCOHOL / ETHOXYLATION MONOGLISERIDA ETHOXYLATION

FATTY ACID AMIDES : STEARAMIDE ALKANOLAMIDES SULPHATED ALCANOLAMIDE OF PALMITAT, STAERIC & OLEIC ACIDS OLEAMIDE

GLICEROL

FOOD EMILSIFIER

COLOR INFORMATION ALREADY PRODUCED IN INDONESIA NOT YET PRODUCED IN INDONESIA

Source: Ministry of Industri Republic of Indonesia, 2011.

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B. OLEOCHEMICAL
Photo by: PT Smart Tbk.

A. REFINERIES

In addition to being the largest palm plantations in the world, Indonesia also continues to develop refined palm oil industry, one of whom oleochemical industry. Until recently, in Indonesia recorded nine basic oleochemicals manufacturer that produces fatty acids, fatty alcohols and glycerine. The installed capacity of fatty acids reach 986,000 tons/year, fatty alcohols reaching 490,000 tons/year, and glycerine to reach 141,700 tons/year.

Source: Central Statistical Agency, Ministry of Agriculture Republic of Indonesia, 2009.

Every year, cooking oil processed by refineries often requires raw materials of CPO around 4 until 5 million tons. Currently, Indonesia has 94 refineries spread across 19 provinces.
Item of Factories (Unit) 2 13 3 8 2 5 4 8 8 5 9 1 11 2 5 1 5 1 1 94

Sources : Apolin, 2010.

Manufacturers and capacity of oleochemical national industry


(in 1.000 ton)
No Company Fatty Acid 45 91 80 50 320 60 120 130 90 986 490 100 40 Fatty Alcohols 350 Glycerine 24 10 8 5,1 30 4,6 30 20 10 141,7

No 1 NAD

Province

1 PT Ecogreen (Medan & Batam) 2 PT Sumiasih, Bekasi 3 PT SOCI MAS, Medan 4 PT Flora Sawita Chemindo, Medan (Bakrie Group) 5 PT Musim Mas, Medan 6 PT Domba Mas, Kuala Tanjung (Bakrie Group) 7 Wilmar Group, Gresik 8 PT Nubika Jaya, Kisaran 9 PT Ciasadane Raya Chemical, Tangerang Total

2 North Sumatera 3 West Sumatera 4 Riau 5 Jambi 6 South Sumatera 7 Lampung 8 DKI Jakarta 9 West Java 10 Central Java 11 East Jawa 12 Banten 13 West Kalimantan 14 East Kalimantan 15 North Sulawesi 16 Central Sulawesi 17 South Sulawesi 18 Gorontalo 19 West Papua Total

Photo by: PT Musim Mas

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C.BIODIESEL

Fossil-based energy sources, are now experiencing environmental constraints and faced increasingly with the depletion of reserves, then the worlds find out for the alternative energy of fossil fuels, one of biodiesel from oil palm (fatty acid methyl esters). Facts palm biodiesel is significantly lower emissions than fossil oil. In Indonesia recorded there are about 20 manufacturers carrying palm biodiesel with a total installed capacity reached 3.07 million tons / year.

Source: Aprobi, 2011.

Producers and Capacity Indonesia Biodiesel


No Company Name 1 PT Alia Mada perkasa 2 PT Anugrah Inti Gemanusa 3 PT Bioenergi Pratama jaya 4 PT Cemerlang Energi Perkasa 5 PT Damai Sejahtera Sentosa Cooking 6 PT Darmex Biofuel 7 PT Energi Alternatif 8 PT Eternal Buana Chemical Industries 9 PT Eterindo Nusa Graha 10 PT Indo Biofuels Energy 11 PT Multikimia Intipelangi 12 Musim Mas Group 13 PT Pasadena Biofuels Mandiri 14 PT Pelita Agung Agrindustri 15 PT Petro Andalan Nusantara 16 PT Primanusa Palma Energi 17 PT Sintong Abadi 18 PT Sumi Asih 19 PT Wahana Abdi Tritatehnika Sejati Location Kosambi, Tangerang Gresik Regency of East Kutai Regency of Barau Dumai, Riau Rungkut, Surabaya Bekasi North Jakarta Cikupa, Tangerang Gresik Merak Bekasi Regency of Deli Serdang Batam Cikarang Bengkalis, Riau Dumai North Jakarta Regency of Asahan South Sumatra Bekasi Cileungsi, Bogor Dumai Capacity (ton/year) 11,000 40,000 6,000 60,000 400,000 120,000 150,000 7,000 40,000 40,000 60,000 14,000 70,000 350,000 10,240 200,000 150,000 24,000 35,000 100,000 132,200 1,050,000 3,069,440

