Thu, 03 Dec 2009
From: The Jakarta Post
By Riyadi Suparno and Nani Afrida , The Jakarta Post , Nusa Dua, Bali
Indonesia, now the world’s number one crude palm oil (CPO) producer, wants to become number one in the palm oil downstream sector with a number of government incentives currently being deliberated to boost the downstream sector.

Coordinating Minister for Economy Hatta Radjasa said on Wednesday that a government regulation was being prepared to provide the basis whereby the government could provide incentives to investors financing the downstream sector of the palm oil industry.

“Our palm oil industry has been growing steadily in the upstream sector, now making us the world’s number one palm oil producer,” Hatta Radjasa said, while opening the 5th Indonesian Palm Oil Conference in Nusa Dua on Wednesday.

“But we need to deepen the growth of the industry into the downstream sector to provide more employment. With the development into the downstream sector, we would be a giant not only in the upstream sector but also in the downstream sector,” he said.

Hatta identified three locations that would serve as industrial estates for the development of the palm oil downstream industry. They are Kuala Enok in Indragiri Hilir regency in Riau, Maloy in East Kutai regency in East Kalimantan and Sei Mangke in Simalungun regency, North Sumatra.

“The incentives would be given to industries operating in designated economic zones. We cannot yet reveal what they would be. We are still in discussion,” Hatta said.

He added a number of foreign investors had expressed interest in investing in the palm oil downstream industry. They include potential investors from Japan.

Palm oil is one of Indonesia’s boom sectors. The country, with 7.9 million hectares of oil palm plantations, produces 19.2 million tons of palm oil per year, much of which is exported to many countries, generating total revenue of US$12.4 billion in foreign exchange.

State-owned Bank Mandiri Corporate Banking Director Riswinandi said that palm oil was indeed an attractive sector for banks to finance, and deepening the sector into the downstream was a good idea considering the many challenges in the export markets, especially in Europe which is imposing stricter environmental standards on imports.

Bank Mandiri, the country’s biggest bank by assets, allocates 15 percent of its total credit to the palm oil sector. As of last October, the bank had disbursed Rp 35 trillion (US$3.7 billion) to the sector, or 16 percent more than the year before.

“This business is in a good shape this year and it is not [negatively]influenced by the global economic crisis,” Riswinandi said.

Meanwhile, Joko Supriyono, secretary-general of the Indonesian Palm Oil Association (GAPKI), cautioned the government over its decision to deepen the sector into the downstream, saying this could create more problems for the upstream sector.

Joko pointed to the domestic cooking oil industry, which eventually could burden the upstream sector with export tax. “As long as it would not burden the upstream sector, it should be welcomed,” he said.

To be successful in developing the downstream sector, Joko noted that there must be enough demand for the downstream products, enough infrastructure to support the industry and enough capacity and competence from business players.

The downstream products from palm oil include cooking oil, fatty acids as well as materials used for soap products, lubricants and more recently biofuels for internal combustion engines.

Joko warned that some downstream product markets are very much controlled by multinational companies, and it would be difficult to break into them.

On supporting infrastructure, Joko said that government had better prepare infrastructure properly first before inviting investors.

Joko pointed out for example that out of an initial 11 biofuel producers, only two now survived because there had not been enough infrastructure in place, including the required regulatory frameworks, to support the biofuel industry.

“To be frank, our competence for now is still in the upstream sector,” he said.



