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INDONESIAS PALM OIL OUTLOOK

2011-2020

Suhardiyoto Haryadi

INDONESIAS PALM OIL OUTLOOK


2011-2020
TABLE OF CONTENTS
Edible Oil Market

Corporate Performance

Indonesias 20 Richest

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Rising Global Demand
4
Indonesias Production
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Indonesia Takes the Lead
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World Supply and Demand 7
World Trade
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Commodity Boom
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Indonesias MajorProducers
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Inonesia's Palm Oil Outlook 2011-2020

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12

Promising Global

Economy
Price Projection 2011-2020
Expansion Areas
Controversy and Solution
Conclusion: Sustainable
Palm Oil

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14
15
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EDIBLE OIL MARKET

Source: USDA

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RISING GLOBAL DEMAND

Indonesian Palm Oil Growth Critical to Global Edible Oil Supply


Source: USDA Commodity Intelligent Report, October 8, 2010

Inonesia's Palm Oil Outlook 2011-2020

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INDONESIAS PRODUCTION

Indonesias palm oil production has risen by 13.8 million tons


or 192%, while exports have increased 331% over the past 10
years, from 4.3 million tons to 18.4 million tons.
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INDONESIA TAKES THE LEAD

Inonesia's Palm Oil Outlook 2011-2020

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WORLD SUPPLY AND DEMAND


Palm Oil Production (000 MT)
COUNTRY

2006/07

2007/08

2008/09

Palm Oil Consumption (000 MT)

2009/10

COUNTRY

2007/08

2008/09

2009/10

Indonesia

16,730

18,880

20,450

22,090

India

3,698

4,882

6,565

6,800

Malaysia

15,294

17,567

17,259

18,200

China

Thailand

989

1,273

1,310

1,420

EU-27

5,461
4,478

5,660
4,806

5,917
5,592

6,348
6,000

752

812

853

880

Indonesia

Colombia

830

779

758

773

Malaysia

3,920
2,132

4,362
2,449

4,846
2,474

5,230
2,540

Ecuador

409

417

431

466

Pakistan

37,591

42,666

44,262

47,154

1,638
1,042
700

1,734
1,219
941

1,792
1,265
1,161

1,800
1,301
1,280

635
467

935
457

917
580

936
748

598
509

486
550

550
536

569
545

527
401
37,256

690
443
41,325

485
388
44,700

520
440
47,260

Nigeria

World

Nigeria
Thailand
US
Colombia
Egypt
Japan

Source:
Development Prospects Group
The World Bank, 30 December 2009

2006/07

Inonesia's Palm Oil Outlook 2011-2020

Russia
Turkey
World

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WORLD TRADE
Export (000 MT)
COUNTRY

Indonesia

2006/07

2007/08

Import (000 MT)

2008/09

2009/10

COUNTRY

2006/07

2007/08

2008/09

2009/10

12,465

14,100

16,110

16,840

China

5,543

5,559

6,297

6,200

13,768

15,041

15,990

16,180

India

3,664

5,019

6,875

6,550

PNG

406

385

451

422

EU-27

4,634

5,012

5,790

6,150

Ecuador

180

178

173

189

Pakistan

1,743

1,769

1,800

1,840

327

399

123

160

US

692

955

1,036

985

29,638

32,850

35,480

36,350

Bangladesh

871

855

832

850

Egypt

716

508

770

660

Iran

419

589

571

610

Japan

516

551

531

550

29,366

32,730

35,773

36,280

Malaysia

Thailand
World

World

Source: Development Prospects Group The World Bank, 30 December 2009


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COMMODITY BOOM
COMMODITY MAKET 1990-2010
A: Early 1990s Export Boom
B: Crisis and Recovery of 1997/98
C: Sluggish Exports
D: Commodity Boom
Total exports rose by 120%
Manufacture exports increased 75%
Commodity exports grew by 180%
Renewable commodity growth reflect
rapid increase in both volumes and
prices.
E: Global Crisis 2008/09
F: Current Recovery began in late 2009

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Export of goods (USD billion)


MANUFACTURE
10
COMMODITY
8
6
4

E
F

D
A

Commodity Export (USD billion)


F
RENEWABLE RESOURCES
7
NON-RENEWABLE RESOURCES
5
3

D
A

Source:
IMF Country Report No. 10/285
September 2010

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INDONESIAS MAJOR PRODUCERS


STATE-OWNED PLANTATIONS
Company

Planted Area
Ha

CPO Production
MT

PRIVATE PLANTATIONS
Company

Planted Area
Ha

CPO Production
MT

PTPN III

115,470

517,336 Golden Agri

427,253

1,913,654

PTPN V

114,644

439,445 Astra Agro

264,036

1,082,953

PTPN IV

128,582

365,081 Asian Agri 1)

