Govt to protect local palm oil firms

JAKARTA (JP): The State Minister for Investment, Sanyoto Sastrowardoyo, has said the government might totally close oil palm plantations to foreign investors.

"The measure may be needed to protect local palm oil plantation companies," he was quoted by Antara as saying Thursday.

Sanyoto, who is also chairman of the investment coordinating board, said foreign investors controlled about two million of Indonesia's 5.5 million hectares of oil palm plantations.

"The remainder will probably go to foreign investors as well, if we do not freeze new foreign investment in plantations," he said.

The Ministry of Agriculture's directorate general of plantations is conducting a study to see if foreign participation in palm oil plantations is still needed.

Early last week the government temporarily froze Malaysian investments in oil palm plantations in North Sumatra saying Malaysia had overinvested in the sector.

So far 27 Malaysian companies have inked joint venture agreements with Indonesian firms to develop about 1.5 million hectares for oil palm plantations.

Sanyoto said foreign investors owned 27.5 percent of licenses to set up oil palm plantations, and 50 percent of the plantations had started operation.

Indonesia is the world's second largest CPO producer producing half of what Malaysia does.

The investment board approved foreign investments worth US$2.13 in plantations in the past three years. (02)