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20 PT Wilmar Bio Energi Indonesia Total

CHAPTER III INDUSTRIAL AREA

In order to form a government of national industries to develop six economic corridors, including production centers, crops and granaries in the national energy corridor centered on Sumatra. While the production and processing of mining products focused on the corridor of Borneo. Then to the center of agricultural production and food processing, farming and fisheries enter the corridors of Sulawesi, North Maluku. Corridor of Java, Bali and Papua, each one for corridor industry supporters and national service, national tourism gateway and processing of natural resources. In order to smooth the distribution of the corridor system the government to develop industrial park to integrate between the upstream and downstream industries. Especially for developing region-based oleochemical industry, the government established thee strategic industrial area, namely Sei Mangkei in North Sumatra, Dumai in Riau and Maloy in East Kalimantan.
Sources : Ministry of Industry Republic of Indonesia, 2011

Summary Themes of The Economic Corridor Development Indonesia Centers of Production and Processing of Crops and Granaries

Central Production and Processing of Mining Products and Barns National Energy

Production Center and Food Processing for Agriculture, Plantation and the National Fisheries

Corridors of Sumatera

Corridors of Sulawesi - North Maluku

Corridors of Java Corridors of Bali and Nusa Tenggara


Booster of Industrial and National Services Gate-level tourism national and supporting the national food

Corridors of Papua and Maluku

Production and Processing of the Abundant Natural Resources and Human Resources Prosperous

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A. Industrial Cluster Sei Mangkei, North Sumatra


Industrial area Sei Mangkei is one of three industrial area oleochemicals-based that developed by Indonesia government. In the first phase built up area of 46 ha (2008-2010) was followed by a second phase covering an area of 104 ha (20102011). The third phase will be expanded to 640 ha for the period 2013-2018. Development area of Sei Mangkei has a total area reached 640 ha, with the support of the supply of raw materials, crude palm oil from Sei Mangkei around area. The distance between the plantation palm oil with industrial area of less than 70 km, so

making it easier in the process of distribution of raw materials. Until now POM in Sei Mangkei capable of producing until 569 tons of FFB/hour. While for the loading and unloading of CPO was centered in the Port of Kuala Tanjung as exports dock from industrial area Sei Mangkei. From 3 dock in that port, dock B and C are used as a place of delivery of the CPO. Recorded dock B has a length of 150 m, width 19 m and a depth of 6 M.LWS. Meanwhile, dock C has a length of 80 m, width 30 m and a depth of 11 M.LWS. Infrastructure currently has been built is the availability of water and electricity supply, road access to cluster industrial areas and near with the city.
Sources : PT Plantation Archipelago III, 2011.

Supporting Infrastructure Sei Mangkei


Country Roads - Highway Construction Kuala Namu to Tebing Tinggi (60 km) - Highway Construction Kuala Namu to Tebing Tinggi (60 km) Ministry of Public works, Provincial Government - Increase Internode Capacity Limapuluh to Indrapura to Ministry of Public Simpang Kuala Tanjung (25 km) Works - Development of Fly Over Simpang Kuala Tanjung Ministry of Public Works Province Road Increase Internode Capacity Limapuluh to Perdagangan (11 Provincial km) Government District Roads - Increase Internode Capa Simpang Mayang - Kec Bosar District Government Maligas (14 km) Trailer Roads Bandar Tinggi to Kuala Tanjung (23 km) Directorate General of Railways Funding PTPN III Seaport Kuala Tanjung Directorate General of Sea