160,000

1,000,000

PTPN II

86,827

236,000 Sime Darby 2)

204,237

782,219

PTPN XIII

79,535

213,774 Indofood Agri

307,153

763,000

PTPN VII

55,742

163,762 Sinar Mas

134,478

640,264

PTPN VI

45,916

124,888 First Resources

108,917

368,631

PTPN XIV

26,296

107,870

341,553

98,312

211,760

27,500 Lonsum

Source: Company Profiles, Annual Reports

Bakrie Sumatra

Note: All figures are of end 2009; 1) Pefindos estimate; 2) Indonesias operations.
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CORPORATE PERFORMANCE
Company

2007

2008

2009

Revenue

Profit1)

Revenue

Profit1)

Revenue

Wilmar Int. 2)

16,466

580

29,145

1,530

23,885

Golden Agri 2)

1,873

1,165

2,986

1,419

Sinar Mas 3)

8,080

989

16,094

Indo Agri 3)

6,506

994

Astra Agro 3)

5,961

Lonsum 3)

2010 3Q

Profit1)

Revenue

Profit1)

1,882

21,289

1,005

2,294

613

2,315

259

1,046

14,201

748

10,689

537

11,840

1,067

9,040

2,053

6,505

804

1,973

8,161

2,631

7,424

1,660

5,721

1,228

2,930

564

3,846

927

3,199

707

2,403

642

First Resources 3)

1,691

627

2,783

1,151

2,276

1,236

1,908

684

Bakrie Sumatra 3)

1,949

206

2,931

173

2,325

252

1,896

245

Notes: 1) Net Profit; 2) in USD million; 3) in IDR billion; Source: Companies Reports.
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INDONESIAS 20 RICHEST
Rank

Name

R. Budi & Michael Hartono

Net Worth
(USD mil)

Name

Rank

Net Worth
(USD mil)

11,000

11

Kiki Barki

1,700

Susilo Wonowidjojo

8,000

12

Eddy William Katuari

1,650

Eka Tjipta Widjaja

6,000

13

Edwin Soeryadjaya

1,600

Martua Sitorus

3,200

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Boenyamin Setiawan

1,500

Anthony Salim

3,000

15

Garibaldi Thohir

1,450

Sri Prakash Lohia

2,650

16

Sukanto Tanoto

1,400

Low Tuck Kwong

2,600

17

Theodore Rachmat

1,350

Peter Sondakh

2,400

18

Chairul Tanjung

1,250

Putera Sampoerna

2,300

19

Murdaya Poo

1,150

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Aburizal Bakrie

2,100

20

Ciliandra Fangiono

1,100

Most of the countrys wealthiest reap their fortune in the renewable resources
sector, notably palm oil. Source: Forbes Indonesia 3 December 2010.
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PROMISING GLOBAL ECONOMY


Real GDP Growth (%)
Country

2008

2009

World

1.7

-2.1

OECD

0.3

Brazil

2010
e

2011
f

2012
f

3.3

3.3

3.5

-3.4

2.2

2.3

2.6

5.1

-0.2

6.4

4.5

4.1

Russia

5.6

-7.9

4.5

4.8

4.7

India

5.1

7.7

8.2

8.7

8.2

China

9.6

8.7

9.5

8.5

8.2

Indonesia

6.0

4.5

5.9

6.2

6.3

Source:WB, Global Economic Outlook 2010

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PRICE PROJECTION 2011-2020


Monthly Prices ($/ton)

Annual Prices ($/ton)

1400

1000

1100

800

800

600

500

400

Constant 2000

200

200
Jan-00

Jan-02 Jan-04

Jan-06

Jan-08

Jan-10

Current (Malaysian)

1980 1985 1990 1995 2000 2005 2010 2015 2020

Palm oil prices are expected to average $660 per ton in 2010 and to be slightly higher in
2011. In real terms, however, the 2010-12 average is expected to be two thirds higher in
the early 2000s.
Source: Development Prospects Group The World Bank, 30 December 2009

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EXPANSION AREAS

Potential 24.5 million Ha

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CONTROVERSY AND SOLUTION


CONTROVERSY
Saturated fat content

PROPONENTS
Competitors from other
vegetable oil industry

SOLUTION
Joint campaign by government
and industry associations

Deforestation and
International interest groups High Conservation Value (HCV)
biodiversity degradation
assessment and management
Marginalization of local
population

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Local interest groups

Inonesia's Palm Oil Outlook 2011-2020

Social Impact Assessment and


CSR programs; and smallholder
(plasma) scheme

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SUSTAINABLE PALM OIL

TERIMA KASIH
suhardiyoto@gmail.com

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