News Search/Filter
Transaction Rates
24 May 18
Buy
Sell
AED1
3,860.83
3,860.83
AFN1
197.92
197.92
ALL1
130.76
130.76
AMD1
29.40
29.40
ANG1
7,897.24
7,897.24
AOA1
60.76
60.76
ARS1
579.47
579.47
AUD1
10,729.17
10,729.17
AWG1
7,924.67
7,924.67
AZN1
8,329.64
8,329.64
BAM1
8,490.05
8,490.05
BBD1
7,090.61
7,090.61
BDT1
167.56
167.56
BGN1
8,494.32
8,494.32
BHD1
37,561.58
37,561.58
BIF1
7.92
7.92
BMD1
14,181.22
14,181.22
BND1
10,539.00
10,539.00
BOB1
2,051.47
2,051.47
BRL1
3,909.81
3,909.81
BSD1
14,181.22
14,181.22
BTC1
107,836,031
107,836,031
BTN1
208.43
208.43
BWP1
1,421.05
1,421.05
BYN1
7,085.83
7,085.83
BZD1
7,052.60
7,052.60
CAD1
11,046.37
11,046.37
CDF1
8.77
8.77
CHF1
14,262.52
14,262.52
CLF1
622,803.08
622,803.08
CLP1
22.76
22.76
CNH1
2,224.80
2,224.80
CNY1
2,219.77
2,219.77
COP1
5.03
5.03
CRC1
25.08
25.08
CUC1
14,181.22
14,181.22
CUP1
556.12
556.12
CVE1
151.13
151.13
CZK1
644.61
644.61
DJF1
79.69
79.69
DKK1
2,229.06
2,229.06
DOP1
286.75
286.75
DZD1
121.77
121.77
EGP1
791.69
791.69
ERN1
939.32
939.32
ETB1
515.68
515.68
EUR1
16,605.35
16,605.35
FJD1
6,822.51
6,822.51
FKP1
18,958.88
18,958.88
GBP1
18,958.88
18,958.88
GEL1
5,796.68
5,796.68
GGP1
18,958.88
18,958.88
GHS1
3,046.45
3,046.45
GIP1
18,958.88
18,958.88
GMD1
300.67
300.67
GNF1
1.57
1.57
GTQ1
1,901.48
1,901.48
GYD1
68.53
68.53
HKD1
1,806.99
1,806.99
HNL1
594.37
594.37
HRK1
2,245.92
2,245.92
HTG1
220.10
220.10
HUF1
52.13
52.13
IDR1
1.00
1.00
ILS1
3,969.44
3,969.44
IMP1
18,958.88
18,958.88
INR1
207.57
207.57
IQD1
11.93
11.93
IRR1
0.33
0.33
ISK1
134.08
134.08
JEP1
18,958.88
18,958.88
JMD1
112.39
112.39
JOD1
19,987.54
19,987.54
JPY1
129.06
129.06
KES1
140.51
140.51
KGS1
207.47
207.47
KHR1
3.48
3.48
KMF1
33.71
33.71
KPW1
15.75
15.75
KRW1
13.18
13.18
KWD1
46,975.59
46,975.59
KYD1
17,010.35
17,010.35
KZT1
43.45
43.45
LAK1
1.69
1.69
LBP1
9.28
9.28
LKR1
89.83
89.83
LRD1
103.44
103.44
LSL1
1,128.18
1,128.18
LYD1
10,427.37
10,427.37
MAD1
1,496.22
1,496.22
MDL1
844.98
844.98
MGA1
4.35
4.35
MKD1
269.73
269.73
MMK1
10.45
10.45
MNT1
5.90
5.90
MOP1
1,753.35
1,753.35
MRO1
39.83
39.83
MRU1
396.89
396.89
MUR1
411.13
411.13
MVR1
914.91
914.91
MWK1
19.69
19.69
MXN1
722.01
722.01
MYR1
3,564.46
3,564.46
MZN1
234.02
234.02
NAD1
1,119.71
1,119.71
NGN1
39.33
39.33
NIO1
451.91
451.91
NOK1
1,754.85
1,754.85
NPR1
130.28
130.28
NZD1
9,820.49
9,820.49
OMR1
36,848.71
36,848.71
PAB1
14,181.22
14,181.22
PEN1
4,332.24
4,332.24
PGK1
4,342.27
4,342.27
PHP1
270.04
270.04
PKR1
122.67
122.67
PLN1
3,859.93
3,859.93
PYG1
2.51
2.51
QAR1
3,894.35
3,894.35
RON1
3,589.26
3,589.26
RSD1
140.60
140.60
RUB1
231.26
231.26
RWF1
16.48
16.48
SAR1
3,781.60
3,781.60
SBD1
1,807.82
1,807.82
SCR1
1,027.71
1,027.71
SDG1
787.84
787.84
SEK1
1,620.92
1,620.92
SGD1
10,561.51
10,561.51
SHP1
18,958.88
18,958.88
SLL1
1.81
1.81
SOS1
24.79
24.79
SRD1
1,898.93
1,898.93
SSP1
108.86
108.86
STD1
0.68
0.68
STN1
679.17
679.17
SVC1
1,620.07
1,620.07
SYP1
27.53
27.53
SZL1
1,126.38
1,126.38
THB1
442.08
442.08
TJS1
1,577.72
1,577.72
TMT1
4,051.79
4,051.79
TND1
5,584.72
5,584.72
TOP1
6,179.78
6,179.78
TRY1
3,098.80
3,098.80
TTD1
2,103.21
2,103.21
TWD1
473.82
473.82
TZS1
6.21
6.21
UAH1
543.47
543.47
UGX1
3.79
3.79
USD1
14,181.22
14,181.22
UYU1
453.40
453.40
UZS1
1.76
1.76
VEF1
0.17
0.17
VND1
0.62
0.62
VUV1
132.56
132.56
WST1
5,512.86
5,512.86
XAF1
25.31
25.31
XAG1
233,635.15
233,635.15
XAU1
18,366,133.36
18,366,133.36
XCD1
5,247.35
5,247.35
XDR1
20,109.16
20,109.16
XOF1
25.31
25.31
XPD1
13,975,369.03
13,975,369.03
XPF1
139.15
139.15
XPT1
12,833,688.88
12,833,688.88
YER1
56.63
56.63
ZAR1
1,138.26
1,138.26
ZMW1
1,381.61
1,381.61
ZWL1
43.99
43.99
Taxation Exchange Rates
31 Aug 16 - 06 Sep 16
USD 1
13,232.00
AUD 1
10,043.30
CAD 1
10,213.70
DKK 1
1,999.40
HKD 1
1,706.22
MYR 1
3,283.28
NZD 1
9,623.63
NOK 1
1,605.23
GBP 1
17,433.70
SGD 1
9,757.68
SEK 1
1,569.45
CHF 1
13,631.10
JPY 100
13,101.00
MMK 1
11.01
INR 1
197.29
KWD 1
43,920.70
PKR 1
126.23
PHP 1
285.00
SAR 1
3,528.53
LKR 1
91.12
THB 1
382.08
BND 1
9,756.53
EUR 1
14,885.50
CNY 1
1,987.61

Okusi Associates: Indonesian Business & Management Services