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Road Infrastructure

Drainage

Development of oil palm biomassfired power capacity 2x3,5 MW


Photos by: PTPN III

DEVELOPMENT OF INDUSTRIAL AREAS SEI MANGKEI


New POM capacity of 45 tons FFB / hour

2013 - 2014
- industry based to other oleochemicals. - Develop oleochemical derivatives

2011 - 2012
Develop industry of Biodiesel, surfactant, betacarotene and fatty alcohol

2012 - 2013
Develop industry of Biodiesel, surfactant, beta-carotene and fatty alcohol

Development of palm kernel oil capacity of 400 tons / day

2009 - 2010
- Infrastructure Development . - Development of Oil Palm Mill Capacity 75 ton FFB/ hour .

2010 - 2011
- Build Two Biomassa Power Plant Each with Capacity. - 400 tpd kcp. - Build of Biogas Power Plant the capacity.

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B. INDUSTRIAL CLUSTER DUMAI, RIAU


Industrial cluster oil palm Dumai precisely located in the province of Riau, a good reason of industrial cluster oil palm built in this area because the area of Riau Province has recorded the largest contribution in the production of CPO in Indonesia. Recorded in 2009 production CPO Riau reach 5 million tons or 27% of the total production of Indonesias CPO. Province of Riau has a palm oil mill (POM) as many as 137 units, and there are 29 units that are non-gardens POM that accommodates farmers production. Total CPO production capacity of 5.852 ton/hour. Practical raw material is relatively abundance in Riau. Not only that local government is also supporting the oil palm industry cluster Dumai with preparing financing infrastructure such as road access. While the private sector is allowed to build industrial area with easy licensing and providing incentives.
Sources : Local Government of Riau, 2010.

Production Consumption, Exports and Imports CPO of Riau


Description CPO Production Local Consumption CPO Exports and Derivatives CPO import from other province share of import from other provinces of CPO production Riau
Source: Central Statistical Agency, SBRC

Period 2007 (ton) 5.119.269 723.901 5.574.966 1.179.597 23,04%

Broad, CPO Production Volume and Amount POM in Riau


No District Land Area 275.609 ha 148.879 ha 4.007 ha 24.930 ha 127.259 183.598 ha 177.905,5 ha 142.282 ha 114.582 ha 121.854 ha 291.475 ha Production Volume 907.424 ton 452.525 ton 8.505 ton 50.443 ton 223.625 ton 621.139 ton 611.279 ton 372.977 ton 365.615 ton 412. 980 ton 1.092.758 ton Palm Oil Mill (POM) 19 unit 20 unit 2 unit 3 unit 17 unit 15 unit 4 unit 7 unit 11 unit 34 unit

1 District Upstream Rokan 2 District Downstream Rokan 3 Pekanbaru 4 Dumai City 5 District Bengkalis

Plan of Development Oil Palm Industry Riau Province


State Ownwd Plantations/ Private Owned Plantations CPO Export Oil Palm Plantation Palm Oil Mill (POM) Potential Domestic Market Palm Oil Industry Export Market

6 District Siak 7 District Pelalawan 8 District Downstream Indragiri 9 District Upstream Indragiri 10 District Kuansing 11 District Kampar
Sources: Official Plantation of Riau, InfoSAWIT Data Center

Potential Land

Oil Palm Farmers

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Infrastructure Support

The local government has also allocated 5,000 ha industry, but currently only used 300 ha by private parties. Port of Dumai can stop off at the boat weighing 20-30 thousand DWU and loading and unloading of CPO reached 6 million tons/ year. While Dumai Port Industrial Area has a depth of 14 m and accommodate ships weighing 50 thousand DWT

Investment in Riau :

