156 firms interested in developing plantations

156 firms interested in developing plantations

JAKARTA (JP): The government has as of December received 156
applications from companies for licenses to open plantations in
18 provinces, mostly in East Kalimantan and North Sumatra.

Data from the Directorate General of Plantations showed that
the applications were made based on the Decree of the Minister of
Forestry and Plantations No. 107 in March 1999, which sets limits
on the acreage to be developed as plantations by investors.

The ruling stipulates that acreage developed by a company in
one province is limited to 20,000 hectares, except for sugarcane
estates, which can cover up to 60,000 hectares. The decree also
rules that a company can, however, develop up to 100,000 hectares
throughout the country.

Antara quoted the directorate general as stating that only 41
of the applications fulfilled the requirements, and out of this
number, 21 were issued licenses.

Based on the decree, plantations can be developed under five
models of ventures.

Under the first model, smallholders set up a cooperative to
develop plantations under a management contract with a third
party and with loan financing from banks.

The second and third models feature joint ventures between
cooperatives and investors with different structures of
shareholdings.

Under the fourth model, private investors develop plantations
and their processing unit and transfer them to cooperatives under
a build-operate-transfer arrangement.

Under the fifth model, the government develops plantations and
transfers them to smallholders under long-term loan programs.

Most of the 156 applications for plantation licenses chose
joint ventures between cooperatives and investors as the
preferred model for their plantation development. (03)