Govt estates to expand Irian palm oil output

JAKARTA (JP): Executives of 14 state-owned plantation firms, PT Perkebunan Nusantara (PTPN) I through XIV, agreed yesterday to form a consortium to expand oil palm plantations in the eastern- most province of Irian Jaya.

According to a statement issued by the Ministry of Agriculture, the 14 presidents of the state-owned firms met yesterday with Minister of Agriculture Sjarifudin Baharsjah to report on the new venture during the latter's visit to Arso, Irian Jaya.

Sjarifudin was in the region to inaugurate a 13,500-hectare oil palm estate and two processing plants in Arso and Prafi managed by PTPN II.

The consortium was established after the economic scale of PTPN II's project was considered too small to be feasible. It was then decided that the project should be expanded to the feasible scale of 102,000 hectares of oil palm estates and 11 processing units.

The expanded project is expected to produce an average of 606,000 tons of crude palm oil (CPO) a year valued at an estimated US$300 million.

The project will require a total investment of Rp 1.03 trillion ($447.82 million) which is expected to come from the consortium and bank loans allocated for cooperatives.

The project will employ up to 44,500 heads of families to be involved in nucleus estate programs and 6,600 employees. A family of nucleus estate farmers usually earns about Rp 400,000 a month.

The project is also expected to give the Irian Jaya provincial government a contribution of up to Rp 116 billion a year.

In the future, the oil palm estate in Irian Jaya is expected to become the hub of Asia Pacific CPO-production. (pwn)