Has a strategic position on the path Malacca. Dumai area of security is relatively good condition. Located in the coastal areas with relatively high economic growth (8.65% per year). Hinterland oil palm plantations in Riau area, based on statistics plantation 2007, a total of 1.612.382 ha, crude palm oil production of 5.119.270 tons, is produced from 130 POM with a capacity of 5.645 tons of FFB /hour. Center of the largest oil producer in Indonesia. As the exit and entrance, toward the center of business in the region and international. Has four industrial estates, one of them is private industry area which operates with an area of 1.000 ha of land, equipped with supporting facilities and infrastructure. Availability of ports and infrastructure (road, telephone and water supply). There was an area of 5.084 ha a separate industry from residential area.

Dumai Regional Excellence

PT Sari Dumai Sejati (CPO Refeneri capacity 2.500 tons day) and PKO plant expansion and a Special Port (Pelsus) PT Semen Padang (Pelsus) PT Ketam Putih (Pelra & Warehouse) PT Indo BioFuels (Biodiesel Factory) PT Pacific Inter Link (CPO Refineries Stamp 3.000 ton/day) PT Berlian Laju Tankers Tbk (Port and Container) PT Dumai Refinery PT BKR (Expansion)

Target The Development Of Downstream Palm Oil Industrial Cluster In Dumai


Medium Term Increase further processing or diversification palm oil derivatives industry. For non-food mainly directed at the products : surfactants, biodiesel, lubricants, oils, and additives for fuels. For food : cooking oil, margarine, tocopherol, etc. Increase the supply raw materials of CPO/PKO for domestic industries. Expansion of export market of palm oil derivatives industry. Long Term Become the largest producer of refined palm oil in the world. Mastered the technology and business of palm oil derivative products.

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C. INDUSTRIAL CLUSTER MALOY, EAST KALIMANTAN


Maloy is located in the eastern province of Kalimantan East Kutai. Currently the Maloy area focused on the development of industrial zone and international port (KIPI). To support the infrastructure of, the government will be build the highway towards Maloy along 130 kilometres (Sangatta-Maloy) and needs of other road facilities on the surrounding is from SP 3 Maloy to the port of Maloy/Bay Machete.
Sources : Local Governments East Kalimantan, 2010.

Catalyst Activity
Revised PP 62 by adding palm oil downstream industries that have not entered the list of specific industries that have facilities Tax Allowance.

Indicator
1 Rules

Target
2011 - 2012

PIC
Ministry of Economic, Ministry of Industry, Indonesia Investment Coordinating Board Indonesia Investment Coordinating Board, Ministry of Economic Ministry of Economic, Ministry of Finance

Preparing Legal umbrella provision of Tax Holiday.

1 Rules

2011 - 2012

Infrastructure Infrastructure Needs


Maloy Port Medium of Support : Land Ports Port Building Equipment Aid Navigational Firefighting Facilities Equipment loading and Unloading Goods Field and Stacking Cross-Estuary Wahau Lubuk Tukung Maloy financed by investors from UAE

Volume
Land of 100 ha

Target
2011 2015

PIC
Ministry of Transportation, Indonesian Ports, Local Government

Restructuring Tax Exit of CPO and its derivatives.

1 Rules

2011 - 2012

Industrial Development Activity Indicator Target


2011 2015

Port

PIC
Ministry of Industry, PT Plantation Archipelago III, Indonesia Investment Coordinating Board Ministry of Industry

150 km

Railway

2012 2015

Ministry of Transportation, PT. KAI, Investment Coordinating Board, Local Government Ministry of Public Works, Local Government

Cooperation between Integration of CPO processing industry industry CPO and and its derivates its derivatives with industrial / institutional support / related Diversification of oleochemical products of high added value through increased R&D Increase guarantee of supply CPO to domestic industries Investment Promotion Increasing in new investment and expansion of new businesses based CPO Fulfillment of domestic needs Increased investment in Indonesia

Road

Balikpapan Samarinda Maloy (2010 2014, @84 km) Muara Wahau Sp Perdau Maloy (2010 2014, @39,4 km) Access Port Road (2013) PLTA Lubuk Ambacang PLTU Peranap/Cerenti PLTU Pekanbaru Electric Transmission Dumai Electric Transmission Tj. Buton Electric Transmission Kuala Enok Other infrastructure : - Source of clean water - Power plant - Dam and raw water transmission - Public facilities, school of oil palm.

