Hilirisation Project in Sei Mangkei SEZ to Boost Value Addition
PT Perkebunan Nusantara (PTPN) IV PalmCo is preparing to strengthen the national palm oil industry structure through an integrated downstream project. This subsidiary of Sub Holding PTPN III (Persero) has scheduled the groundbreaking for a comprehensive palm oil processing facility in the Sei Mangkei Special Economic Zone (KEK), North Sumatra, shortly after the Eid al-Fitr holiday period.
PTPN IV PalmCo’s President Director, Jatmiko K. Santosa, stated that this strategic step is the company’s response to the national downstream policy. The project is also aligned with directives from the Danantara Investment Management Agency to create a solid cross-sector industrial ecosystem.
“Our technical readiness is already mature. We are currently awaiting the final decision from shareholders, and it is estimated that it can start after this Eid,” Jatmiko said in his statement quoted on Wednesday (25/3).
This transformation marks PalmCo’s shift in focus from merely being a producer and exporter of crude palm oil (CPO) to a player in high-value derivative products. One of the main focuses is the development of Bio Propylene Glycol (BioPG) processed from fresh fruit bunches (TBS).
Jatmiko emphasised that the economic value of these downstream products can increase up to tenfold or more compared to selling raw commodities. “This is what drives us to strengthen Indonesia’s position in the global supply chain,” he added.
The facility, targeted to begin gradual operations by the end of 2028, includes several key production units. These are a margarin and shortening factory with a capacity of 40,000 tonnes per year, as well as a cocoa butter equivalent and substitute factory with 34,000 tonnes per year. Additionally, a biodiesel factory with a capacity of 450,000 tonnes per year will be built to support national energy resilience.
In addition to industrial aspects, the project is projected to absorb around 2,900 workers, from the construction phase to full operations. This is expected to trigger multiplier effects for the logistics sector and SMEs in the surrounding North Sumatra region.