Wed, 24 Jun 2009
Indonesia's coconut-based industries remain largely untapped and lag behind regional peers due to lack of development in the sector, despite Indonesia being one of the world's largest growers of coconut palms, an association says.

The government's lack of support certainly does not help, according to the Indonesian Coconut Forum (FOKPI) - a grouping of companies that purchases coconuts and its derivatives.

"My group has been asking the Agriculture Ministry to make policies that encourage growth in the coconut-based industry for the last 10 years. However, until now, there have been no policies supporting the industry," Poppy Dharsono, FOKPI chairwoman, said Tuesday.

She said support could come in the form of tax incentives or assistance, such as training for farmers and the provision of research funds to develop products derived from coconuts.

According to data from the FOKPI's, 3.8 million hectares of land is used for coconut plantations in Indonesia, while the plantations are divided between 4 million farmers and produce an average of 16 billion coconuts per year.

However, up until to now, the coconuts are under utilized as only limited derivatives are made from the fruit. Poppy said the Philippines, which has fewer coconut plantations than Indonesia, is currently the world's largest coconut-based products exporter having developed about 200 coconut derivatives.

The derivatives become key raw materials for various products ranging from the popular virgin coconut oil (VCO), cooking oil, body lotion, anti-mosquito cream, soaps, cosmetics and medicine.

In light of this, the FOKPI signed an agreement with the Indonesian Institute of Science (LIPI) on Monday, which allows the research agency to conduct several pilot projects designed to diversify coconut-based products.

"The added value of coconut-based products is very high, which means high profit margins," said Bambang W. Koesoema, an FOKPI member.

Last year, Bambang said his company secured about US$ 8 million for exporting coconut shells as material for various craft products. "Coconut's shells are basically worthless in many places in the country, yet they contribute significantly to my company," said Bambang.

Romulo N. Arancon, executive director of the Asian and Pacific Coconut Community, who attended the agreement's signing ceremony, said that Indonesia had a long way to go before it caught up to the Philippines, but said the agreement was still a good start.

Coconut-based exports in the Philippines are valued at $800 million to $1 billion each year, said Romulo.

Other than offering financial gain, Poppy said the coconut industry was more environmentally friendly in comparison to industries such as the palm oil industry, which the government has focused on developing.

"Coconut trees planted along the coast could prevent erosion. Also, unlike oil palm trees, coconut plantations can be diversified by other commodities such as corn," she said.

Indonesia is currently the largest producer of crude palm oil (CPO) in the world. (mrs)



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