Inhutani III to enter oil palm sector

JAKARTA (JP): State timber company PT Inhutani III said yesterday that it planned to develop 60,000 hectares of oil palm plantation in its concession areas.

Inhutani III president Soeyoto Wongsoredjo said that the company was still looking for private partners to enter into joint ventures to develop the plantations.

"Many private investors have asked to be our partners, but none have so far met our requirements," Soeyoto said in a news conference.

He said his company expected any future partners to bring fresh money into the venture, but declined to state how much of an investment was required.

Soeyoto said Inhutani III had received approval from the government to diversify into the plantation sector. It currently operates only in the forestry sector.

"The Minister of Finance has approved the revision of our statute so that we can diversify our business into several areas of the forestry and plantations sectors," he said.

The revised statute stipulates that state timber companies can use 30 percent of their concession areas for plantations, he said.

Inhutani III, established in 1974, has concessions covering 300,000 hectares of forest in West and Central Kalimantan,

The company plans to transform 20 percent of its concession area into oil palm plantations, beginning with a 1,000 hectare development in Central Kalimantan later this year, according to Soeyoto.

Next year, he said, the company planned to develop a further 20,000 hectares of oil palm plantations.

Soeyoto said the company expected to continue to underperform this year because of the sluggish demand for wood on both the domestic and international markets.

Last year Inhutani III suffered an Rp 12 billion (US$750,000) loss due to forest fires, he said. (gis)