Govt to protect local palm oil firms

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)