420 km; 197 km; 10 km,

2011 2015

2011 2013

2011 2015

Power Plant

Ministry of Energy and Mineral Resources, State Electricity Company

2011 2013 2011 2015

Ministry of Industry, Ministry of Agriculture Ministry of Industry, Indonesia Investment Coordinating Board, Local Government Ministry of Industry, Indonesia Investment Coordinating Board, The Indonesian Institute of Sciences

1 Package

2011 2015

Others

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Local Government, Ministry of Energy and Mineral Resources, Ministry of Public Works, Ministry of National Education

Technology development process efficient and environmentally insightful

increasing the capacity of basic oleochemicals industry and its derivatives

2013 2015

CHAPTER IV GOVERNMENT SUPPORT


Government support to develope palm oil downstream industry in Indonesia, has issued a policy development of CPO processing industry through two schemes like the medium-term schemes (20102014) and long-term scheme (2015-2025).

Targets Development Industry Processing CPO Medium-Term (2010 -2014) Ensure availability of raw materials CPO is quality. Increase and optimization of industrial capacity utilization. Development industry cluster. Formation CPO processing industrial cluster and its derivatives in Sumut and Riau. Development of port facilities storage tank and infrastructure development. Creation climate of business and investment that is conducive. Increase inter cooperation and intercluster. Increase of institutional functions. Development of a pilot project of indigenous sources of technology and licensing products deep processing.

Targets Development Industry Processing CPO Long-Term (2015 -2025) Expand the development of downstream products. Formation center of Exellence oleochemical industry. Market Control. Stabilization of industry insightful environmental. Integration of the industry of refined palm oil in East Kalimantan, West Kalimantan, Central Kalimantan, and Papua.

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In order to achieve the plan of CPO processing industry development, the government has compiled the main points of the action plan, which consists of the principal medium-term action plan (2010-2014) and long-term plan the principal action (2015-2025), as follows :
The principals plan of medium-term action (2010-2014) Increasing productivity of crops with the procurement of quality seeds, fertilizers and plantation revitalization. Increase the quality of palm oil with the implementation GAP. Capital assistance to farmers. Increase human resource capacity. Increase the quality of infrastructure to improve industrial performance. Export controls by imposing PE/BK for CPO and its derivatives. Modernization of production technology and machinery. Ease of access to bank credit. Socialization to the industrial cluster development and institution. Supporting Industries Formation of cluster development cooperation forum. Cooperation between the industry of CPO and its derivatives with industria/institutional support/related : Integration of CPO processing industry and its derivatives. CPO industrial development towards industrial derived surfactants, lubricants, and biodiesel. Cooperation between higher education research institutions and industry. Increase product quality in accordance SNI. Develop industrial machinery equipment and to develop industry auxiliary materials. Improving the quality of human resources through the preparation and implementation of the oil palm industry SKKNI chemical based. Encouraging the role of financial institutions in the provision of credit services and capital with low interest. Encourage the role of institutions in marketing investment promotion. Infrastructure development. Increasing coordination and synergy of related agencies in setting policy. Incentive policies to support industrial development. Elimination of regulations that hamper industrial development. Formation the body of authority development of investment. The Principals plan of long-term action (2015-2025) Diversification of oleochemical product of high value-added. Product innovation and technology through improved R&D. Providing incentives for actors of R&D development of derivatives palm oil products. Strengthening linkages between small and medium-sized companies with large industries in the context of technology transfer. Encouraging market research activities (market research) in order to seek new orientation and target markets and high added value. Increase in the activities of industrial technological research and product engineering integrated chemical derivative of palm oil. Fulfillment in the domestic market and export market expansion. Provision of promotional and marketing facilities. Technology development process efficient and environmentally insightful. Application Management Impact handling of Safety, Security, Health and Environment (K3) in palm oil-based chemical industry.

In order to accelerate the development of downstream oil industry, the government will improve the supporting infrastructure elements such as the construction of port facilities and storage tanks (including in Papua and East Kalimantan), credit incentives for small farmers, and providing tax incentives for new investment during the first 3 years.
Sources : Ministry of Industry Republic of Indonesia, 2011

Element Supporting of Periodization Increasing Technology.


Medium-term (2010-2014) Long-term (2015-2025) The pilot project for the Mini Plant Upgrading industrial products (scale-up) of the original technology and biotechnology sources of technology, the license development of biomass. to downstream. Modification and development of autonomous technology through R&D.

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Investment Coordinating Board


BKPM is a government section, in order to realize a one-stop service for investment in Indonesia. Through the program of National Single Window for Investment (NSWi) and Information Service System and Electronic Licensing Investment (SPIPISE). The legal basis is the development of this NSWi : 1. The Law No.25 of 2007 about Capital Investment 2. RI Presidential Instruction No. 3 of 2006 about Investment Climate Improvement Policy Package. 3. RI Presidential Instruction No. 6 of 2007 about the Acceleration of Development of Real Sector and Empower of Micro, Small and Medium Enterprises. 4. RI Presidential Instruction No. 5 of 2008 about Focus Economic Program Year 2008-2009.

Regulation is the operationalization NSWi : 1. BKPM chief Regulation No.11 Year 2009 on the Procedures for Implementation, Development, and Reporting Services at the One Stop Capital Investment. 2. BKPM chief Regulation No.12 Year 2009 on Guidelines and Procedures for Investment Application. 3. BKPM chief Regulation No.13 Year 2009 on Guidelines and Procedures for Implementation of Investment Control. 4. BKPM chief Regulation No.14 Year 2009 on Information Service System and Licensing of Electronic Investment. Function of NSWi : NSWi serves as a liaison and facilitator for the stakeholders with respect to investments in Indonesia. Currently, the parties are connected and can utilize NSWi among others; investors (investors), public, central government agencies, Integrated Services One Team (PTSP), Section Promotion and Investment Co-operation and Investment Section Control Implementation.

SPIPISE has the following purposes : 1. Stimulating the creation of a conducive business climate for investment in Indonesia 2. Increased promotion of cooperation and investment services with the main partner countries. 3. Improving services, facilities, and advocacy related to investment in Indonesia. 4. Increasing the role of institutional investment and investment information system (SPIPISE). SPIPISE useful as : 1. Single submission of data & information. 2. Single and synchronous processing of data and information. 3. Single Decision-making for investment information & licensing process. 4. Ease of licensing process tracking. Process Flow Services : The flow process of information services and investment services in general are described in the following diagram:
Source : http://www.nswi.bkpm.go.id

STIMULATION
DIVISION OF INVESTMENT IMPLEMENTATION CONTROL

INVESTOR

Continuing the roll out to an area covering 70% of the total investment value in Indonesia, Includes all permissions in all business sectors in Indonesia

PUBLIC

2
Pilot project: BATAM & CENTER for the type of permit and non permit investments that are served by Center of BKPM.

PHASE 3

PROMOTION

WHY NSWi?

SERVICES

PHASE 2

NSWI

PROMTION SECTION & COOPERATION INVESTMENT

CENTRAL GOVERNMENT

PHASE 1

Roll out to a potential area that covers 30% of the total investment value in Indonesia, covering the entire license in 4 main sectors: (1) manufacturing, (2) trade, (3) plantation, (4) construction

COLLABORATION
PTSP CENTRAL / PROVINCIAL / DISTRICT / CITY

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Ministry of Industry Republic of Indonesia


http://agro.kemenperin.go.id Jalan Gatot Subroto Kav. 52-53, Jakarta 12950

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